Court Opinion

ID: 9831822
Source: CourtListenerOpinion
Date Created: 2023-09-01 21:23:48.886008+00
Date Added: 2024-06-11T07:43:38.351597
License: Public Domain

On Motion for Rehearing,
Our original opinion expresses the finding that the contract here involved by express and positive terms shows that the amount of taxes required to be paid after maturity of the principal note is proportionately reduced with the unearned’ interest obligatidns, to an extent that the amount thereof added to the stated interest on the bond or note shall' not exceed 10 per cent, per annum. While the contract, interpreted as a whole, clearly shows the dominant principle and intention of the parties as not to exact more for the use, forbearance, or detention of the money loaned than the maximum allowed by law, there is no expressed provision that the taxes on the bond or note, required to be paid by the borrower, shall be reduced; yet, we think, the'provision in the second deed of trust, providing that “should there be *1031any failure or default in the performance of any of the covenants or agreements herein contained, or if any of said notes be not paid when due, or if default be made in the compliance with any of the terms or conditions of said first deed of trust, then at the option of the holder of said notes exercised at any time after' such default any or all of said notes shall at once become due to the extent that the total thereof, together with interest on said bond at the rate therein provided, shall not exceed an interest charge of 10% per annum on the amount of said bond from the date at which interest began to date of foreclosure, * * * ” has a direct bearing on the evident intention of the parties not to charge usurious interest. The provision under the contingencies mentioned manifestly cancels all unearned interest notes in excess of 10 per cent, interest per annum on the principal note and sets up a new standard for the payment of interest or charge for the money loaned. The provision demonstrates that the contracting parties intended to avoid the implication of usury by expressly reducing the interest obligations provided therein to an extent that same would not exceed the amount allowed by law. The series of annual interest notes and the provision for the payment of taxes on the bond are current yearly obligations, payable only on the performance of the terms and conditions of the covenants and agreements of the contract. In case of default and the maturity of the principal bond, or note, the contract takes on a new rate or charge for the money loaned and brings into force the powers of sale in the deeds of trust.
Furthermore, it will be noted that the tax provision of the contract requires of the borrower to pay such taxes as may be assessed against the bond, or note, within the state of Texas. The bond or note was executed on December 1, 1925, payable to A. Y. Creager Company, and immediately thereafter assigned to appellee, whose principal office is in the state of Illinois. There is no showing in the record that the note was ever kept within the state of Texas, or that the holder thereof ever had or contemplated a tax situs for said note in the state, or that the maker thereof ever paid, or was required to pay, taxes thereon; nor is there any showing as to the basis of assessment and the rate of taxation on said property. Thus, in the absence of proof, courts cannot presume facts which may or may not exist, but, on the contrary, must assume that the facts do exist as not to make the contract usurious.' Every presumption must be indulged to' sustain the legality of the contract. A more extended discussion of a similar contract is found in the case of Greer v. Franklin Life Ins. Co., motion for rehearing this day overruled, which we here adopt. - '
Appellant’s motion for rehearing is overruled.