Midgett v. J. Edelstein Furniture Co.

OPINION DORSEY, Justice. This is an appeal from a judgment against defaulting debtors in a suit on a [333] retail installment contract. Appellants’ Supplemental Answer asserted that “the Plaintiff’s pleadings and attachments thereto show that the claimed obligation sued upon is on its face, usurious and the interest rate exceeds 24% in violation of the Texas Revised Civil Statutes Art. 5069.” This general pleading of usury was not verified by affidavit as required by TEX.R. CIV.P. 93, which provides: A pleading setting up any of the following matters, unless the truth of such matters appear of record, shall be verified by affidavit.... 11. That a contract sued upon is usurious. Unless such plea is filed, no evidence of usurious interest as a defense shall be received. The trial court ruled that no such evidence of usury would be allowed because appellant had not complied with Rule 93, and the court made no findings on the usury defense. Appellants’ first point of error alleges the trial court erred in failing to consider evidence of usury since the contract was incorporated into the plaintiff’s/appellee’s pleadings and contains sufficient information to show on its face that it was usurious, thus fitting within the Rule 93 exception. Appellee disputes that the contract called for a usurious rate of interest, and argues that appellants, by failing to file a verified plea, should not be able to present their defense, and that usury does not appear of record. The narrow question is whether usury appears of record. We hold it does not. ' The pleadings of appellee and the evidence below included the retail installment contract that contained the following information: the amount financed was $2402.26; the annual interest rate was 23.99%; the finance charge was $653.90; the total of payments due was $3056.16, which was to be paid in 24 payments of $128.00 each. Appellants’ argument to the trial court and on appeal is that 24 payments of $128.00 raises the total due to $3072.00 or $15.84 more than the total of payments in the contract and proves usury on the face of the record, bringing appellants within the exception to Rule 93. The trial court’s fourteenth finding of fact stated that the parties intended the final payment to be in the amount of the remaining balance due and no more, since the contract provided that the total of payments due was $3056.16. The underlying question is: to what extent must the trial judge engage in calculation and consult outside sources to determine whether usury “appears” of record in the absence of an unsworn allegation of usury. The appellant argues that, as all relevant information appears in the plaintiff’s pleading, it is merely necessary to do the calculation in order to ascertain the existence of usury. However, neither the maximum allowable rate of interest nor the maximum amount of interest chargeable is apparent from the pleadings of record. Once the trial judge determines the maximum rate of interest, the mathematical problems begin in calculating the maximum amount of interest that could have been charged on a two-year declining balance note. We think the instant case is distinguishable from Pickrell v. Alpha Pipe & Steel, Inc., 406 S.W.2d 956 (Tex.Civ.App. — Amarillo 1966, writ ref’d n.r.e.), where $5,700 was loaned for a six-month period, $1,000 interest was collected, and the maximum legal rate was 10% per annum, because of the simplicity of the calculations required in Pickrell. Wall v. East Texas Teachers Credit Union, 526 S.W.2d 148 (Tex.Civ.App. — Texarkana 1975), reversed on other grounds, 533 S.W.2d 918 (Tex.1976) upon which appellants rely is distinguishable. In Wall, the note’s terms did require the payment of usurious interest, which, unlike the instant case, was not disputed by appellee. See Wall, 533 S.W.2d at 921. In the case at bar, the claim of usury is disputed and usury does not clearly and unambiguously appear on the face of the record. We hold [334] that the trial court did not err in refusing to hear the defense of usury. Appellants’ second point of error alleges that the trial court erred in failing to find usury. As there was no error in refusing appellants’ evidence and defense of usury, there was no error in the trial court’s failure to find usury. Appellants’ first and second points of error are overruled and the judgment of the trial court is AFFIRMED.