Opinion ID: 2462454
Heading Depth: 1
Heading Rank: 2

Heading: The Bank's Arguments to the Contrary

Text: The bank challenges this result on the grounds that the Court of Civil Appeals erred in holding (1) that there was a $14,000 freeze agreement as a condition precedent to making the loan and (2) that the bank did in fact contract for, charge or receive interest in excess of the maximum lawful rate. We have carefully considered the evidence most favorable to the judgment of the trial court for the bank and have failed to find any probative evidence on the controlling issues which would support its findings and judgment. There is evidence that the freeze was not fixed on the ledger sheets until January 12, 1972, from which the bank says it could be inferred that the freeze of the $14,000 was not agreed to at the inception of the loan on January 6, 1972. There is also evidence that the freeze was Mr. Miller's own idea, and that he entered the agreement of his own accord on January 14, 1972. However, it is undisputed that this escrow or freeze requirement was a condition made by the bank loan committee and noted on its Loan Work Sheet on January 6, 1972. In any event, the test for alleged usury is not concerned with which party might have originated the usurious provisions. Tanner Development Company v. Ferguson, supra . All of the above evidence and all other material testimony in this case came from the bank president, Mr. Tibbets. Transposed to narrative form, his testimony included the following undisputed admissions: The loan was for Mr. and Mrs. Miller and Mr. Winters was negotiating the terms of it .... On January 6, I indicated the method of payment of the interest. I wrote on there [the Loan Work Sheet] that we were going to escrow $14,000. The purpose of that escrow was in order to pay, have the interest money available when the interest came due in January '73 and '74. The escrow payment that I had there is the one that's subsequently reflected in the letter executed by Mr. Miller on the 14th day of January, 1972 .... I would not have made the loan without that assurance, either this or some other .... No, I would not have made the loan without that letter and those two postdated checks freezing the $14,000 in the account .... I put the freeze on there on my own [before the letter of January 14] just because he had told me what he was going to do, sir, and we were trying to expedite the closing and we just went ahead and closed it prior to his completing what he had agreed to do ... at all times after January 12th there was a freeze ... at least $14,000.00 in that account was frozen .... That $14,000 was a part of the general deposits at the bank ... it actually constituted lendable funds to other borrowers and was most probably loaned out to other borrowers during 1972 .... For those loans to other borrowers the bank certainly charged and collected interest.... Between January 12, 1972 and January 12th, 1973, the Millers had absolutely no access to that $14,000. In view of this undisputed evidence, the trial court erred in not holding as a matter of law that the Millers had use of only $56,000 of the loan and that the bank's contract for and charge of $21,000 for three years' interest was in violation of Article 5069-1.06. We overrule the bank's contention that the Court of Civil Appeals erred in so holding and in reversing the trial court on these points.