Court Opinion

ID: 9763913
Source: CourtListenerOpinion
Date Created: 2023-08-29 03:00:48.646709+00
Date Added: 2024-06-11T07:29:51.128168
License: Public Domain

On Motion for Rehearing.
Citing Federal Mortgage Company v. Davis, Tex.Civ.App., 100 S.W.2d 717, appellee Associates of Texas contends that the vice of usury must be present in the contract at its inception and is not imported by the after conduct of the creditor, although in disregard of the loan plan adopted; that the agreement with “Cotton” for the $1,795 to be financed was at a lawful rate of interest (6%) signing the note in blank with such understanding. It is then argued that the car dealer’s act in filling out the note blank for $2,300 was such “after conduct by the , creditor”; not rendering the agreement first above stated a usurious one in its inception.
But in the case at bar we have a .single note transaction, incomplete when signed by him and completed by the dealer by insertion of the $2,300 figure. The unsuccessful claim of usury in the Davis appeal, supra, involved after conduct of the creditor under an entirely different state of facts. Here, under Tyson’s version of the transaction, had the car dealer brought suit on the note, the former could have undoubtedly raised the issue of usury among other defenses; but the note having been negotiated, he sought only “compensatory” damages against the car dealer. At the same time, as already held, Tyson was in nowise disabled from raising the same issue against Texas Associates, an innocent transferee of the note in quéstiori. Its motion for rehearing is overruled.
Turning to the motion of Emmco Insurance Company, we have concluded, upon restudy of the record and briefs that same must be sustained. In original opinion we sustained appellant’s point 2 relative to Emmco; thereby concluding that fact issues were perhaps raised on'his primary charge of a “coerced tie-in of insurance by -Texas Associates and Emmco, operating as one in violation of the-usury and antitrust laws of Texas.”- We are now of-the opinion that the point should have been overruled; first summarizing certain facts (touched upon by Emmco) which we regard as not seriously ⅛ dispute: (1) That after all it was a corporation, licensed in Texas to do business as-an insurance company only, here sued as such on its own responsibility as a distinct legal' entity; and likewise, that Texas Associates was in the finance business with no authority' to write insurance; (2) That Emmco was not a party to the contract with Tyson or to the transaction which led to execution of the note and conditional sales contract; not a party to purchase of the note from the dealer and with no interest in the note acquired by Texas Associates as an admitted innocent purchaser; (3) That Emmco and Tyson were stringers to each other, nobody representing Emmco having solicited the writing of the policy of insurance; Tyson having agreed with the auto dealer that insurance would be included in the financing; that is, the premium therefor to be added to the note; Tyson never having heard of Emmco until he received the policy in'the mail; (4) That Emmco had nothing to do with collection of the note by Texas Associates, or any of the negotiations between Tyson and Associates, or “repossession” of the car; (5) That Associates was responsible for payment of the premiums to Emmco and when the policy was cancelled, refunded to Tyson by credit on the note, the unearned premium of $74.-45; and (6) That Tyson did not give the information as to his proper classification (1-A as against 1-B) to any one but Cotton, salesman for the dealer, and that neither Cotton nor the dealer were Emm-co’s agents.
■ In this connection, it is pointed out that while Tyson in affidavit complained of no opportunity to purchase automobile insur-*778anee from a company of his own choice but was advised that he would have to purchase same through the finance company, it was with Cotton, salesman for the motor company, that he had these dealings and received such advice.
Tyson’s answer to Emmco’s motion for summary judgment adopted by reference earlier pleadings, answers and depositions to effect that both Texas Associates and Emmco were commonly owned and controlled by Indiana Associates; the majority of Texas Associates transactions being inclusive of Emmco Insurance; almost all of Emmco policies being issued on deals of Texas Associates, along with other interoffice relationships, and that such “tie-in demonstrated a purpose to obtain additional compensation in conjunction with use, forbearance or detention of the money of the same corporate structure.”
Emmco is then sued jointly and severally with the other cross-defendants “for recission and cancellation of the usurious interest of $505.00 * * In view of the factors and factual background first above detailed, we find no basis for an issue of joint responsibility on part of Emm-co for the exaction of usurious interest when it was not a party to the contract for interest; its only connection being the premium charge, complained of as excessive. Insurance, with separate consideration or premium charge is normally a part of any automobile finance transaction; and Tyson’s alleged arrangement with Cotton the salesman, included the instant charge of $98.75, or a total amount to be financed of $1,893.75 at 6%. The difference between that sum and $2,300 or $406.25 is the maximum amount of note excess that can be claimed under this record as usurious.
Further with respect to appellant’s point 3 (alternative action against Emmco of $8.75 overcharge), this appellee properly suggests lack of court jurisdiction in .this proceeding for any such claim.
The motion for rehearing of Emmco Insurance Company is sustained; and in consequence, the trial court’s summary judgment in its favor is affirmed. Appellant’s motion for rehearing as to Associates Investment Company of Indiana is overruled.