94 S.W.2d 777 | Tex. App. | 1936
This suit was instituted by defendants in error, Jink Lee and wife and Sue Mildred Gilkison (nee Lee) and her husband, against plaintiff in error, Travelers Insurance Company, and against Texas Farm Mortgage Company. The parties will be designated as in the trial court. Plaintiffs alleged that on April 1, 1922, said Lee and wife and their daughter, Sue Mildred Lee, then unmarried, executed their promissory note, payable to the order of Texas Farm Mortgage Company on January 1, 1933, for the principal sum of $11,430; that interest was payable thereon on the 1st day of January of each year thereafter at the rate of 6 1/2 per cent. per annum, according to interest coupons thereto attached; that it was further provided therein that said note and the coupons attached thereto should bear interest after maturity at the rate of 10 per cent. per annum. Said note was secured by a deed of trust covering 300 acres of land in Johnson county, which authorized a sale of the property by the trustee therein named upon certain defaults. Said plaintiffs, at the same time and as further interest on said principal note, executed and delivered to the Texas Farm Mortgage Company their promissory note for $1,843.08, $128.59 of which was payable on January 1, 1923, and the remainder thereafter in equal annual installments of $171.45 each. Said several installments represented interest on the principal note at the rate of 1 1/2 per cent. per annum, and bore interest after maturity at the rate of 10 per cent. per annum. Plaintiffs executed a deed of trust on the same land to secure the payment thereof, which deed of trust recited that the notes (installments) secured thereby were for additional interest on the principal note aforesaid, and authorized a sale of said land by the trustee therein named upon certain defaults. Plaintiffs alleged that under the terms and provisions of the several instruments aforesaid, said transaction provided for the payment of more than 10 per cent. per annum in certain contingencies and was grossly usurious. Plaintiffs further alleged that they had paid certain of said interest coupons attached to the principal note and had also made certain payments on said installment note, and asked that the transaction be declared usurious; that all said payments be credited on the principal of the original note; and that the unpaid remainder of the installment note, together with the deed of trust securing the same, be canceled.
Defendant Travelers Insurance Company incorporated in its answer a cross-bill against plaintiffs, in which it sought judgment for the full amount of said principal note, with interest and attorney's fees as stipulated, and also for the amount paid by it as taxes on the land covered by its deed of trust, and for foreclosure of its lien.
There was a trial to the court. The parties filed a written stipulation that plaintiffs had made certain payments on *778 the interest on the principal note and also certain payments on said installment note. The court held said transaction usurious, and in accordance with the terms of said stipulation, ordered the principal note credited with $6,036.35 paid by plaintiffs to the Travelers Insurance Company as interest on said principal note, and with the further sum of $1,328.70 paid by them to Texas Farm Mortgage Company on said installment note. The court further canceled the unpaid balance of the installment note and the deed of trust securing the same, and rendered judgment on said defendant's cross-action for the sum of $5,413.48, the remainder due on said principal note without interest, together with certain taxes on the land described in the deed of trust, which had been paid by said defendant, and awarded a foreclosure of lien on said land to secure the payment thereof. Said judgment is presented to this court by writ of error sued out by defendant Travelers Insurance Company alone.
The provision contained in the several notes in evidence in this case that all sums past due, whether principal or interest, should thereafter bear interest at the rate of 10 per cent. per annum, did not render the transaction usurious. Wichita Falls Building Loan Ass'n v. Moss (Tex. Civ. App.)
The defendant Texas Farm Mortgage Company has not appealed from the judgment rendered against it in favor of plaintiffs, and such judgment is not disturbed. So far as the judgment of the trial court establishes the right of plaintiffs to have interest payments credited on the principal of the note held by defendant Travelers Insurance Company, and so far as such judgment awards said defendant recovery on its cross-action only for the amount of said note after application of such credits, the same is here reversed and the cause remanded, with instructions to the trial court to deny said plaintiffs credit on the principal of said note for any interest paid, and to render judgment in favor of said defendant against the proper parties plaintiff for the full amount of the principal note of $11,430, together with all unpaid interest thereon and attorney's fees as provided therein, with a foreclosure of the lien securing the same.