Court Opinion

ID: 9777302
Source: CourtListenerOpinion
Date Created: 2023-08-29 20:06:54.561685+00
Date Added: 2024-06-11T07:32:52.160700
License: Public Domain

OPINION
YOUNG, Justice.
This is an appeal by Shane Grant, plaintiff, from a summary judgment rendered in favor of Friendly Chrysler-Plymouth, Inc. and Chrysler Credit Corporation, defendants, regarding a claim filed alleging violations of the Texas Consumer Credit Code, Article 5069-2.01 et seq., Tex.Rev.Civ.Stat. Ann. (Supp.1978) [hereinafter “Credit Code”]. All parties agree that no genuine issue of fact exists. The trial court rendered its summary judgment on the grounds that (1) the acceleration provisions of the signed retail installment contract did not violate the Credit Code and (2) that the principal balance figure was set out correctly in the form required by the Credit Code. We affirm.
On August 25, 1978, appellant Grant purchased a used 1975 Ford F150 pickup truck from appellee Friendly Chrysler-Plymouth, Inc. Financing for the purchase was arranged by Friendly through a “Retail Installment Contract” provided by appellee Chrysler Credit Corporation. The contract was subsequently assigned to Chrysler Credit by Friendly Chrysler-Plymouth.
The contract contained an acceleration provision which provided in part:
“If Buyer defaults in any payment, or fails to comply with any of the terms or conditions of this contract, or fails to procure or maintain the vehicle insurance required hereunder, or a proceeding in bankruptcy, receivership or insolvency shall be instituted by or against Buyer or his property, or if Seller deems the property in danger of misuse or confiscation, Seller shall have the right ... to declare the unpaid portion of the Total of Payments ... to be immediately due and payable.”
This contract provision, claims appellant, violates the Credit Code, Article 5069-7.07(1) (Supp.1978) which was in effect at the time of this transaction, by allowing acceleration of payments in situations not contemplated by law. Article 5069-7.07(1) provides:
“No retail installment contract or retail charge agreement shall:
(1) Provide that the seller or holder may accelerate the maturity of any part or all of the amount owing thereunder unless (a) the buyer is in default on the performance of any of his obligations or (b) the seller or holder in good faith believes that the prospect of payment or performance is impaired;”
The trial court found that the contract provisions substantially follow the wording of the statute. We agree. If the buyer “fails to comply with any of the terms or conditions of this contract,” he surely would also be “in default in the performance of any of his obligations” as that term is used in Article 5069-7.07(1) of the Credit Code. A creditor has the right to contract for acceleration of the date of maturity when the buyer has defaulted his obligation to make timely payments. Ramo, Inc. v. H. E. English, 500 S.W.2d 461, 466 (Tex.Sup.1973); Motor & Industrial Finance Corporation v. H. Hughes, 157 Tex. 276, 302 S.W.2d 386, 394 (1957).
The language of the clause providing for other means of acceleration tracks the statutory language of Article 5069-7.07(lXb). The failure to maintain adequate insurance coverage either on the automobile or the *669life of the buyer would, as the statute dictates, amount to an impairment of the prospect of payment or performance of the contract. In fact, the Credit Code specifically permits a seller to require the maintenance of credit life or property insurance in Articles 5069-7.06(1) and 7.02(2). Similarly, a proceeding in bankruptcy, receivership, or insolvency, as well as misuse or confiscation, would cause a reasonable person to believe in good faith that the prospect of payment or performance was impaired.
It is well established in Texas law that contracting parties are presumed to have intended to obey the law unless the contrary clearly appears. Nevels v. Harris, 129 Tex. 190, 102 S.W.2d 1046 (Tex.Sup. 1937). Likewise, where a contract, by its terms, construed as a whole, is susceptible to more than one reasonable construction, the Court must adopt the construction which comports with legality. Walker v. Temple Trust Co., 124 Tex. 575, 80 S.W.2d 935 (1935). This rule is even more appropriate when the Court is construing a penal statute, such as the Credit Code. Martens v. General Motors Acceptance Corp., 584 S.W.2d 941 (Tex.Civ.App.—Dallas 1979, no writ). The challenged provisions of the contract substantially follow the wording of Article 5069-7.01(b) of the Credit Code and, therefore, are in compliance with the law. Appellant’s first point of error is overruled.
In its second point of error, appellant contends that appellees incorrectly set out the “Principal Balance” in the retail installment contract as that term is used in the Credit Code, Article 5069-7.01(h). The Credit Code specifically sets out by its terms a form to be followed by creditors in disclosing the charges to be paid by the buyer. The “Principal Balance” is defined in Article 5069-7.01(h) to be:
“(h) ‘Principal Balance’ means the cash sale price of the motor vehicle plus the amounts, if any, included in the retail installment contract, if a separate identified charge is stated therein, for insurance and other benefits and official fees, less the amount of the buyer’s down payment, if any, in money or goods or both.”
Further, the “Cash Sale Price” is defined in Article 5069-7.01(f) as:
“(f) ‘Cash Sale Price’ means the price stated in a retail installment contract for which the seller would have sold to the buyer and the buyer would have bought from the seller, the motor vehicle which is the subject matter of such contract if such sale had been a sale for cash. The cash sale price may include any taxes, registration, certificate of title and license fees, and charges for delivering, servicing, repairing, altering or improving the motor vehicle.”
Appellant urges this Court to find appel-lees in violation of the Credit Code because in their Retail Installment Contract they included the amount of $103.74 of sales tax in the “Principal Balance.” It is clear from a reading of Article 5069-7.01(f) and (h) that any sales taxes were clearly intended to be part of the “Principal Balance.” The failure to include them as part of the “Cash Sale Price” was de minimus and did not contravene the intent of the Credit Code as passed by the Legislature. Point of error number two is overruled.
The judgment of the trial court is affirmed.