Case Name: CARPET SERVICES, INC., Appellant, v. GEORGE A. FULLER COMPANY OF TEXAS, INC., Appellee
Court: Texas Courts of Appeals
Jurisdiction: Texas
Decision Date: 1990-11-29
Citations: 802 S.W.2d 343
Docket Number: No. 05-89-01008-CV
Parties: CARPET SERVICES, INC., Appellant, v. GEORGE A. FULLER COMPANY OF TEXAS, INC., Appellee.
Judges: ENOCH, C.J., and ROWE, THOMAS, KINKEADE, OVARD and WHITTINGTON, JJ., join in this opinion.
Reporter: South Western Reporter Second Series
Volume: 802
Pages: 343–349

Head Matter:
CARPET SERVICES, INC., Appellant, v. GEORGE A. FULLER COMPANY OF TEXAS, INC., Appellee.
No. 05-89-01008-CV.
Court of Appeals of Texas, Dallas.
Nov. 29, 1990.
Rehearing Denied Jan. 8, 1991.
David M. Berman, Robert E. Hager, Dallas, for appellant.
Luke Madole, Dallas, John C. Hayes, Jr., Washington, D.C., for appellee.

Opinion:
OPINION
HOWELL, Justice.
Carpet Services, Inc. ("Creditor") appeals from a judgment rendered in favor of George A. Fuller Company of Texas, Inc. ("Debtor"). In its first point of error, Creditor contends that the trial court erred in finding a usurious charge of interest in Creditor's original petition because no such charge was made as a matter of law. By counterpoint, Debtor urges affirmance without regard to the trial court's rulings, contending that it was conclusively established that Creditor did not perform its contractual obligations on time. We sustain the first point of error and overrule the counterpoint. Accordingly, we reverse the judgment of the trial court and render judgment in favor of Creditor.
Debtor was the general contractor and Creditor was a subcontractor on a commercial construction project. Both parties entered into a written subcontract providing that Creditor would supply and install carpet in a building being renovated. When Debtor refused to pay for the work and materials, Creditor brought suit.
In its original petition, Creditor pleaded for prejudgment interest as follows:
Plaintiff would show that it is entitled to pre-judgment interest at the rate of six percent (6%) per annum of and from ten (10) days after the delivery dates specified in Exhibit "A" [the invoices by which Creditor billed Debtor] in accordance with the provisions of Article 5069-1.03.
In its amended answer and second amended counterclaim, Debtor alleged that Creditor's original petition and first amended petition, by means of their requests for prejudgment interest, "charged" interest during interest-free periods.
Trial was before the court; findings of fact and conclusions of law were filed. The trial court concluded that Debtor had breached its contract with Creditor and that Creditor had been damaged. How ever, the court also found that Creditor's original petition contained a usurious charging of interest which was in excess of twice the amount allowed by law. It determined that such charge was not the result of a bona fide error or accident. The court therefore concluded that Creditor "shall forfeit all principal, interest and other charges" and rendered judgment against Creditor for the minimum statutory penalty of $2,000.
The trial court's judgment regarding usury was grounded upon a determination that no amounts were contractually due until Debtor was paid by the owner of the property. The court found that there was insufficient evidence to determine the exact date when Debtor received payment from the owner. However, it did find that payment did not occur until after March 9, 1987. Under the contract, statutory prejudgment interest did not begin to accrue until thirty days after Debtor received payment from the owner. See Tex.Rev.Civ. Stat.Ann. art. 5069-1.03 (Vernon 1987). Creditor pleaded for prejudgment interest on two of its three invoices from February 6, 1987. Inasmuch as it sued for interest running from a date prior to March 9, 1987, it is clear that Creditor was demanding prejudgment interest with respect to an interest-free period.
Creditor argues in its first point of error that its pleading for interest did not constitute the charging of usury as a matter of law. Creditor urges that a demand for interest at a usurious rate which is contained in a pleading should not be considered as the "charging" of usurious interest as forbidden by statute. The authority on this point is in conflict. However, for the reasons stated below, we agree with Creditor.
The principal case that might support the proposition that a pleading seeking a usurious rate of interest constitutes a charging of interest is Moore v. Sabine National Bank, 527 S.W.2d 209 (Tex.Civ.App.—Austin 1975, writ ref'd n.r.e.). In that case, the debtor attacked on appeal the trial court's conclusion that the statements contained in the creditor's notice of intention to repossess, in its original petition, and in its sequestration affidavit did not constitute the charging of an unearned time-price differential or finance charge. Reading articles 5069-8.01 and 5069-8.02, the appellate court found that there had been a "charging" of interest forbidden by statute and found for the debtor. See id. at 210-12.
However, the case appears distinguishable in that a "notice of intention to repossess" was provided to the debtor. Id. at 211. The Moore opinion does not expand upon the nature of this instrument, but we consider that, in all probability, it was a non-statutory document directly served by the creditor upon the debtor prior to the filing of suit and that such writing contained a direct and unqualified demand that the debtor forthwith pay an unlawful amount of interest to the creditor upon pain of legal action if the demand were not met. Thus, it was unnecessary for the Moore court to address, and it apparently did not address, the precise question before us: If a demand for interest is contained only in a pleading, does that pleading make the pleader liable for statutory penalties if the pleading seeks the recovery of interest at an unlawful rate? We hold that it does not.
We cannot agree that a petition or other pleading constitutes a demand upon the adverse party. Although a pleading constitutes notice to the opposing party of the pleader's contentions, Tennell v. Esteve Cotton Co., 546 S.W.2d 346, 356 (Tex.Civ.App.—Amarillo 1976, writ ref'd n.r.e.), it contains neither requests nor demands addressed to the opposing party. A pleading is addressed to the court; its only demand is that the court grant judgment; it demands no action whatever by the opposing party. If the debtor chooses to ignore the lawsuit, the court is still charged to exam ine the pleadings, often to consider evidence, and then to render judgment to the creditor-plaintiff for no more than the amount to which the creditor is lawfully entitled. Of course, the debtor defaults at his peril, but such fact does not alter the essential nature of a pleading. The demand is addressed to the court, not the debtor; the court is legally obligated, even on default, to limit its judgment to that part of the demand to which the creditor shows himself to be lawfully entitled. Thus, a request or demand contained in a pleading is wholly unlike the delivery to the debtor by the creditor of a writing in which the creditor demands or "charges" an excessive rate of interest. The distinction is critical respecting whether a usurious rate of interest has been "charged" within the meaning of the usury statutes. See Tex. Rev.Civ.Stat.Ann. arts. 5069-1.06, 5069-8.-01(a), 5069-8.02 (Vernon 1987). In distinguishing Moore, we note the court's finding that "appellee's notice of intention to repossess, its original petition, and its sequestration affidavit . shows a demand by appellee upon appellant to pay [interest at an excessive rate]." Moore, 527 S.W.2d at 212 (emphasis added). We question whether any of the enumerated instruments other than the notice of intention to repossess showed a direct and unequivocal demand that the debtor make any payment to the creditor. Moore is distinguishable. At a minimum, it fails to address the turn-point of this case.
In the cases applying Moore, we find no discussion of the foregoing distinction. The cases assume rather than decide that pleadings seeking excessive interest constitute the "charging" of usurious interest. Like Moore, they ignore the distinction between pleadings addressed to a court and writings addressed to the debtor. See, e.g., Moore v. White Motor Credit Corp., 708 S.W.2d 465, 468 (Tex.App.—Dallas 1985, writ ref'd n.r.e.); Rick Furniture Distrib. Co. v. Kirlin, 634 S.W.2d 738, 740 (Tex.App.—Dallas 1982, writ ref'd n.r.e.); Nationwide Fin. Corp. v. English, 604 S.W.2d 458, 461 (Tex.Civ.App.—Tyler 1980, writ dism'd); General Motors Acceptance Corp. v. Uresti, 553 S.W.2d 660, 663 (Tex.Civ.App.—Tyler 1977, writ ref'd n.r.e.).
The question in hand has never been directly addressed by the Texas Supreme Court. See Danziger v. San Jacinto Sav. Ass'n, 732 S.W.2d 300, 305 (Tex.1987) (Gonzalez, J., concurring). That court has repeatedly held that usury statutes are penal in nature and must be strictly construed. See Houston Sash and Door Co. v. Heaner, 577 S.W.2d 217, 222 (Tex.1979); First State Bank v. Miller, 563 S.W.2d 572, 577 (Tex.1978). When there is any doubt regarding legislative intent, the usury statutes should be construed so as to give the alleged violator the benefit of that doubt. See PJM, Inc. v. Walter Clark Advertising, Inc., 624 S.W.2d 282, 286 (Tex.App.— Dallas 1981, writ ref'd n.r.e.); Hight v. Jim Bass Ford, Inc., 552 S.W.2d 490, 491 (Tex.Civ.App.—Austin 1977, writ ref'd n.r.e.). We decline to follow the cases holding, with little or no analysis, that demands contained in pleadings for the recovery of excessive interest trigger the penal provisions of the usury statutes.
Today's decision is consonant with the modern day theory of pleading, that a party's pleadings must be liberally construed in favor of the pleader so as to effectuate the rights of the pleader to full relief. The law of pleading, to the full extent possible, should be free of traps for the unwary. If a party is possessed of a tenable theory or tenable facts from which he may arguably assert a right to the recovery of interest, the party should be entitled to exhibit his claim to the court without being held in terrorem. Other provisions of the law are available to visit sanctions upon those who consume the courts' time with unfounded and frivolous claims for the recovery of interest. We decline to construe the law so as to expose a pleader to the contingency of multiple sanctions.
We hold that a demand for interest in violation of the limits fixed by the usury statutes, which demand is contained in a pleading, is not, by itself, a "charging" of interest at statutorily forbidden rates. To the extent that they hold otherwise, we overrule Moore v. White Motor Credit Corp., 708 S.W.2d 465 (Tex.App.—Dallas 1985, writ ref d n.r.e.), and Rick Furniture Distributing Co. v. Kirlin, 634 S.W.2d 738 (Tex.App.—Dallas 1982, writ ref'd n.r.e.). We sustain Creditor's first point of error.
In its first counterpoint, Debtor maintains that the trial court's judgment should be affirmed because it was conclusively established that Creditor did not timely perform its contractual obligations. Debtor notes that when time is of the essence in a contract, a party must perform in strict compliance within the time prescribed in order to be entitled to any relief. Neco Eng'g Co. of Texas v. Lee, 487 S.W.2d 185, 187 (Tex.Civ.App.—Waco 1972, no writ).
However, the trial court concluded, among other things, that Creditor performed its contractual obligations in a timely manner and did not breach the subcontract. Furthermore, the trial court concluded that the changes and additional work performed by Creditor were accepted and ratified by Debtor, as evidenced in part by Debtor's acts of charging the owner for the work performed by Creditor and receiving payment from the owner for that work. Even if time is of the essence by express stipulation in a contract, strict performance may be waived by the party entitled to insist on it. Such waiver may be written or oral, and it may be shown by circumstances or course of dealing. Puckett v. Hoover, 146 Tex. 1, 6, 202 S.W.2d 209, 212 (1947); Stevenson v. Adams, 640 S.W.2d 681, 684 (Tex.App.—Houston [14th Dist.] 1982, writ ref'd n.r.e.). Waiver of timely performance may result from one party's express or implied assent to the continued performance of the other party without objection to the delay. Seismic & Digital Concepts, Inc. v. Digital Resources Corp., 590 S.W.2d 718, 721 (Tex.Civ.App. — Houston [1st Dist.] 1979, no writ). Our review of the record indicates that some evidence supports the trial court's factual findings, and the trial court's conclusions were legally justified. We overrule Debtor's counterpoint.
We find that we need not address the remaining points raised by the parties.
We reverse the trial court's judgment and render judgment in accordance with other uncontested findings and conclusions of the trial court that Creditor recover $36,-160.90 in actual damages from Debtor, $12,000 in attorney's fees for the handling of the cause at trial, $4,000 in attorney's fees for the appeal to this Court, and $2,500 in attorney's fees if Creditor is successful in a further appeal to the Texas Supreme Court. Because the dates on which the amounts became due and payable to Creditor must be certain or definite in order to support an award of prejudgment interest, and because there was no evidence establishing those dates, we render judgment that Creditor take nothing on its claim for prejudgment interest. See C & C Partners v. Sun Exploration & Prod. Co., 783 S.W.2d 707, 721 (Tex.App.—Dallas 1989, writ denied).
On the pleadings and evidence before it, the trial court should have awarded judgment to Creditor that it have interest at the statutory rate of ten percent from and after the date of the trial court's judgment (May 5, 1989). See Tex.Rev.Civ.Stat.Ann. art. 5069-1.05, § 2 (Vernon Supp.1990). We are obligated to render the judgment that the trial court should have rendered. See Tex.R.App.P. 81(c). We therefore grant judgment for interest at said rate from May 5, 1989.
ENOCH, C.J., and ROWE, THOMAS, KINKEADE, OVARD and WHITTINGTON, JJ., join in this opinion.
BAKER, J., dissents, joined by WHITHAM, McCLUNG, STEWART, LAGARDE and BURNETT, JJ.
. There was evidence that Debtor did not even apply to the owner for payment covering the Creditor invoices until April 21, 1987, and December 1, 1987.
. We do not address the effect of a sequestration affidavit as referred to in Moore; no such instrument is here involved.
. The dissent focuses upon the principle of stare decisis generally and further argues that this Court is not following the rulings of the Supreme Court.
We find no decision of the appellate courts of this state explicating upon the mechanism whereby a writing addressed to a third party and which makes no specific demand that the debtor take any action whatever can constitute the "charging" of usury, particularly in view of the well settled proposition that the usury statutes are penal and must be strictly construed.
Most certainly, neither the Supreme Court nor this Court has ever directly addressed and thereafter deliberately and expressly rejected the reasoning upon which this opinion pivots. It follows that this Court is free to make today's ruling without offending the principles of stability and predictability that are the foundation for the rule of stare decisis.
The dissent concedes that the rulings in point of the Supreme Court are dicta; it seeks to elevate them to the level of so-called "judicial dicta" which do constitute binding precedent even where the statements were not necessary to the disposition of the case which spawned them. On the dissent's own authorities, statements by the Supreme Court rarely meet the test of judicial dicta. For a statement to constitute a judicial dictum, it must have been "deliberately made for the purpose of being followed" by the court below and by the bench and bar in general. Palestine Contractors, Inc. v. Perkins, 386 S.W.2d 764, 773 (Tex.1964). Manifestly, the Supreme Court's rulings cited by the dissent do not qualify as judicial dicta. It follows that neither the rules of stare decisis in general nor any judicial dictum of the Supreme Court limits us from making the within decision.