Opinion ID: 2462454
Heading Depth: 1
Heading Rank: 3

Heading: Recovery of Interest Payments

Text: By counterclaim, the bank sought to recover as interest the two $7,000 sums, one of which was deposited with the court and the other being deposited in Mrs. Miller's account at the bank. Mrs. Miller denied the claim, alleging that the interest was usurious and therefore not subject to recovery. Since the interest contracted for was usurious, the bank was not entitled to recover it. Wall v. East Texas Teachers Credit Union, 533 S.W.2d 918 (Tex.1976). In reversing the judgment of the trial court, the Court of Civil Appeals properly rendered the judgment which the court below should have rendered, [6] that the bank take nothing on its counterclaim and that the two $7,000 deposits be paid to Mrs. Miller. We overrule the bank's contention that the pleadings and appellate procedures were insufficient to support such action by the Court of Civil Appeals. As heretofore indicated, we do not agree with that part of the judgment of the Court of Civil Appeals which awarded Mrs. Miller an additional $14,000 as a recovery of usurious interest paid. Mrs. Miller did not plead for recovery of any interest paid. Such a claim was not tried by consent nor was it presented by Mrs. Miller on appeal. The Court of Civil Appeals, on its own motion, added this award to effectuate the intent of the usury statute. A party may not sustain a favorable judgment on an unpleaded cause of action which was not presented to the trial court or in the Court of Civil Appeals. Oil Field Haulers Ass'n v. Railroad Commission, 381 S.W.2d 183 (Tex. 1964); State v. J. M. Huber Corporation, 145 Tex. 517, 199 S.W.2d 501 (1947). Neither do we agree that recovery of interest paid is authorized as an additional forfeiture penalty under Article 5069-1.06(1), which provides that any person who contracts for, charges or receives usurious interest shall forfeit to the obligor twice the amount of interest contracted for, charged or received .... Section (1) of Article 5069-1.06 does not so provide. Section (2) of the same Article, relating to any lender who contracts for, charges or receives interest which is in excess of double the amount of interest allowed by this Subtitle shall forfeit as an additional penalty, all principal as well as interest and other charges .... If the Legislature had intended the additional penalty of forfeiture of interest paid under Section (1), it would have been a simple matter to have so stated, as in Section (2). The changes made by the Legislature in the successor Articles 5069-1.04 and 5069-1.06 are obvious. [7] The reasoning of the Court of Civil Appeals in adding this recovery of interest paid, although not sought in Mrs. Miller's pleadings, was stated: To effectuate the intent of the usury statute, the interest payment should be returned to Mrs. Miller before she recovers twice the interest charged, so that the net effect is a forfeiture of twice the interest charged. It based this reasoning on a statement in Wall v. East Texas Teachers Credit Union, supra , a case which was not in any manner comparable on this particular point. [8] In Wall, no interest had been paid, but the lender was affirmatively seeking payment of the usurious interest. It was erroneously awarded to him as an offset against the borrower's recovery of twice the interest contracted for. Our principal holding in Wall was that the lender cannot recover unpaid interest under a usurious contract. The case, of course, did not involve any attempt by the borrower to recover interest, because he had paid none. A correct interpretation of Wall and Article 5069-1.06 on this point was made by the Court of Civil Appeals in Ferguson v. Tanner Development Co., 541 S.W.2d 483, 495 (Tex.Civ.App.1976), but it allowed common law recovery of the alleged usurious interest, a claim therefor having been specifically sought in the pleadings of the payor. The holdings on this point were not reached in this Court, because the case was reversed and rendered on other points. 561 S.W.2d 777 (1977). We have no such common law point or pleadings before us in the present case, and therefore express no opinion thereon. Since provisions for forfeitures and statutes of a penal nature are to be strictly construed, we hold that twice the amount of usurious interest contracted for, charged or received is the maximum that may be recovered by an obligor under the provisions of Article 5069-1.06(1). Accordingly, the judgment of the Court of Civil Appeals is modified by eliminating therefrom the paragraph on page 2 which orders that Macile Miller recover from the First State Bank, Bedford, Texas, the additional sum of $14,000. As so modified, the judgment of the Court of Civil Appeals is affirmed. Dissenting opinion by SAM D. JOHNSON, J., in which STEAKLEY and McGEE, JJ., join.