Court Opinion

ID: 3904241
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:33:54.941177+00
Date Added: 2024-06-11T12:03:29.250081
License: Public Domain

In this court the sole question that will be considered is whether the trial court entered the correct judgment. In answer to special issues submitted to them, the jury made findings to the effect that a series of three notes, totaling about $2,500, given by defendant in error and her husband, since deceased (but to all of whose rights she has succeeded), to the National Bond  Mortgage Corporation on October 8, 1928, were usurious. These three notes were secured by two separate deeds of trust on the same real estate, belonging to the husband, situated in Harris county. This series of notes was given in renewal of a note shortly theretofore given by defendant in error and her deceased husband to the Real Building  Loan Association, secured by a deed of trust on the same property belonging to the husband, and which on October 8, 1928, belonged to the National Bond  Mortgage Corporation. This original note will be referred to as the $1,900 note.
Now from the undisputed evidence it appears that, according to the terms of the renewal contract, a payment fell due under it on December 8, 1931, which defendant in error failed to make, and that the National Bond Mortgage Corporation, acting under the terms of the renewal contract and exercising the right of acceleration conferred by it, did, on December 14, 1931, declare the entire indebtedness due, and in due course thereafter trustee's sales were held, and the property was foreclosed.
Defendant in error brought this suit and denounced the renewal notes as usurious; alleged that there was unpaid on the $1,900 note at the time the renewal notes were executed only $1,854.64. She alleged that, since the date of the renewal notes, she had paid to the defendant holders of such notes the sum of $1,000, which defendant note holders had largely applied to the payment of usurious interest, but which must by law be applied to the reduction of the principal. Further, that by reason of applying such thousand dollars to the payment of usurious interest, instead of to the principal of such usurious renewal notes, a supposed default occurred in payments on such notes on December 8, 1931, and the holders thereof attempted to accelerate their maturity. That thereafter attempted sales foreclosing the separate deeds of trust were held, and trustee's deeds were given purporting to convey such property. But that, at the time it was attempted to mature the renewal notes, they were not in default, and plaintiff owed thereon only the sum of $854.64, and the foreclosure sales were void. She asked to have the trustee deeds set aside. She confessed she owed on such notes the sum of $854.64, and pleaded a tender of payment into court. In the alternative, in certain contingencies not necessary to set forth, she pleaded that the notes were barred, as having been accelerated and declared due on December 14, 1931, more than four years before the defendant note holders filed their answers to her suit.
The defendant note holders denied generally the allegations of usury; they also by way of cross-action, in case the trustee's deeds at the foreclosure sale were found irregular or were set aside, sued on the renewal notes and to foreclose the deeds of trust securing their payment. In the alternative, and in case the renewal notes were found to be usurious, they declared they *Page 993 
elected to stand on the $1,900 note, and by way of alternative cross-action, sued defendant in error for the balance due on such original note, and to foreclose the deed of trust which secured its payment.
After the jury had made findings to the effect that the renewal notes were usurious, the defendant note holders on February 6, 1936, moved the trial court to enter judgment for them on the verdict; and, before the court acted thereon, filed a motion for judgment notwithstanding the verdict, which the court held under advisement until March 13, 1936, and then found: (1) That the two trustee's sales held under the deeds of trust securing the renewal notes did not constitute an election by their holders to claim under them instead of under the original $1,900 note; (2) that the defendants, by filing their motion for a judgment notwithstanding the verdict, elected to claim under the $1,900 note, and abandoned all claim under the renewal or usurious notes; (3) that in exercising the rights given them under the usurious contract to accelerate the maturity of the renewal notes, on December 14, 1931 (because of plaintiff's failure to pay the installment due thereon, according to the face and tenor of the renewal notes, on December 8, 1931), defendant holders of such renewal notes thereby in fact matured the original $1,900 note. That consequently the $1,900 note which was thus accelerated to mature on December 14, 1931, was barred by the lapse of the four-year period of limitation, Vernon's Ann.Civ.St. art. 5527, at the time defendant note holders declared thereon in their alternative cross-action against plaintiff (defendant in error here).
From the record as presented here, we are unable to say that the court erred in holding that the defendant note holders had abandoned their usurious contract of October 8, 1928, and thereby lost their right to recover the balance due under it of $854.64, and which defendant in error admitted she owed, and tendered into court. But it is clear that, in exercising the right to accelerate the maturity of the renewal notes on December 14, 1931, which right they held under the usurious contract, defendant note owners did not exercise the right of acceleration conferred on them by the original legitimate contract. In abandoning the usurious contract, the note owners must not only be taken to have abandoned the foreclosure sales made under such contract, but also their acceleration of maturity under which the foreclosure sales were had. So far as appears in the state of the record, the $1,900 note was not matured until defendant owners filed a cross-action thereon in this suit.
This case appears to have been fully developed in the trial court. But all we can be sure of, in the state of the record here, is that defendant note owners should either have been awarded judgment for the balance of $854.64, admittedly due on the usurious contract, or they should have been awarded judgment for the balance due on the original legitimate contract. For the court to have denied recovery on not only the usurious contract, but also on the legitimate contract is manifest error apparent on the face of the record. It may be that on motion for rehearing the parties can satisfy us on which contract the recovery should have been awarded, and thereby avoid a retrial. But not being able to determine at this time on which contract judgment should have been rendered, we are forced to remand the cause for a new trial.
Reversed and remanded
PLEASANTS, C. J., absent.