Summary
In Dallas Trust Savings Bank v. Brown, 48 S.W.2d 1044, where the facts with respect to the ownership of the interest notes and the manner of their payment were almost identical with the facts in this case, it was held that penalties could not be recovered against the trust company for collecting usurious interest notes as agent of the life insurance company which owned them by recorded assignment from the trust company.
Summary of this case from Commerce Trust Co. v. BestOpinion
No. 4138.
February 12, 1932. Rehearing Denied March 31, 1932.
Appeal from District Court, Fannin County; Geo. P. Blackburn, Judge.
Action by W. F. Brown against the Dallas Trust Savings Bank. From an adverse judgment, defendant appeals.
Reversed and rendered.
The suit was by appellee Brown as plaintiff against the appellant bank as defendant It was predicated on the provision in article 5073, R.S. 1925, that when "a greater [quoting] 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." Appellee alleged that he paid and that appellant received and collected of him on that kind of a contract sums aggregating $2,215, and that he therefore was entitled to recover of appellant $4,430. The latter did not claim in the evidence that the $2,215 was not received and collected by it, but claimed that in receiving and collecting the interest it was acting for and as the agent of the Connecticut General Life Insurance Company, the owner of the contract stipulating for the usurious interest in question. In a supplemental petition appellee claimed that appellant was estopped by conduct on its part specified from asserting that it acted for said insurance company when it received the interest in question. In its answer defendant set up as res ajudicata of appellee's claim a judgment obtained against him in March, 1927, by said insurance company in a suit it brought on notes evidencing the indebtedness on account of which the interest in question was paid. The trial was to the court without a jury and he made and filed findings of fact as follows: "(1) On or about July 1, 1921, the defendant, Dallas Trust Savings Bank of Dallas, Texas, loaned to the plaintiff, W. F. Brown, $11,500.00, taking said plaintiff's six notes therefor, five of said notes being for $500.00 each, and the remaining note for $9,000.00, said six notes drawing interest from date at the rate of seven per cent per annum, and said $500.00 notes being due on the first day of January, 1923, 1924, 1925, 1926 and 1927, respectively, and said note for $9,000.00 being due January 1, 1932; that as a portion of the interest, the plaintiff also executed and delivered to said defendant another note in the sum of $2,065.00, payable in installments, the first installment of $115.00 being payable January 1, 1922, and the other installments being payable $390.00 on the first day of January, 1923, 1924, 1925, 1926 and 1927, respectively, said last named notes drawing interest only after their respective maturities. (2) The plaintiff paid on or about their respective maturities the $500.00 notes above mentioned maturing on the first day of January, 1923, 1924; that on or about the first day of January, 1925, there was owing on said loan the sum of, $10,500.00, and on or about that time after said payments were all made, the defendant, the Dallas Trust and Savings Bank received and collected from the plaintiff as one year's interest on said $10,500.00 the sum of $1,125.00; that on or about the first day of January, 1925, the plaintiff paid the said note Of $500.00 maturing on or about January 1, 1925, and after the payment thereof, the defendant, the Dallas Trust Savings Bank of Dallas, Texas, received and collected from the plaintiff as one year's interest on the sum of $10,-000.00, the sum of $1,090.00. (3) That the contract on which this suit was based was entered into in Fannin County, Texas, and that the plaintiff resided in Fannin County, Texas, when said contract was made, and has resided in said county at all times since the making of said contract. (4) That on or about the __ day of July, 1921, the Dallas Trust Savings Bank transferred, sold and conveyed to the Connecticut General Life Insurance Company of Hartford, Connecticut, the six notes above mentioned, aggregating $11,500.00, and said assignment was duly recorded in the Deed Records of Fannin County, Texas; that any transfers of any of the other notes made by the Dallas Trust Savings Bank were not paced of record, and plaintiff, W. F. Brown had no actual knowledge of the sale and transfer of said notes. (5) That on or about the ninth day of February, 1927, the Connecticut General Life Insurance Company, in the District Court of Dallas County, Texas, brought a suit against the defendant, W. F. Brown on said $500,00 note above mentioned maturing January 1, 1927, and said $9,000.00 note maturing January 1, 1932, and recovered a judgment against him for principal, interest, and attorney's fees in the sum of $10,649.22, said suit being numbered 67272-B, styled the Connecticut General Life Insurance Company v. W. F. Brown et al.; that the real estate securing said loan was sold under an order of sale issued under said judgment for enough to satisfy said judgment; that the payments of $1,125.00 and $1,090.00 made by plaintiff and received and collected by defendant, Dallas Trust Savings Bank, were not involved in said suit number 67272-B brought in Dallas County, Texas, by the Connecticut General Life Insurance Company. (6) That after the making of said loan, the defendant, Dallas Trust Savings Bank of Dallas, Texas, prior to the interest maturity thereof, and the maturity of the several notes, sent by mail to the plaintiff at his address notices stating in effect that the payment on the loan and interest would become due on January first following the date of the notice, and advising the plaintiff to give prompt attention to the payment of the amount due, and to remit direct to the office of the Dallas Trust Savings Bank, etc. (7) That after the payments of said $1,125.00 and $1,090.00, defendant, Dallas Trust Savings Bank forwarded by mail to plaintiff, its receipt for said payments. (8) That at the time the plaintiff remitted to the defendant, said payments of $1,125.00 and $1,090.00, as above set out, he in good faith believed that the defendant, Dallas Trust Savings Bank of, Dallas, Texas, was the owner of the loans on which said interest was paid; he relied on the written statements sent him by said defendant. (9) That the defendant, Dallas Trust Savings Bank is estopped to assert that the two payments of $1,125.00 and $1,090.00 made by the plaintiff were made to the Connecticut General Life Insurance Company of Hartford, Connecticut, or any other person or Corporation other than the defendant." On the facts as found by him, the court concluded as follows: "The defendant, Dallas Trust Savings Bank of Dallas, Texas, having received and collected from the plaintiff, W. F. Brown, $1,125.00 as one year's interest on $10,500.00, and having received and collected $1,090.00 as one year's interest on $10,-000.00, violated the usury statute of this state, and became liable to the plaintiff for $4430.00, double the amount of the interest paid by him as aforesaid, and that judgment should be rendered to him for that sum with interest thereon at the rate of six per cent per annum from the date of the judgment," and rendered judgment in appellee's favor against appellant for $4,430.
McBride, O'Donnell Hamilton, of Dallas for appellant.
Cunningham Lipscomb, of Bonham, for appellee.
That the interest stipulated for in the promissory notes evidencing the contract in question was usurious, was not questioned in the evidence heard at the trial. While it appeared in that evidence that the notes were made by appellee to appellant, it appeared, further, that appellant had assigned same to the Connecticut Life Insurance Company, and that in receiving and collecting the interest as it did, appellant acted for and as the agent of said insurance company. The contention that by force of the statute referred to in the statement above, appellant nevertheless was liable to appellee as claimed by him, was on the theory that it also appeared that appellant was estopped from asserting he was not the owner of the notes and in receiving the interest acted for said insurance company.
As supporting his contention, appellee points to evidence showing (as he contends) that when he paid the interest he did not know appellant had assigned the notes, and was induced by conduct of appellant with reference thereto to believe that it still owned them, and then quotes as follows from 21 Corpus Juris, 1060: "If a person by his conduct induces another to believe in the existence of a particular state of facts, and the other acts thereon to his prejudice, the former is estopped, as against the latter, to deny that that state of facts does not in truth exist."
We think the principle of law invoked has no application in the case, for, evidently, the injury to appellee was caused by his entering into the contract to pay usurious interest and afterward paying such interest when he was not bound to do so, and was not caused by appellant's failure to advise him it had assigned the notes and was acting for its assignee in receiving the interest.
As we view the case, it did not appear in the evidence that appellee had a cause of action against appellant; and certainly, if it did so appear, such a cause of action was not one created by the statute referred to, but was for damages for fraud inducing appellee to believe it owned the notes and as owner was entitled to collect and receive the interest.
The judgment will be reversed, and judgment will be rendered here that appellee take nothing by his suit against appellant.
On Motion of Appellee for a Rehearing.
The statement in the opinion disposing of the appeal that appellant assigned notes specified to the Connecticut General Life Insurance Company is erroneous, so far as it applied to the note for $2,065 described as payable in installments. That note was for interest stipulated for in the contract covering the loan represented by the $9,000 note and the five notes for $500 each. It was not transferred to said insurance company, but, it seems, was assigned to the United States Bond Mortgage Company; and it appeared in the evidence that $390 of the $1,125 interest paid by appellee January 1, 1925, and $390 of the $1,090 interest paid by him January 1, 1926, was on account of said $2,065 note. It follows that it appeared that only $1,435 of the interest payments of $1,125 and $1,090, aggregating $2,215, was received by appellant as the agent of the insurance company, and that it received the $780 remaining of said payments either on its own account or as the agent of said bond and mortgage company.
In its answer appellant alleged that it "never (quoting) received any payment of interest as the owner of any of the notes described in the plaintiff's petition," and, as we construe it, the undisputed evidence heard at the trial supported the allegation. In that state of the record, we do not think this court erred when it held that it appeared appellant was not liable for the recovery, or any part of it, sought by appellee against it, unless it ought to be said it was estopped to deny such liability. That it was not estopped to make such denial so far as the amount of the payments to the insurance company were concerned, we think clearly appeared in the fact that the transfer of the $9,000 notes and the $500 notes to it were of record and appellee was bound to take notice of the fact that it, and not appellant, owned them.
Whether appellant was estopped to deny that the $780 paid to it on account of the $2,065 note was paid to it as the agent of the bond and mortgage company is another question. There was no evidence showing, or tending in the least to show, that at the time appellee made the payments of $1,125 and $1,090, respectively, he knew appellant had assigned the $2,065 note to the bond and mortgage company, or any one else, or had any reason whatever to believe that appellant was not then the owner of that note. The fact, and only fact as we construe the evidence heard by the court, which could plausibly be claimed to support the charge of estoppel, is that appellant by an instrument in writing dated January 18, 1927, acknowledged payment by appellee in full of the $2,065 note, and undertook to release a lien on lands created by appellee in 1921 to secure the payment of the note. It will be noted the release was executed more than a year after January 1, 1926, the date of the last interest payment of $1,090, and therefore that recitals therein could not have influenced appellee to make either that payment or the one of $1,125 made January 1, 1925. 17 Tex.Jur. 137.
The motion is overruled.