Court Opinion

ID: 3983136
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:39:44.890543+00
Date Added: 2024-06-11T07:44:14.650966
License: Public Domain

This is an appeal from an interlocutory judgment of the trial court in sustaining a plea of privilege of the defendant Floyd Shock to be sued in Bexar county, Tex.
The plaintiff, T. E. Ballard, brought this suit in the district court of Haskell county, Tex., to recover a statutory penalty for alleged usury against Floyd Shock of Bexar county, Tex., Earl Morrison of Mitchell county, Tex., and C. G. Gay of Haskell county, Tex. The appellee Shock filed his plea of privilege to be sued in Bexar county and in due time the plaintiff filed his controverting plea to the same.
Ballard alleged in his petition: That on March 15, 1927, he and his wife executed and delivered five notes in the principal sum of $2,400 each, payable to the order of Floyd Shock and to become due on January 1st, each of the years 1928 to 1932, inclusive. That said notes bore interest at the rate of 10 per cent. per annum from date thereof, payable annually, and that the interest was evidenced by five coupon notes of even date with the principal notes. That the interest coupons matured annually on the same dates as the principal notes. That in addition to the 10 per cent. stipulated for in said notes, he, *Page 386 
Ballard, was required to and did pay $500 additional for the use of said money; that this $500 was paid in advance. That the notes and the interest thereon have all been fully paid. That the interest charged and paid was usurious. That the contract was partly verbal and partly written. That in making said contract, said defendants were represented by Gay and that each of the defendants received a portion of the usurious money paid by appellant. That the payment of said notes was secured by deed of trust, etc. That said contract as a whole was a scheme on the part of the defendants to evade the usury laws of Texas, and that under and by virtue of said contract, the appellant paid defendants more than 10 per cent. for the use of the money loaned. The prayer was for judgment for $6,500 interest and a like amount penalty.
The controverting affidavit substantially embraced the allegations in the plaintiff's petition and particularly claimed venue of the suit in Haskell county under exceptions 4 and 29a of the general venue statute, article 1995 (Vernon's Ann.Civ.St.). We treat it as sufficient to claim venue under the special venue statute pertaining to suits for penalties for the collection of usury. Article 5073, and article 1995, subd. 30, Rev.St. 1925.
The venue of the suit cannot be maintained in Haskell county under exception 4, since the evidence discloses no cause of action against C. G. Gay, the resident defendant. Richardson v. Cage, 113 Tex. 152,252 S.W. 747. It appears that the plaintiff, the borrower, paid said Gay $500 to aid him in securing a loan from the defendant Shock who is not shown by the evidence to have had any knowledge or connection with this arrangement between Gay and Ballard, or any interest therein. So far as the evidence shows, the $500 was in the nature of a bonus and was no part of the compensation for the use of the money loaned. The loan itself was at the rate of 10 per cent. per annum, payable directly to Shock and as an inducement to him to extend the loan, it was necessary for the defendant Morrison to indorse the plaintiff's notes. The compensation thus paid Gay was not shown to be any part of the interest paid for the use of the money, and, therefore, should not be regarded as a part of the interest collected by Shock. Williams v. Bryan, 68 Tex. 593, 5 S.W. 401; Stuart v. Tenison Bros. Sad. Co., 21 Tex. Civ. App. 530, 53 S.W. 83; Bomar v. Smith (Tex.Civ.App.) 195 S.W. 964; Hudmon v. Foster (Tex.Civ.App.) 210 S.W. 262; Marsh v. Tiller (Tex.Civ.App.) 293 S.W. 223.
As provided by the statute (Rev.St. art. 5073), the principal and usurious interest may be recovered only from "the person, firm or corporation receiving the same." Webb v. Galveston  H. Investment Co., 32 Tex. Civ. App. 515, 75 S.W. 355, 357; Western Bank  Trust Co. v. Ogden, 42 Tex. Civ. App. 465, 93 S.W. 1102, 1104; Deming Investment Co. v. Giddens (Tex.Civ.App.) 41 S.W.2d 260.
Further, there is no evidence that Gay and Morrison, or either of them, received any part of the interest that was in fact paid for the use of the money. Article 5073 specifically provides that "within two years after the time that a greater rate of interest than ten per cent shall have been received or collected upon any contract, the person paying the same or his legal representative may by an action of debt recover double the amount of such interest from the person, firm or corporation receiving the same."
The undisputed testimony is that the $500, whatever it be called, and regardless of the purpose for which it was paid, was, in fact, paid to Gay about March 15, 1927. The above statute, which creates the right of action when usury is charged and collected, does not authorize a cause of action for penalties based thereon further back than two years after the time the usurious rate of interest shall have been received. The original petition in the instant case was filed November 5, 1932, and is incorporated in the controverting affidavit. These facts pertaining to the payment of the $500 and the filing of the suit sufficiently appear from the statement of facts.
Since Gay, the resident defendant, is not shown to be even a proper party to the suit under exception 4 of the general venue statute, exception 29a could have no application as it deals with necessary parties. If he was not a proper party, he was, of course, not a necessary party.
The venue question will now be considered in the light of the statutes specifically fixing venue in cases brought for the recovery of penalties based upon the collection of usury. Exception 30 of the general venue statute, article 1995, supra. reads as follows: *Page 387
"Special Venue. — Whenever in any law authorizing or regulating any particular character of action, the venue is expressly prescribed, the suit shall be commenced in the county to which jurisdiction may be so expressly given."
With this provision of the statute in mind, we pass to article 5073, R.S. 1925, which reads as follows:
"Within two years after the time that a greater rate of interest than ten per cent shall have been received or collected upon any contract, the person paying the same or his legal representative may by an action of debt recover double the amount of such interest from the person, firm or corporation receiving the same. Such action shall be instituted in any court of this State having jurisdiction thereof, in the county of the defendant's residence, or in the county where such usurious interest shall have been received or collected, or where said contract has been entered into, or where the parties who paid the usurious interest resided when such contract was made."
This article of the statute was enacted in 1907. It is a venue statute. Aviation Credit Corp. v. University Aerial Service Corp. (Tex.Civ.App.)59 S.W.2d 870. It not only created the right to institute and prosecute such suits for penalties, but it specifically fixed the venue of such suits.
Obviously this is a suit to recover penalties growing out of the alleged collection of usury, and we are permitted to ascertain the nature of the suit by an inspection of the petition. Higginbotham-Bailey-Logan Co. v. Hancock (Tex.Civ.App.) 4 S.W.2d 583; Oakland Motor Car Co. v. Jones (Tex.Civ.App.) 29 S.W.2d 861, 862, par. 6; Texas Farm Mortgage Co. v. Starkey (Tex.Civ.App.) 25 S.W.2d 229; Sims v. Trinity Farm Construction Co. (Tex.Civ.App.) 28 S.W.2d 856; Congleton v. L. Mundet Son, Inc. (Tex.Civ.App.) 43 S.W.2d 1111; First National Bank of Electra v. Guyer (Tex.Civ.App.) 40 S.W.2d 212; Jones v. Hickman, Chief Justice, 121 Tex. 405, 48 S.W.2d 982. That being the nature of the suit, to retain venue in Haskell county, it was only necessary, upon the trial of this plea of privilege, for the plaintiff to allege and prove one or more of the following venue facts: (1) That defendant's residence was in Haskell county; (2) that the usurious interest was received or collected in Haskell county; (3) that the contract had been entered into in Haskell county; or (4) that the party (plaintiff here) who paid the usurious interest resided in Haskell county when such contract was made.
Of course, no contention is made that the defendant Shock resided in Haskell county. There is no proof that any usurious interest was received or collected in Haskell county. There is no pleading whatever that the plaintiff, who is alleged to have paid the usurious interest, resided in Haskell county when such alleged usurious contract was made. Hence, there was no basis for testimony of that nature.
However, we find that the plaintiff's controverting affidavit sufficiently alleges that the contract was entered into in Haskell county, Tex., and that this allegation is supported by the uncontradicted testimony. It follows that for this reason alone the trial court erred in sustaining the plea of privilege.
We do not wish to be understood as expressing any opinion as to the merits of the plaintiff's cause of action. If it has any merit, that will have to be developed in the district court of Haskell county, and the same cannot be considered on this appeal, which merely involved the ruling of the trial court on a plea of privilege.
For the reasons assigned, the judgment of the trial court is reversed and the cause remanded.
                               On Rehearing.
In reaching our conclusions in the original opinion, we held that on the trial of the plea of privilege, it was only necessary to prove, in addition to the other venue facts, the existence of a contract (as contradistinguished from a usurious contract) under that provision of the statute, namely, "where said contract has been entered into."
In the able motion for rehearing it is insisted that the essential venue fact under this provision of the statute is a usurious contract, or as stated by the statute, a contract upon which "a greater rate of interest than ten per cent shall have been received or collected." We believe this contention is sound. The pertinent venue portion of article 5073 reads as follows:
"Such action shall be instituted in any court of this State having jurisdiction thereof * * * where said contract has been entered into." *Page 388 
"Such action" evidently pertains to one to recover penalty where "a greater rate of interest than ten per cent shall have been received or collected upon any contract." From this, it is obvious that the same contract which by reason of its usurious nature forms the basis of the action for penalty, for the same reason forms the basis of venue. Only a usurious contract would authorize the action [McDaniel v. Orr (Tex.Com.App.) 30 S.W.2d 489; Continental Sav.  Building Ass'n v. Wood (Tex.Civ.App.) 33 S.W.2d 770; Id. (Tex.Com.App.) 56 S.W.2d 641; Interstate Bldg.  Loan Ass'n v. Bryan, 21 Tex. Civ. App. 563,54 S.W. 377; Driscoll v. Dennis (Tex.Civ.App.) 220 S.W. 576], and only the usurious contract, along with the other venue fact or facts would fix the venue in the county where such contract was made. Fernandez v. Shacklett (Tex.Civ.App.) 1 S.W.2d 675.
After a careful consideration of the points presented by this appeal and in the light of the appellee's motion for a rehearing, and since it is not contended that the suit was filed in the court of the defendant's residence, we are of the opinion that a more accurate statement of the law would be that for the plaintiff (appellant here) to fix venue under the statute in Haskell county, it was necessary for him to allege and prove as venue facts one of the following:
(1) That usurious interest was received or collected on a usurious contract in Haskell county, Tex.; (2) that such usurious contract was entered into in Haskell county, Tex.; (3) that the party (appellant here) who paid the usurious interest on such contract resided in Haskell county, Tex., when such contract was made.
As above noted, no contention is made that defendant Shock resided in Haskell county, Tex. There is no proof that any usurious interest was received or collected by said Shock on any usurious contract in Haskell county. Neither does the testimony establish that a usurious contract as alleged was entered into in Haskell county and the trial court has so found. Further there is no pleading whatever that the plaintiff who is alleged to have paid the usurious interest resided in Haskell county when such alleged usurious contract was made.
In view of the above deficiencies in pleading or proof, the trial court did not err in sustaining the defendant's plea of privilege. Whichever group of facts relied upon by the plaintiff to fix venue of the suit in Haskell county, it was not only necessary for the plaintiff's petition and controverting affidavit to be sufficient in such respects, but it was equally as essential for him to make out by his testimony proof of the fact or facts relied on for venue. In this case the trial court has resolved the fact issues against the plaintiff and a re-examination of the testimony convinces us that we would not be warranted in disturbing the same. It, therefore, becomes our duty to affirm the judgment of the trial court. The necessity on the part of the plaintiff to produce testimony to establish the venue facts has heretofore been carefully considered by this court in the case of Compton v. Elliott, 55 S.W.2d 247, and no review of the authorities will here be made. In addition, we cite, as being in point, the case of Fernandez v. Shacklett et al. (Tex.Civ.App.) 1 S.W.2d 675, holding that where a contract was not usurious as alleged, venue could not be had under article 5073, R.S. 1925, in the county where the alleged usurious payments had been made.
In Compton-Elliott Case there was a dissenting opinion by a member of this court, and on motion for rehearing, we concluded to certify to the Supreme Court the controlling question. The same is deemed controlling in this case. The Supreme Court's answers to the questions certified have not yet been received. Therefore, if the appellant in this case concludes to file a motion for rehearing and signifies a desire that this court take no further action in this case pending receipt of the answers by the Supreme Court to the questions certified, this court will be inclined to await the answers of that court and decide the question here in the light of the answers made.
For the reasons assigned, the judgment of this court heretofore entered pursuant to the original opinion in this cause will be set aside and the judgment of the trial court affirmed. It is so ordered.