Court Opinion

ID: 9760292
Source: CourtListenerOpinion
Date Created: 2023-08-29 00:46:54.866021+00
Date Added: 2024-06-11T07:29:10.552893
License: Public Domain

On Appellee’s Motion for Rehearing
PER CURIAM.
Our original opinion herein was delivered June 10, 1959. It reversed the judgment of the Trial Court and rendered judgment for appellants. Appellee thereafter timely filed his motion for rehearing and upon noting its contents we, on July 1, 1959, issued the following self explanatory directive :
“Appellee’s sixth assignment of error in his Motion for Rehearing in this Court reads:
“ ‘The Court of Civil Appeals erred in not holding void the agreement between the officer of Home Life and Accident Insurance Company and Howard V. Noll, under which Appellants claim ownership of the insurance premiums involved, by reason of the prohibitions contained in Article XVI, Section 11, Constitution of Texas.’
“Art. XVT, Sec. 11 of the Texas Constitution defines usury and directs the Legislature to provide appropriate pains and penalties to prevent the same. Appellee’s pleadings in the Trial Court do not mention ‘usury.’
“Appellants have three points (6, 7, 9) addressed to the question of usury. They are in substance that the agreement involved in this case is not usurious and even if it is appellee has no right to recover the usurious interest.
“Appellee has no counterpoint asserting that the transactions here involved are usurious. In fact he disclaims any effort or attempt to recover on the ground of the agreement being usurious. We quote from his brief:
“ ‘Let it be made clear once and for all that the receiver is not here contending that he is entitled to recover, on behalf of his insurer, its stockholders, policyholders, creditors and-claimants, even in part, on any theory of usury. The appellee believes that in business, as well as in law, and most certainly in law, that:
“ ‘The word “premium” in the law of insurance, has a well settled and specific meaning which is well understood. In its proper and accepted sense it means the amount paid to the company as consideration for the insurance; the consideration for the contract of insurance; the sum which insured is required to pay.’ 44 Corpus Juris Sec. ‘Insurance’ Sec. 340, p. 1302.
“ ‘Appellee brings this suit, on behalf of the insurer, its innocent stockholders, its policyholders, its creditors and other interested parties, to recover the part of all of the premiums which were admittedly and indubitably owing to the insurer by the respective insureds and which Appellants admit they collected and received and further, strangely, admit that the corporate lending Appellants were obligated to pay. Appellee does not seek recovery on any theory of usury. He seeks recovery only on the theory that the money sought to be recovered is made up of portions (85%) of gross premiums, that such premiums belonged to the insurer, its stockholders, policyholders, creditors, claimants and other interested parties in the insurer, prior to the time of the commencement of the receivership, at the time of the appointment of the re*936ceiver, at the time this suit was filed, and at the time this cause is submitted to this Honorable Court on appeal.
* * * * *
Appellee repeats: He does not seek to recover the monies awarded him against the Appellants as usurious interest paid. He seeks to recover, and did recover in the trial court, such monies as large percentages of the gross premiums owing to the insurer in receivership. These admittedly were collected by the very lending corporate Appellants whom all Appellants admit were obligated to pay Appellee’s Home Life Company. Appellee submits that the insurer, its stockholders, and certainly its policyholders, creditors and claimants, and thereafter, the Receiver on their behalf had a right to recover such parts of premiums wherever the same might be found, whether in the real agent’s pockets, a national bank checking or savings account, or in the possession of Appellants. The only way usury gets into this case at all is to show groundless Appellants’ claim that they are entitled to defeat Appel-lee’s right to the percentage of premiums held by them because the same constitute “commissions” they, though not agents, claim they are authorized to receive and keep under authority of Art. 3.53, Insurance Code.’ (Italics ours.)
“Under these circumstances we feel that if we have erred in not holding the agreement in suit void under the usury provision of the Constitution the blame should at least be shared by appellee. We desire to correct any error which we have made and to that end we direct:
“(1) That appellee brief the question of usury which he for the first time presents to this Court under his sixth assignment of error, supra, including, of course, any authority which he may have to recover usurious interest paid, if any.
“(2) That such brief be filed in this Court on or before September 1, 1959.
“(3) That appellants reply to such brief, if they so desire, on or before October 1, 1959.
“(4) That the parties indicate in their briefs or otherwise if further oral argument is desired.”
Supplemental briefs have been filed by all parties.
We have concluded that it would be improper for us to determine the question of usury for the reason that conceding the transactions to be usurious the borrowers who paid usurious interest and not appellee would be the proper parties to seek its recovery.
The general rule on this subject is stated in 91 C.J.S. Usury § 71, as follows:
“Since usury laws are enacted for the protection of needy borrowers, and not to punish extortion in money lenders, the defense of usury is purely personal to the borrower, or those in privity with him, * * * such as the debtor’s sureties, guarantors, heirs, devisees, and personal representatives.”
In Bean v. Peurifoy, Tex.Civ.App., 75 S.W.2d 489, 490, the Dallas Court of Civil Appeals stated the same rule in this language :
“Whatever statutory right or penalty may be attached to the alleged transaction, it alone involves appellee and the other alleged usurious contracting party, and will not inure to the benefit or detriment of a stranger to the transaction. The remedies of one paying usurious interest are personal to him, and he alone may recover the statutory penalties and exact the remedies flowing from suclr transaction.”
*937To the same effect is Sugg v. Smith, Tex.Civ.App., 205 S.W. 363, writ refused, by this Court.
In fact the statute (Art. 5073, Vernon’s Ann.Civ.St.) which authorizes the recovery of double the amount of usurious interest paid authorizes its recovery by “the person paying the same or his legal representative.” Since appellee does not fall in either of these categories he is not entitled to recover usurious interest, if any, which may have been paid by borrowers from Guardian.
Complaint is also made of the following paragraph in our original opinion:
“The receiver’s powers exist only for the protection of claimants, other creditors and policyholders, and since it admitted that further recovery of funds is not required for the protection of those above named or to pay any sum that might be due such persons then there was no necessity for the institution of this suit.”
We have concluded to withdraw the quoted paragraph from our opinion and to insert in lieu thereof the following:
“Since it is admitted by appellee that further recovery of funds is not needed for the protection of creditors, claimants and policyholders of Home Life and Accident Insurance Company it appears that the Receiver should have surrendered the affairs of this company to an agent of its stockholders under the provisions of Art. 21.28, Insurance Code, V.A.C.S.”
Appellee also assigns as error our action in rendering judgment for appellants.
Since the cause was tried in the Court below and disposed of by granting appellee’s motion for summary judgment and since appellants did not file a motion for summary judgment we have concluded that this cause should be reversed and remanded rather than reversed and rendered.1 It is so ordered.
The motion for rehearing is granted in part and overruled in part.

. This question is discussed in McDonald Texas Civil Practice, 1958 Cumulative Supplement, Yol. 4, Sec. 17.26.5, and the conclusion is reached that in situations such as we have the better practice would be to limit the judgment or order to one overruling the motion filed.