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624 S.W.2d 272

Williams v. Back

Court of Appeals of Texas

Decided October 7, 1981

Court of Appeals of Texas · decided 1981-10-07

Cited by 12 later decisions — most recently April 1999

2 federal appellate · 8 state decisions

Relies on Houston Sash and Door Co., Inc. v. Heaner · Windhorst v. Adcock Pipe and Supply · Windhorst v. Adcock Pipe & Supply

Good law ✅— No negative treatment on recordhow we know

Decided 1981-10-07

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PHILLIPS, Chief Justice,

¶1dissenting.

¶2I respectfully dissent. I would hold that, as a matter of law, a creditor cannot charge usurious interest without the debtor’s actual or constructive knowledge. The statute involved, Tex.Rev.Civ.Stat.Ann. art. 5069-1.06 (1971), is penal in nature and must be strictly construed. Houston Sash & Door Co., Inc. v. Heaner, 577 S.W.2d 217 (Tex.1979). In sending the statement in question which never reached appellant, appellee has only attempted to charge usurious interest. Art. 5069-1.06 requires that appellee actually charge usurious interest. Even the majority opinion states that “[t]he basis of the action is a claim or demand for usury .... ” A claim or demand cannot be made by a creditor unless the debtor is aware of it. A creditor, standing alone in his office, who forcefully writes “Debtor, pay me usurious interest,” and then fails to give it to the debtor has not charged anything.

¶3The majority opinion relies heavily on the words “unilaterally charging” used by the Supreme Court in Windhorst v. Adcock Pipe and Supply, 547 S.W.2d 260 (Tex.1977). A careful reading of the opinion shows that the Court was merely contrasting a charge for interest instituted solely by the creditor as opposed to interest “contracted for” by both the creditor and the debtor. The definition of the word “charge” was not discussed. The Court of Civil Appeals’ opinion in Windhorst, 542 S.W.2d 222, clearly shows that the debtor, as in every case cited by the majority, had actual notice of the interest demanded by the creditor.

¶4Defining “charge” as including knowledge by the debtor is not engrafting an additional element to art. 5069-1.06. It is merely stating that a charge cannot be made in a vacuum. The debtor must be aware of the demand before it is a charge.

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