Jurisdictional Statement — Tobin Landscape & Construction Co. v. Bramlett
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_ $upreme Court, U.S.
‘ = om Oct 14 1986
Supreme Court of the Uni ted States"
OCTOBER TERM, 1986
No.
TOBIN LANDSCAPE AND CONSTRUCTION COMPANY, INC.,
Appellant,
Vv.
JAMES BRAMLETT,
Appellee.
ON APPEAL FROM THE SUPREME COURT OF TEXAS
JURISDICTIONAL STATEMENT
Law OFFICES OF JOE B. ABBEY
3110 Olympia and York Tower
1999 Bryan Street
Dallas, Texas 75201
(214) 922-9245
By:
y Joe B. Abbey
Bar No. 00789
Counsel for Appellant
October 3, 1986
QUESTION PRESENTED
Whether Tex. Rev. Civ. Stat. Ann. article 5069 — 1.06 is viola-
tive of the Due Process Clause of the Fifth Amendment of the
Constitution of the United States and the Equal Protection
Clause of the Fourteenth Amendment of the Constitution of the
United States when applied to impose an excessive penalty for an
alleged charge of interest made within the first thirty days after
the accrual of a debt, where said charge was the result of inadver-
tence and was not even made until after the actual claim for the
debt plus interest had been set forth in litigation.
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INDEX
PAGE
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ee Ls uae Vk danas A a ace 4 l
ee ay GAG Sc aihin wale a ee oa 08s l
Constitutional provisions and Rules .................. 3
PE I GOONER, ccc cece eeenees 3
OTT PEL TET E TET s
Ee Teen ee
ks ick eked ees sax dedawes's 8
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li
CITATIONS
PAGE
Cases:
Coats v. City of Cincinnati, 402 U.S. 611 (1971) ...... 6
Helwig v. United States, 188 U.S. 605 (1903) ......... 5
St. Louis Iron Mountain & Southern Ry. Co. v.
Pama, Boot Wi. GP CABTSD 5. wc ce wcccdcccs saves 6
United States v. National Dairy Products Corp., 372
re I a do te i a ia 3 6
Constitutions and Statutes:
ULB Gas I Boe och cou bes sk Sl 3
CFI, Greer s I UE once psc caus kdecdasabous 5
Se es ML I bok kv ce ba eat vas een be adea 3
TEX. REV. CIV. STAT. ANN. Article 5069 — 1.06...i & 3
iii
OPINIONS BELOW
The opinions of the Supreme Court of Texas, which appear in
the appendix hereto, p. 12 and 13, infra, are not officially
reported.
The opinion of the Texas Court of Appeals, Sth Supreme
Judicial District is dated March 28, 1986. It is reprinted in the
appendix hereto, p. 14 infra.
JURISDICTION
The judgment of the Supreme Court of Texas, denying its
application for writ of error, no reversible error, was entered on
June 18, 1986. See p. 12, infra. A motion for rehearing was
entertained and denied on July 16, 1986. See p. 13, infra.
A notice of appeal to this Court was duly filed in the Supreme
Court of Texas on August 1, 1986. See p. 21, infra. A supple-
mentary notice of appeal to this Court was also filed with the
Texas Court of Appeals, Sth Supreme Judicial District, Dallas,
Texas, on July 30, 1986, as that court was in possession of the
record of this case. See p. 25, infra.
This appeal is being docketed in this Court within 90 days
from the denial of rehearing below. The jurisdiction of this
Court is invoked under 28 U.S.C. Section 1257(2).
IN THE
Supreme Court of the United States
OCTOBER TERM, 1986
No.
ToRIN LANDSCAPE AND CONSTRUCTION COMPANY, INC.,
Appellant,
Vv.
JAMES BRAMLETT,
Appellee.
ON APPEAL FROM THE SUPREME COURT OF TEXAS
JURISDICTIONAL STATEMENT
Tobin Landscape and Constructicn Company, Inc., the appel-
lant, appeals from the final judgment of the Supreme Court of
Texas, denying its Motion for Rehearing, dated July 16, 1986,
and sustaining its refusal of application for writ of error, no
reversible error, dated June 18, 1986. Said judgment of the
Supreme Court of Texas upheld the judgment of the Texas
Court of Appeals, 5th Supreme Judicial District, holding that
TEX. REV. CIV. STAT. ANN. article 5069 — 1.06 (Vernon
Supp. 1986) is constitutional under both the Fifth and Four-
teenth Amendments to the United States Constitution and Arti-
cle, {, Sections 13 and 19 of the Texas Constitution. 28 U.S.C.
Section 2403(b) may be applicable.
a
CONSTITUTIONAL PROVISIONS AND STATE LAW
FIFTH AMENDMENT, UNITED STATES CONSTITUTION:
No person shall ... be deprived of life, liberty, or prop-
erty, without due process of law...
FOURTEENTH AMENDMENT, UNITED STATES
CONSTITUTION:
No State shall ... deprive any person of life, liberty, or
property without due process of law, nor deny to any person
within its jurisdiction the equal protection of the laws.
TEX. REV. CIV. STAT. ANN. Article 5069 — 1.06:
(1) Any person who contracts for, charges or receives
interest, which is greater than the amount authorized by
this Subtitle, shall forfeit to the obligor three times the
amount of usurious interest contracted for, changed or
received, such usurious interest being the amount the total
interest contracted for, charged, or received exceeds the
amount of interest allowed by law, and reasonable attorney
fees fixed by the court except that in no event shall the
amount forfeited be less than Two Thousand Dollars or
twenty percent of the principal, whichever is the smaller
sum; provided, that there shall be no penalty for any usuri-
ous interest which results from accidental and bona fide
error.
RAISING THE FEDERAL QUESTION
At the earliest available stage of this litigation, the appellant
raised the constitutional claim after having been found guilty of
charging usurious interest. The claim was raised in the appel-
lant’s Brief to the Texas Court of Appeals. The Texas Court of
Appeals noted appellant’s contention that “article 5069 — 1.06
is unconstitutional and violative of the United States Constitu-
tion and stated “[w]e disagree and hold that article 5069 — 1.06
is within constitutional constraints.” p. 17, infra.
The claims of unconstitutionality were reiterated by appellant
before the Supreme Court of Texas in its application for writ of
error. p.'27, infra. The Supreme Court of Texas refused the writ
3
——— e—VOveemmEmr—r—r_r_—aSeoee
of error, no reversible error and, subsequently, rejected appel-
lant’s motion for rehearing. See opinions below, p. 12 and 13,
infra. It thus considered and rejected these federal constitutional
claims.
STATEMENT OF THE CASE
This litigation was originally instituted by the appellant as a
suit on sworn account brought against the appellee for materials
furnished and services rendered in the amount of $6,241.75. The
appellee filed a counterclaim in the trial court, alleging usury
because there was a $93.00 charge on a statement within the
first thirty days after the work was performed. The $93.00
charge was contained in a statement which was sent to the
appellee after suit had been filed by the appellant. Judgment was
entered awarding the appellee the sum of $1,248.00 representing
20% of the claimed principal debt together with attorney’s fees
of $1,600.00 and costs of court plus interest. Also, as a further
penalty imposed by the usury statute, the appellant was denied
all recovery on its claim and thus forfeited its principal debt.
The relevant facts that led to the suit and counterclaim may
be summarized as follows:
(1) The appellant is engaged in the business of landscap-
ing made a proposal to the appellee for the preparation of
certain plant beds, the relocation of some shade trees and
the planting of shrubs, ground cover and ornamental trees.
The appellee received regular reports about the work being
done and, at one point, requested additional plants to be
installed on his property.
(2) When the work was completed, the appellant hand-
delivered a statement to the appellee. Despite the fact that
the appellee admitted that the quality of the work was up to
the standard agreed upon and was worth the money
charged, he refused to pay and later said he was not happy
with the work.
~
(3) The appellant forwarded a demand letter to the
appellee and, when the account remained unpaid, employed
an attorney and sent a second demand letter. Ultimately,
the appellant filed suit on June 9, 1985, which the appellee
answered by a general denial. On August 25, 1985, subse-
quent to the filing and answering of the lawsuit, a secretary
and billing clerk in the appellant’s office prepared and
mailed an invoice to the appellee. The invoice restated the
charges for the work done with one exception. It also set out
a fee which the clerk erroneously denominated “finance
charges.” The trial court later held these “finance charges”
to constitute “interest” as that term is defined in the Texas
usury statute in question here. The appellant was found to
have charged “interest” within the first 30 days after
accrual of the debt, thus making the charge usurious under
the Texas statute. As a result of this inadvertent charge, the
Appellant was subjected to the following penalties: (a) for-
feiture of the entire account, (b) a penalty equivalent to
20% to the account which is payable to the appellee and (c)
attorney’s fees. In this case, the total amounts to a penalty
of approximately 10,000%.
.
THE QUESTION IS SUBSTANTIAL
The question as to the constitutional implications of excessive
penalties has been treated before in various contexts by this
Court. With respect to civil and criminal penalties imposed by
state usury statutes, the questions of due process and equal pro-
tection under the Fifth and Fourteenth Amendments are sub-
stantial ones that should be examined.
This Court has recognized that penal statutes, must meet con-
stitutional due process requirements. Helwig v. United States,
188 U.S. 605 (1903); U.S. Const. amend. VIII. The Texas usury
statute has been unequivocally declared by Texas courts to be
penal in nature. Thus, Article 5069 — 1.06 must be judged by
5
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”
the same standards as any penal or criminal statute as it pro-
vides for forfeiture of principle, tremendous damages and even
conviction for misdemeanor.
Due process requires that a statute be clear and certain in its
language. Article 5069 — 1.06 is unconstitutionally vague as it
provides no clear language to put the appellant or anyone else on
notice of precisely what is required of him or prohibited to him.
By a reading of Article 5069 — 1.06, no reasonable person could
tell that any mere charge of interest within the first 30 days after
accrual of a debt would call down on his head such onerous and
instant penalties. The person sought to be charged under a penal
statute such as the one brought into question here must be made
aware of the full consequences of a violation of the statute and
that his contemplated conduct is proscribed. United States v.
National Dairy Products Corp., 372 U.S. 29 (1963); Coats v.
City of Cincinnati, 402 U.S. 611 (1971).
This Court has also recognized that penalties imposed by stat-
ute can be so severe and oppressive as to be wholly dispropor-
tional to the offense and, hence, obviously unreasonable. Sz.
Louis Iron Mountain & Southern Ry. Co. v. Williams, 251 US.
63 (1919). In this case, the Texas legislature has imposed a
penalty of 10,000% on the appellant for charging interest in the
first month after the appellee’s debt accrued. The penalty
imposed by the statute is actually the unforeseen result of a
series of amendments to the original Texas usury statute and
was not purposefully designed to eradicate what it here seeks to
prohibit, namely, that charge of “interest” for those first fateful
30 days.
The appellant was never accused of any wrongdoing or decep-
tion in this case. It performed its work, furnished the materials
needed and completed the job. For its work and materials, as a
result of the application of the statute in question, the appellant
received nothing. The appellee, on the other hand, now enjoys
the benefit of his contract without having paid anything at all
6
for it. The Supreme Court of Texas, confronted with the consti-
tutional challenge and the Court of Appeals’ validation of Arti-
cle 5069 — 1.06, brushed aside the appellant’s challenge without
comment.
Texas has imposed on the appellant and all those who charge
or receive any form of “interest” in this State, a tremendous
burden and terrible, excessive penalties — penalties that extend
far beyond the offense originally sought to be prohibited and
which are of themselves, unconscionable. The appellant has been
denied its Constitutional rights to due process and equal protec-
tion of law.
CONCLUSION
For these reasons, this Court should note probable jurisdiction
of this appeal.
Respectfully submitted,
Law OFFICES OF JOE B. ABBEY
3110 Olympia and York Tower
1999 Bryan Street
Dallas, Texas 75201
(214) 922-9245
By:
Bar No. 007
Counsel for Appellant
October 3, 1986.
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the Jurisdic-
tional Statement was placed in the United States Mail addressed
to the Clerk of the United States Supreme Court of the United
States, Washington, D.C. 20543 and the attorney of record,
Robert C. Elder, Canterbury, Stuber, Elder & Gooch, 5550 LBJ
Freeway, Suite 800, Dallas, Texas 75204 and the Attorney Gen-
eral for the State of Texas at P.O. Box 12548, Austin, Texas
78711 on this the 23rd day of October, 1986.
J A
ma, B. bby
Counsel fof Appellant
a
STATE OF TEXAS Pee
COUNTY OF DALLAS
Before me, the undersigned authority on this day personally
appeared Joe B. Abbey, who after being duly sworn, declared
that he is the person who executed the foregoing instrumert in
the capacity therein stated and that the statements therein are
true and correct.
SUBSCRIBED AND SWORN TO BEFORE ME, this 23rd
day of October, 1986.
mm and for the
State of Texas
Sim Ettm
Print, Type or Stamp Name
My Commission Expires:
A- AN-FO
10
APPENDIX
1]
+
SUPREME COURT OF TEXAS
P.O. Box 12248
Supreme Court Building
Austin, Texas 78711
Mary M. Wakefield, Clerk
June 18, 1986
Mr. Joe Abbey
3110 Olympia & York Tower
1999 Bryan Street
Dallas, TX 75201
Mr. David Surratt
Canterbury, Stuber, Elder & Gooch
5550 LBJ Freeway, Suite 800
Dallas, TX 75240
RE: Case No. C-5297
STYLE: Tosin LANDSCAPE AND CONSTRUCTION Co., INC.
v. JAMES BRAMLETT
Dear Counsel:
Today, the Supreme Court of Texas refused the above refer-
enced application for writ of error with the notation, No Revers-
ible Error.
Respectfully yours,
Mary M. Wakefield,
Clerk
Blanca E. Morin
Deputy
12
SUPREME COURT OF TEXAS
P.O. Box 12248
Supreme Court Building
Austin, Texas 78711
Mary M. Wakefield, Clerk
July 16, 1986
Mr. Joe Abbey
3110 Olympia & York Tower
1999 Bryan Street
Dallas, TX 75201
Mr. David Surratt
Canterbury, Stuber, Elder & Gooch
5550 LBJ Freeway, Suite 800
Dallas, TX 75240
RE: Case No. C-5297
STYLE: TosBin LANDSCAPE AND CONSTRUCTION Co., INC.
v. JAMES BRAMLETT
Dear Counsel:
Today, the Supreme Court of Texas overruled petitioner’s
motion for rehearing of the application for writ of error in the
above styled case.
Respectfully yours,
Mary M. Wakefield,
Clerk
Blanca E. Morin
Deputy
13
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Ie
Court of Appeals
Fifth District of Texas at Ballas
No. 05-85-00612-CV
TOBIN LANDSCAPE AND CONSTRUCTION COMPANY, INC.,
Appellant,
Vv.
JAMES BRAMLETT,
Appellee.
JUDGMENT
This Court’s judgment of February 19, 1986, is WITH-
DRAWN and this judgment is issued in its place.
In accordance with this Court’s opinion of March 28, 1986,
the judgment of the trial court is AFFIRMED. It is ORDERED
that appellee James Bramlett recover his costs of this appeal
from appellant Tobin Landscape and Construction Co., Inc. and
Lawyers Surety Corporation, as surety on appellant’s appeal
bond.
March 28, 1986.
JOHN L. McCraw, Jr.
Justice
14
Court of Appeals
Fifth District of Texas at Ballas
No. 05-85-00612-CV
ToBIn LANDSCAPE AND CONSTRUCTION COMPANY, INC.,
Appellant,
Vv.
JAMES BRAMLETT,
Appellee.
FROM A DISTRICT COURT OF DALLAS COUNTY,
TEXAS
BEFORE JUSTICES STEPHENS, MCCLUNG AND
MCCRAW
OPINION BY JUSTICE MCCRAW
MARCH 28, 1986
This Court’s opinion of February 19, 1986 is withdrawn and
this opinion is substituted as the option of this Court.
Tobin Landscape and Construction Co., Inc. sued James
Bramlett on a sworn account for landscape development com-
pleted on Bramiett’s property. Bramlett filed a counterclaim
alleging the charging of usurious interest by Tobin. The trial
court granted Bramlett a directed verdict and found that Tobin
had charged usurious interest, from which judgment Tobin now
appeals.
The parties failed to request findings of fact and conclusions
of law or to submit a statement of facts. Therefore, this decision
is rendered on the basis of the submitted transcript, pleadings
and the judgment entered by the trial court, Dorman v. Cook,
262 S.W.2d 744, 746 (Tex. Civ. App. — Beaumont 1952, writ
dism’d), and upon the undisputed facts contained in the parties’
15
iain
briefs. Finnigan v. Blanco County, 670 S.W.2d 313, 318 (Tex.
App. — Austin 1984, no writ) (on rehearing).
Under an agreed contract, Tobin performed landscaping for
Bramlett’s property. Tobin installed and moved numerous
shrubs and then submitted an invoice to Bramlett for $6,241.75
for the work completed. Bramlett failed to pay and Tobin filed
suit. Bramlett, in his answer, claimed that Tobin performed
unauthorized additional work, and Bramlett disputed the
invoice. Further, Bramiett stated that the work was not per-
formed in a good and workmanlike manner.
On August 24, 1984, after the litigation had begun, Tobin
sent Bramlett a second landscape invoice with three additional
items designated as “Finance Charges” for June, July, and
August. Bramlett then filed a counterclaim alleging that the
additional charges were usurious and in violation of the “Texas
Credit Code.” After Tobin presented his case, Bramlett moved
for a directed verdict, which was granted.
In his twelve points of error, Tobin contends that: (1-8) the
provisions of TEX. REV. CIV. STAT. ANN. article 5069-1.06,
(Vernon Supp. 1986), violate both the fifth and fourteenth
amendments of the United States Constitution and article I, sec-
tions 13 and 19 of the Texas Constitution; (9-11) the provisions
of article 5069-1.06 are contrary to public policy and fail to
accomplish their given purpose; and (12) the trial court erred in
finding the later issued statement usurious. For the following
reasons, we overrule each point of error and affirm the judgment
of the trial court.
Tobin contends in his first eight points of error that TEX.
REV. CIV. STAT. ANN. article 5069-1.06 is unconstitutional
and violative of the United States Constitution and the Texas
Constitution. We disagree and hold that article 5069 - 1.06 is
within constitutional constraints.
16
a
Article 5069 - 1.06 provides:
(1) Any person who contracts for, charges or receives inter-
est which is greater than the amount authorized by this
Subtitle, shall forfeit to the obligor three times the amount
of usurious interest contracted for, charged or received,
such usurious interest being the amount the total interest
contracted for, charged, or received exceeds the amount of
interest allowed by law, and reasonable attorney fees fixed
by the court except that in no event shall the amount
forfeited be less than Two Thousand Dollars or twenty
percent of the principal, whichever is the smaller sum; pro-
vided, that there shall be no penalty for any usurious inter-
est which results from an accidental and bona fide error.
The purpose of the usury statutes is to prohibit usury under any
cover or pretext whatever. F.B. & D., Inc. v. Nathan Alterman
Electric Co., 394 S.W. 2d 821, 823 (Tex. Civ. App. — San
Antonio 1954, writ ref’d n.r.e.). While arguably the punitive
results of article 5069 - 1.06 are severe, the penalties are legisla-
tively designed to accomplish designated objectives and will not
be found unconstitutionally excessive except in extraordinary
cases where the fine is such that it “shocks the sense of man-
kind.” State v. Laredo Co., 96 Tex. 461, 467, 73 S.W. 951, 953
(1903). We hold that the penalty rendered herein is not of an
unconstitutional magnitude, thereby carrying out the intended
legislative purpose, of deterring the charge of usurious interest.
Further, with respect to constitutional due process, the states
may exercise great discretion in assessing fines; their actions are
only limited when the penalty assessed is so disproportional to
the offense as to be unreasonable. Pennington v. State, 606
S.W.2d 682, 690 (Tex. 1980). The legislature’s treatment of
usury makes it clear that the charging of excessive interest is a
very serious matter and that the consumer will be protected from
vendors who choose to engage in this abusive and deceptive prac-
tice. Thus, a stringent penalty, as was applied in this case, is
reasonable and bears a rational relationship to the seriousness of
Tobin’s act.
17
Tobin was penalized 20% of the principal, plus reasonable
and necessary attorney’s fees. This amount is well within the
statutory guidelines and thus not disproportional to prescribed
penalties established by the legislature. Therefore, the usury
statute is not violative of Tobin’s constitutional rights. Points of
error one through eight are overruled.
In points of error nine through eleven, Tobin contends that
article 5069- 1.06 is contrary to public policy and fails to
accomplish the purposes for which it was established. We
disagree.
The penal provisions of article 5069 - 1.06 demand that the
“charges” made be statutorily permissive. Consumers can
thereby rely upon the protection offered by the statute when
confronted by the usurious acts of vendors. The usury provisions
are not designed to compensate consumers for actual damages.
Instead they were designed to deter violators and to encourage
enforcement of the statutes by private litigants, thereby placing
the cost of violation on the perpetrators. Anguiano v. Jim Walter
Homes, Inc., 561 S.W.2d 249, 254 (Tex. Civ. App. — San
Antonio 1978, writ ref'd n.r.e.). Clearly, such a policy does not
harm the formation of good faith contracts but instead promotes
valid business dealings through party awareness and acceptance
of required responsibilities. Points of error nine through eleven
are overruled.
Finally, in point of error twelve, Tobin asserts that the trial
court erred in finding that the second invoice contained a usuri-
ous charge and was not merely a miscalculation of interest.
Although we recognize that the defenses of accidental and bona
fide error provide exceptions to the penalties under the usury
statute, article 5069 - 1.06, Tyra v. Carroll Construction Com-
pany, 639 S.W.2d 690, 691 (Tex. 1982), the lack of a statement
of facts makes a review of the evidence regarding these defenses
impossible. In a situation where a statement of facts is not sub-
mitted, it is presumed that there is sufficient evidence to support
the judgment of the trial court. Cowling v. Colligan, 112
S.W.2d 943, 946 (Tex. 1958); Simon v. Watson, 525 S.W.2d
18
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lant’s twelfth point of error must, therefore, be overruled and the
judgment of the trial court affirmed.
John L. McCraw, Jr.
Justice
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Court of Appeals
Fitth District of Texas at Ballas
Ballas County Courthouse
Ballas, Texas 75202-1658
MARCH 28, 1986
CHIEF JUSTICE
CLARENCE A. GUITTARD
JUSTICES
TED M. AKIN CHARLES BEN HOWELL
BILL J. STEPHENS Pat MCCLUNG
JOHN C. VANCE JOHN L. McCraw, Jr.
WARREN WHITHAM ROLLAND T. SCALES
PaTRICK C. GUILLOT ANNETTE STEWART
JOSEPH A. DEVANY CYNTHIA HOLLINGSWORTH
ROBERT C. ELDER, JR.
DAVID SURRATT
CANTERBURY, STUBER, ELDER & GOOCH
5550 LBJ Freeway, Suite 800, Dallas, Texas 75240
JoE B. ABBEY
Law OFFICES OF JOE B. ABBEY
3110 Olympia and York Tower
1999 Bryan Street, Dallas, Texas 75201
Re: 05-85-00612-CV, ToBin LANDSCAPE AND CONSTRUCTION
Co., INC. v. JAMES BRAMLETT.
Counsel:
Please be advised that the Court has decided to publish the
opinion in the above cause handed down on February 19, 1986.
Kenneth P. Stripling, Clerk
(214) 749-0302
Judy Gross, Deputy
jg
Enclosure
ce: Judge John McClellan Marshall 14th Judicial District Court
20
et
+
By
IN THE
Supreme Court of the
State of Texas
No. C 5297
(Court of Appeals)
No. 05-85-00612-CV
ToBIN LANDSCAPING CONSTRUCTION COMPANY, INC.,
Appellant,
Vv.
JAMES BRAMLETT,
Appellee.
NOTICE OF APPEAL TO THE SUPREME COURT
OF THE UNITED STATES
Notice is hereby given that Tobin Landscaping Construction
Company, Inc., the Appellant above-named, hereby appeals to
the Supreme Court of the United States from the final judgment
of the Supreme Court of the State of Texas, overruling Appel-
lant’s Motion for Rehearing of its refusal of the Application for
Writ of Error in this action on July 16, 1986.
This appeal is taken pursuant to 28 U.S.C. Section 1257(2).
Respectfully submitted,
LAw OFFICES OF JOE B. ABBEY
3110 Olympia and York Tower
1999 Bryan Street
Dallas, Texas 75201
(214) 992-9245
Jor B. ABBEY
Bar No. 00789000
21
sitll
IN THE
Supreme Court of the
State of Texas
No. C 5297
(Court of Appeals)
No. 05-85-00612-CV
ToBin LANDSCAPING CONSTRUCTION COMPANY, INC.,
Appellant,
ws
JAMES BRAMLETT,
Appellee.
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the Notice of
Appeal to the Supreme Court of the United States was placed in
the United States Mail addressed to attorney of record, Robert
C. Elder, Jr. Canterbury, Stuber, Elder & Gooch, 5550 LBJ
Freeway, Suite 800, Dallas, Texas 75240, on this the 29th day of
July, 1986.
Joe B. ABBEY
22
IN THE
Supreme Court of the
State of Cexas
No. C 5297
(Court of Appeals)
No. 05-85-00612-CV
ToBIN LANDSCAPING CONSTRUCTION COMPANY, INC.,
Appellant,
Vv.
JAMES BRAMLETT,
Appellee.
VERIFICATION OF SERVICE
STATE OF TEXAS 9s.:
COUNTY OF DALLAS ;
I hereby swear and certify that I have served a copy of Appel-
lant’s Notice of Appeal to the Supreme Court of ‘he United
States on Robert C. Elder, Jr., Canterbury, Stuber Elder &
Gooch, 5550 LBJ Freeway, Suite 800, Dallas, Texas 75240,
Counsel for Appellee, by depositing a copy of the same in a mail
box with first class postage prepaid on the 29th day of July,
1986. I further swear and certify that all parties required to be
served have been served.
Joe B. ABBEY
Before me, the undersigned Notary Public, on this day per-
sonally appeared Joe B. Abbey, who being by me duly sworn on
his oath deposed and said that he is the attorney for Appellant in
the above-entitled and numbered cause; that he has read the
23
Verification of Service and that every statement contained
therein is within his personal knowledge and are true and
correct.
Jor B. ABBEY
SUBSCRIBED AND SWORN TO BEFORE ME, on the
Sth day of August, 1986, to certify which witness my hand and
official seal.
Kim Jetton
Notary Public in and for
Dallas County, Texas
My Commission Expires: 4-24-90
Mary M. Wakefield,
Clerk
24
——< - |.
Ct en
IN THE
Supreme Court of the
State of Texas
No. C 5297
(Court of Appeals)
No. 05-85-00612-CV
ToBIN LANDSCAPING CONSTRUCTION COMPANY, INC.,
Appellant,
Vv.
JAMES BRAMLETT,
} Appellee.
NOTICE OF APPEAL TO THE SUPREME COURT
OF THE UNITED STATES
Notice is hereby given that Tobin Landscaping Construction
Company, Inc., the Appellant above-named, hereby appeals to
the Supreme Court of the United States from the final judgment
of the Supreme Court of the State of Texas, overruling Appel-
lant’s Motion for Rehearing of its refusal of the Application for
Writ of Error in this action on July 16, 1986.
This appeal is taken pursuant to 28 U.S.C. Section 1257(2).
Respectfully submitted,
Law OFFICES OF JOE B. ABBEY
3110 Olympia and York Tower
1999 Bryan Street
Dallas, Texas 75201
(214) 992-9245
Joe B. ABBEY
Bar No. 00789000
Kenneth P. Stripiing,
Clerk, 5th District
25
IN THE
Supreme Court of the
State of Texas
No. C 5297
(Court of Appeals)
No. 05-85-00612-CV
ToBIN LANDSCAPING CONSTRUCTION COMPANY, INC.,
Appellant,
v.
JAMES BRAMLETT,
Appellee.
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the Notice of
Appeal to the Supreme Court of the United States was placed in
the United States Mail addressed to attorney of record, Robert
C. Elder, Jr. Canterbury, Stuber, Elder & Gooch, 5550 LBJ
Freeway, Suite 800, Dallas, Texas 75240, on this the 29th day of
July, 1986.
Joe B. ABBEY
26
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x
f
IN THE
Supreme Court of Cexas
No.
ToBIN LANDSCAPE AND CONSTRUCTION COMPANY, INC.,
Petitioner,
Vv.
JAMES BRAMLETT,
Respondent.
PETITIONER’S APPLICATION FOR WRIT OF ERROR
Law OFFICES OF JOE B. ABBEY
3110 Olympia and York Tower
1999 Bryan Street
Dallas, Texas 75201
(214) 922-9245
By: Joe B. Abbey
Bar No. 00789000
Attorney for Petitioner
27
SUBJECT INDEX
LIST OF NAMES OF PARTIES ..................
Boye Fs fl PPT Ere eer ere
STATEMENT OF THE NATURE OF THE CASE ..
STATEMENT OF JURISDICTION ...............
et SARE ree
FA I oo eis eek ceeds ceca eka
BRIEF OF THR ARWUMEINE 2.0... 0. cece cece
POINT OF ORDER ONE RESTATED:
THE JUDGMENT OF THE COURT OF AP-
PEALS IS INCORRECT BECAUSE THE DAM-
AGE PROVISIONS OF ARTICLE 5069-1.06
V.A.T.S. CANNOT BE CONSTITUTIONALLY
APPLIED.
POINT OF ERROR TWO RESTATED:
THE PENAL AND CRIMINAL PROVISIONS
OF ARTICLE 5069-1.06 VIOLATE THE FIFTH
AND FOURTEENTH AMENDMENTS OF
THE UNITED STATES CONSTITUTION AND
ARTICLE 1, SECTIONS 13 AND 19 OF THE
TEXAS CONSTITUTION.
POINT OF ERROR THREE RESTATED:
THE PENAL AND CRIMINAL PROVISIONS
OF ARTICLE 5069-1.06 DO NOT GIVE FAIR
NOTICE OF THE PROHIBITED CONDUCT IN
ORDER TO COME WITHIN CONSTITU-
TIONAL DUE PROCESS LIMITATIONS.
POINT OF ERROR FOUR RESTATED:
THE PENAL AND CRIMINAL PROVISIONS
OF ARTICLE 5069-1.066 DO NOT CONVEY
SUFFICIENTLY DEFINITE WARNINGS AS
TO THE PROSCRIBED CONDUCT WHEN
MEASURED BY COMMON UNDER-
STANDING AND PRACTICES.
28
3 ans —
PAGE
POINT OF ERROR FIVE RESTATED:
THE PENAL PROVISIONS OF ARITCLE 5069-
1.06 ARE SO EXCESSIVE AND VIOLATIVE
OF THE CONSTITUTIONAL RESTRAINTS
OF THE FIFTH AND FOURTEENTH
AMENDMENTS OF THE UNITED STATES
CONSTITUTION AND THE PROVISIONS OF
THE TEXAS CONSTITUTION AS TO SHOCK
THE SENSE OF MANKIND.
POINT OF ERROR SIX RESTATED:
THE PENAL PROVISIONS OF ARTICLE 5069-
1.06 ARE SO SEVERE AND OPPRESSIVE AS
TO BE WHOLLY DISPROPORTIONATE TO
THE OFFENSE AND ARE OBVIOUSLY UN-
REASONABLE.
POINT OF ERROR SEVEN RESTATED:
THE PENAL PROVISIONS OF ARTICLE 5069-
1.06 ARE NOT FIXED WITH REFERENCE TO
THE ABUSE OF A FINANCE CHARGE WITH-
IN 30 DAYS AFTER THE DEBT ACCRUES ON
A WRITTEN CONTRACT.
POINT OF ERROR EIGHT RESTATED:
THE PENAL PROVISIONS OF ARTICLE 5069-
1.06 WERE NOT DESIGNED FOR THE PUR-
POSE OF DETERRING THE GENERAL PUB-
LIC FROM CHARGING ANY INTEREST
WITHIN 30 DAYS AFTER THE DEBT AC-
CRUES ON A WRITTEN CONTRACT.
ARGUMENT AND AUTHORITIES UNDER
POINTS OF ERROR
ee 38-4]
POINT OF ERROR NINE RESTATED:
THE PENAL PROVISIONS OF ARTICLE 5069-
1.06 ARE CONTRARY TO PUBLIC POLICY
AS THEY ENCOURAGE DEFALCATION ON
CONTRACTS AND DESTROY THE SANCTI-
TY OF CONTRACT.
29
PAGE
POINT OF ERROR TEN RESTATED:
THE PENAL PROVISIONS OF ARTICLE 5069-
1.06 PERFORM A DISSERVICE TO THE PUB-
LIC AS A WHOLE BY ENCOURAGING
AVOIDANCE OF CONTRACT.
POINT OF ERROR ELEVEN RESTATED:
THE PURPOSES OF THE INTEREST-CON-
SUMER CREDIT-CONSUMER PROTECTION
ACT (ARTICLE 5069-1.06 V.A.T.S.) ARE NOT
FURTHERED BY THE LEVY OF EXCESSIVE
PENALTIES ON CONTRACTORS WHO ARE
NEITHER UNSCRUPULOUS NOR ENGAGED
IN ABUSIVE AND DECEPTIVE PRACTICES.
ARGUMENT AND AUTHORITIES UNDER
POINTS OF ERROR
NINE THROUGH ELEVEN ................. 42
POINT OF ERROR TWELVE RESTATED:
THE JUDGMENT OF THE COURT OF AP-
PEALS WAS INCORRECT IN FINDING
THAT THE STATEMENT ISSUED BY PETI-
TIONER AFTER THE SUIT WAS FILED CON-
TAINED A USURIOUS CHARGE OF “INTER-
EST” AS THE CLAIM FOR’ INTEREST
SHOULD HAVE BEEN CONTROLLED BY
THE PLAINTIFF’S PETITION AS A MATTER
OF LAW.
ARGUMENT AND AUTHORITIES UNDER
POINT OF ERROR TWELVE ................ 43-44
30
LIST OF NAMES OF PARTIES
The following is a complete list of all parties to this action:
NAME
Plaintiff....... Tobin Landscape & Construction
Company, Inc.
Defendant..... James Bramlett
LIST OF AUTHORITIES
CASES
A.B. SMALL AND COMPANY V. AMERICAN SUGAR
REFINING Co., 267 U.S. 233 (1925)...............
ANGUIANO V. JIM WALTER Homes, INC., 561 S.W.2d
249 (Tex Civ. App. — San Antonio, 1978), writ ref.
ep pat Si SRIF end 9 i A- AEe Pera a
BLAKE V. GRANT, 65 Wash. 2d 410, 397 P. 2d 843
Ce Gach Ase ce 0. C4A06 eee carb else engeene
Boyce Motor Lines, INc. v. UNITED STATES, 342
ii slr ab9.4.0. 6 4 Ce eNed Oh5.66s0000 0
CLEVELAND C.C. St. L. RAILWAY COMPANY V.
WELLS, 65 Ohio St. 313, 62 N.E. 332 (1901) ......
Coats v. City OF CINCINNATI, 402 U.S. 611 (1971) ..
GARDNER V. LOVEGREN, 27 Wash., 356, 67 P. 615
RRR Rp er err Tee ee ee err
GIACCIO V. STATE OF PENNSYLVANIA, 382 U.S. 399
er le aie Ca eek ceed uae sdse «
HELWIG Vv. UNITED STATES, 188 U.S. 605 (1903) .....
LANZETTA V. STATE OF NEW JERSEY, 306 U.S. 451
ME eS ea err eT ee re Pee eee
LONE STAR Gas Co. v. KELLY, 140 Tex. 15, 165
Ns cca haath nso s bicdeeneesees
St. Louis IRON MOUNTAIN & SOUTHERN Ry. Co. v.
po RN 0
STATE V. LAREDO IcE Co., 96 Tex. 461, 73 S.W. 951
A RR ae 6 es ee chew bees bus
UNITED STATES V. NATIONAL DAIRY PRODUCTS CoRrRP.,
I i oo la waa w ec eak ue 00s
WAYNE COUNTY V. STEEL, 121 Neb. 438, 237 N.W.
Ned aan ta Gs baat hak eee’
ZUEST V. INGRA, 134 N.J.L. 15, 45 A. 2d 810 (1946). .
31
39
CONSTITUTIONS
Ne seesaw eseesenis 39
ESS Sr 39
SE ETE 39-40
ee ee, I ED 8g Bo te ees 39
pS) eee 38-39
STATUTES
TEX. REV. CIV. STAT. ANN. art. 5069-1.06...... 42
32
ws
IN THE
Supreme Court of Cexas
No.
ToBIN LANDSCAPE AND CONSTRUCTION COMPANY, INC.,
Petitioner,
v.
JAMES BRAMLETT,
Respondent.
PETITIONER'S APPLICATION FOR WRIT OF ERROR
TO THE HONORABLE SUPREME COURT OF TEXAS:
Petitioner, Tobin Landscape & Construction Company, Inc.
(“Tobin”), Appellant in Cause No. 05-85-00612-CV in the
Court of Appeals for the Fifth Supreme Judicial District of
Texas, at Dallas, Texas, and Plaintiff in the district court,
respectfully submits this Application for Writ of Error to correct
errors of law committed by the Court of Appeals in affirming
judgment in favor of Respondent, James Bramlett (“Bramlett’’),
Appellee below and Defendant in the district court.
STATEMENT OF THE NATURE OF THE CASE
This is a suit on sworn account brought by Tobin against
Bramlett for materials furnished and services rendered in the
amount of $6,241.75. Appellee filed a counterclaim alleging
usury because there was a $93.00 charge on a statement within
the first thirty days after the work was performed, a statement
which was sent to Bramlett after this suit was filed. Judgment
was entered awarding Bramlett the sum of $1,248.00 represent-
ing 20% of the claimed principal debt together with attorney’s
fees of $1,600.00 and costs of court plus interest. In addition,
Tobin was denied all recovery on its claim.
33
te Vater xg BSS bela as
i‘ - : A
-
4
STATEMENT OF JURISDICTION
The Supreme Court has jurisdiction of this suit under Article
5, Section 3 of the Texas Constitution 2nd Title 2, Section
22.001 of the Texas Government Code.
POINTS OF ERROR
POINT ONE
THE JUDGMENT OF THE COURT OF APPEALS IS
INCORRECT BECAUSE THE DAMAGE PROVISIONS
OF ARTICLE 5069-1.06 V.A.T.S. CANNOT BE CONSTI-
TUTIONALLY APPLIED.
POINT TWO
THE PENAL AND CRIMINAL PROVISIONS OF ARTI-
CLE 5069-1.06 VIOLATE THE FIFTH AND FOUR-
TEENTH AMENDMENTS OF THE UNITED STATES
CONSTITUTION AND ARTICLE 1, SECTIONS 13 AND
19 OF THE TEXAS CONSTITUTION.
POINT THREE
THE PENAL AND CRIMINAL PROVISIONS OF ARTI-
CLE 5069-1.06 DO NOT GIVE FAIR NOTICE OF THE
PROHIBITED CONDUCT IN ORDER TO COME WITHIN
CONSTITUTIONAL DUE PROCESS LIMITATIONS.
POINT FOUR
THE PENAL AND CRIMINAL PROVISIONS OF ARTI-
CLE 5069-1.06 DO NOT CONVEY SUFFICIENTLY DEFI-
NITE WARNINGS AS TO THE PROSCRIBED CONDUCT
WHEN MEASURED BY COMMON UNDERSTANDING
AND PRACTICES.
34
POINT FIVE
THE PENAL PROVISIONS OF ARTICLE 5069-1.06
ARE SO EXCESSIVE AND VIOLATIVE OF THE CON-
STITUTIONAL RESTRAINTS OF THE FIFTH AND
FOURTEENTH AMENDMENTS OF THE UNITED
STATES CONSTITUTION AND THE PROVISIONS OF
THE TEXAS CONSTITUTION AS TO SHOCK THE
SENSE OF MANKIND.
POINT SIX
-THE PENAL PROVISIONS OF ARTICLE 5069-1.06
ARE SO SEVERE AND OPPRESSIVE AS TO BE
WHOLLY DISPROPORTIONATE TO THE OFFENSE
AND ARE OBVIOUSLY UNREASONABLE.
POINT SEVEN
THE PENAL PROVISIONS OF ARTICLE 5069-1.06
ARE NOT FIXED WITH REFERENCE TO THE AS3BUSE
OF A FINANCE CHARGE WITHIN 30 DAYS AFTER
THE DEBT ACCRUES ON A WRITTEN CONTRACT.
POINT EIGHT
THE PENAL PROVISIONS OF ARTICLE 5069-1.06
WERE NOT DESIGNED FOR THE PURPOSE OF DETER-
RING THE GENERAL PUBLIC FROM CHARGING ANY
INTEREST WITHIN 30 DAYS AFTER THE DEBT
ACCRUES ON A WRITTEN CONTRACT.
POINT NINE
THE PENAL PROVISIONS OF ARTICLE 5069-1.06
ARE CONTRARY TO PUBLIC POLICY AS THEY
ENCOURAGE DEFALCATION ON CONTRACTS AND
DESTROY THE SANCTITY OF CONTRACT.
35
a ee ee
ac at te mr a a nS a. AC Tt Relic ba eb TT 8
POINT TEN
THE PENAL PROVISIONS OF ARTICLE 5069-1.06
PERFORM A DISSERVICE TO THE PUBLIC AS A
WHOLE BY ENCOURAGING AVOIDANCE OF
CONTRACT.
POINT ELEVEN
THE PURPOSES OF THE INTEREST-CONSUMER
CREDIT-CONSUMER PROTECTION ACT (ARTICLE
5069-1.06 V.A.T.S.) ARE NOT FURTHERED BY THE
LEVY OF EXCESSIVE PENALTIES ON CONTRACTORS
WHO ARE NEITHER UNSCRUPULOUS NOR
ENGAGED IN ABUSIVE AND DECEPTIVE PRACTICES.
POINT TWELVE
THE JUDGMENT OF THE COURT OF APPEALS WAS
INCORRECT IN FINDING THAT THE STATEMENT
ISSUED BY PETITIONER AFTER THE SUIT WAS FILED
CONTAINED A USURIOUS CHARGE OF “INTEREST”
AS THE CLAIM FOR INTEREST SHOULD HAVE BEEN
CONTROLLED BY THE PLAINTIFF'S PETITION AS A
MATTER OF LAW.
FACT STATEMENT
Petitioner Tobin made a proposa! to Respondent Bramlett for
preparing beds, relocating shade trees and planting shrubs,
ground cover and ornamental trees (S.F. p. 4; Ex. 1). The work
was done and daily reports were prepared on April 14, April 26,
and May 3 (S.F. p. 6; Ex. 2, 3 and 4). Bramlett requested addi-
tional plants (S.F. p. 7, 8). Tobin hand delivered a statement to
Bramlett’s office (S.F. p. 9; Ex. 5). Bramlett had a reputation for
not paying his bills (S.F. p. 9, 10 and 16). The quality of the
work was up to the standard agreed upon and was worth
$6,241.75 or more (S.F. p. 11, 12, 17, 18, 19, 25, and 26). Petiti-
tioner Tobin forwarded a demand letter to Bramiett on May 10,
1984, when the account remained unpaid (S.F. p. 21 and 22: Ex.
36
7). Bramlett responded on May 16 that he was unhappy with the
job (S.F. p. 21, Ex. 8). Tobin employed an attorney and a
demand letter was sent to Bramlett on May 24 (S.F. 23; Ex. 10).
Tobin filed suit on June 9 (Tr. p. 3-8). Bramlett filed a General
Denial on July 24 (Tr. p. 8). Tobin mailed an invoice on August
25, after suit was filed and answered, which purported to include
“finance charges” (S.F. p. 23; Ex. 9). The statement was pre-
pared and mailed by a secretary and billing clerk of Petitioner
Tobin (Tr. p. 27; S.F. p. 28-32).
BRIEF OF THE ARGUMENT
POINTS OF ERROR ONE THROUGH EIGHT RESTATED
POINT ONE
THE JUDGMENT OF THE COURT OF APPEALS IS
INCORRECT BECAUSE THE DAMAGE PROVISIONS
OF ARTICLE 5069-1.06 V.A.T.S. CANNOT BE CONSTI-
TUTIONALLY APPLIED.
POINT TWO
THE PENAL AND CRIMINAL PROVISIONS OF ARTI-
CLE 5069-1.06 VIOLATE THE FIFTH AND FOUR-
TEENTH AMENDMENTS OF THE UNITED STATES
CONSTITUTION AND ARTICLE 1, SECTIONS 13 AND
19 OF THE TEXAS CONSTITUTION.
POINT THREE
THE PENAL AND CRIMINAL PROVISIONS OF ARTI-
CLE 5069-1.06 DO NOT GIVE FAIR NOTICE OF THE
PROHIBITED CONDUCT IN ORDER TO COME WITHIN
CONSTITUTIONAL DUE PROCESS LIMITATIONS.
POINT FOUR
THE PENAL AND CRIMINAL PROVISIONS OF ARTI-
CLE 5069-1.06 DO NOT CONVEY SUFFICIENTLY DEFI-
NITE WARNINGS AS TO THE PROSCRIBED CONDUCT
37
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WHEN MEASURED BY COMMON UNDERSTANDING
AND PRACTICES.
POINT FIVE
THE PENAL PROVISIONS OF ARTICLE 5069-1.06
ARE SO EXCESSIVE AND VIOLATIVE OF THE CON-
STITUTIONAL RESTRAINTS OF THE FIFTH AND
FOURTEENTH AMENDMENTS OF THE UNITED
STATES CONSTITUTION AND THE PROVISIONS OF
THE TEXAS CONSTITUTION AS TO SHOCK THE
SENSE OF MANKIND.
POINT SIX
THE PENAL PROVISIONS OF ARTICLE 5069-1.06
ARE SO SEVERE AND OPPRESSIVE AS TO BE
WHOLLY DISPROPORTIONATE TO THE OFFENSE
AND ARE OBVIOUSLY UNREASONABLE.
POINT SEVEN
THE PENAL PROVISIONS OF ARTICLE 5069-1.06
ARE NOT FIXED WITH REFERENCE TO THE ABUSE
OF A FINANCE CHARGE WITHIN 30 DAYS AFTER
THE DEBT ACCRUES ON A WRITTEN CONTRACT.
POINT EIGHT
THE PENAL PROVISIONS OF ARTICLE 5069-1.06
WERE NOT DESIGNED FOR THE PURPOSE OF DETER-
RING THE GENERAL PUBLIC FROM CHARGING ANY
INTEREST WITHIN 30 DAYS AFTER THE DEBT
ACCRUES ON A WRITTEN CONTRACT.
ARGUMENT AND AUTHORITIES
UNDER POINTS ONE THROUGH EIGHT
The Texas Constitution, Article 16, Section 11 provides in
pertinent part:
38
The Legislature shall have authority to classify loans and
lenders, license and regulate lenders, define interest and fix
maximum rates of interests ...; provided further, that in
contracts where no rate of interest is agreed upon, the rate
shall not exceed six percent (6%) per annum...
The United States Constitution, in the Fifth and Fourteenth
Amendments, prohibits deprivation of life, liberty or property
without due process of law. This guarantee of fundamental liber-
ties and due process is confirmed by the Texas Constitution,
Article 1, Section 13 and 19. When viewed against these prohibi-
tions, the penalty provisions of Article 5069 - 1.06 V.A.T.S. can-
not be constitutionally applied.
This Court has stated that ary charge of interest within 30
days after an account or contract is due and payable violates the
penal provisions of the usury statutes, prompting the following
penalties: (1) forfeiture of the entire account, (2) a penalty
equivalent to 20% of the account payable to Appellee and (3)
attorney’s fees. In this case, the total amounts to a penalty of
approximately 10,000%. Certainly, a4 person of ordinary intel-
ligence would consider excessive and unreasonable a 10,000%
penalty for a inadvertant charge included in a statement that
was not prepared or mailed until well after this lawsuit was filed
and answered. Here, there was no actual loss to Bramlett
because none of the charged interest was pled for in Plaintiff's
Petition. While there is a logical economic reason for a delay in
charging interest on an open account, no economic or social
hardship is caused by charging interest on a contract from the
day it is due and payable.
Petitioner Tobin urges that Article 5069 - 1.06 must be judged
by the same standards as any penal or criminal! statute as it
provides for forfeiture of principle, treble damages and convic-
tion for misdemeanor. Due process requirements must be met
by this statute. See, Wayne County v. Steel, 121 Neb. 438, 237
N.W. 288 (1931); Zuest v. Ingra, 134 N.J.L. 15, 45 A. 2d 810
(1946); Cleveland C.C. St. L. Railway Company v. Wells, 65
Ohio St. 313, 62 N.E. 332 (1901); Blake v. Grant, 65 Wash. 2d
39
410, 397 P. 2d 843 (1964); Gardner v. Lovegren, 27 Wash. 356,
67 P. 615 (1902); Helwig v. United States, 188 U.S. 605, 23
S.Ct 427, 47 L. Ed. 614 (1903).
Due process requires certainty. Article 5069 - 1.06 is unconsti-
tutionally vague as it provides no clear language to put Peti-
tioner on notice of precisely what is required of him or prohib-
ited to him. A.B. Small and Company v. American Sugar
Refining Co., 267 U.S. 233 (1925); Lone Star Gas Co. v. Kelly,
140 Tex. 15, 165 S.W. 2d 446 (1942); Boyce Motor Lines, Inc.
v. United States, 342 U.S. 337 (1952). The person sought to be
charged under a penal statute such as the usury statute must be
made aware of the full consequences of violation of the act and
that his contemplated conduct is proscribed. Article 5069 - 1.06
V.A.T.S. does not do this. United States v. National Dairy
Products Corp., 372 U.S. 29 (1963); Coats v. City of Cincinnati,
402 US. 611 (1971); Giaccio v. State of Pennsylvania, 382 U.S.
399 (1966); Lanzetta v. State of New Jersey, 306 U.S. 451
(1939).
Not only is the statute unconstitutionally vague, the penalty
imposed upon Petitioner Tobin by the statute is clearly exces-
sive. Courts in this state have upheld usury penalties that did not
constitute an excessive fine in violation of Texas Constitution,
Article 1, Section 13. Anguiano v. Jim Walter Homes, Inc., 561
S.W. 2d 249 (Tex Civ. App. — San Antonio, 1978), writ ref.
n.r.e. (holding that a fine of twice the finance charge and reason-
able attorneys fees was not excessive); State v. Laredo Ice Co.,
96 Tex. 461, 73 S.W. 951 (1903) (where the Court allowed for
legislative discretion only when the penalty was not so excessive
as to “shock the sense of mankind”’).
If a penalty of 10,000% as was applied here against Petitioner
Tobin is not excessive, there is surely no set of facts that would
constitute an excessive penalty. Clearly, the drafters of the U.S.
and Texas Constitutions did not intend the present result. A
10,000% penalty is so grossly unreasonable as to be shocking.
Petitioner asks this Court to consider the actual offense com-
plained of here by Bramlett. After suit had been filed, Petitioner
40
issued a statement showing a “finance charge” for the first 30
days after the debt accrued. The abuse sought to be deterred is a
one month finance charge. The legislature has abused its discre-
tion in imposing a fine of 10,000% where, as here, that penalty is
so severe and oppressive as to be wholly disproportional to the
offense and obviously unreasonable. St. Louis Iron Mountain &
Southern Ry. Co. v. Williams, 251 U.S. 63 (1919). In this case,
the penalty is the unforeseen result of a series of amendments to
the original usury statute and was not designed to eradicate
what it here seeks to prohibit, namely, the charging of “interest”
for the first 30 days after a contract sum becomes due and paya-
ble. The statute states that the penalty is to be imposed for
charges of “interest” over twice the allowable rate, with no spe-
cific reference to the penalty being imposed for a one month
finance charge.
POINTS OF ERROR NINE THROUGH ELEVEN
RESTATED
POINT NINE
THE PENAL PROVISIONS OF ARTICLE 5069 - 1.06
ARE CONTRARY TO PUBLIC POLICY AS THEY
ENCOURGAGE DEFALCATION ON CONTRACTS AND
DESTROY THE SANCTITY OF CONTRACT.
POINT TEN
THE PENAL PROVISIONS OF ARTICLE 5069 - 1.06
PERFORM A DISSERVICE TO THE PUBLIC AS A
WHOLE BY ENCOURAGING AVOIDANCE OF
CONTRACT.
POINT ELEVEN
THE PURPOSES OF THE INTEREST-CONSUMER
CREDIT-CONSUMER PROTECTION ACT (ARTICLE
5069 - 1.06 V.A.T.S.) ARE NOT FURTHERED BY THE
LEVY OF EXCESSIVE PENALTIES ON CONTRACTORS
4]
WHO ARE NEITHER UNSCRUPULOUS NOR
ENGAGED IN ABUSIVE AND DECEPTIVE PRACTICES.
ARGUMENT AND AUTHORITIES UNDER POINTS NINE
THROUGH ELEVEN
The declaration of legislative intent in the Interest-Consumer
Credit-Consumer Protection Act (Article 5069 - 1.06 V.A.T.S)
states that unscrupulous operators, lenders and vendors are pres-
ently engaged in many abusive and deceptive practices in the
conduct of their business causing great social and economic
hardship to the citizens of Texas. Thus, it was the clear intent of
the Texas Legislature to protect the citizens of Texas from these
abuses and deceptions.
Nothing in the record of this case implies that Petitioner
Tobin is in any way unscrupulous or that its actions were decep-
tive. Petitioner performed work, furnished materials and simply
sought to be paid. Yet, the usury statute, as it is written,
encouraged Respondent Bramlett to violate his contract with
Petitioner and defalcate on his obligations after Petitioner fully
performed. Respondent now enjoys the benefits of his contract
without any payment being made by him for the services and
materials he received. Petitioner, who inadvertently charged
interest during the first 30 days after the debt accrued, is placed
in the position of being considered unscrupulous while Respon-
dent is allowed to “walk” the contract and receive an additional
monetary benefit on top of that.
A broader public is served by preserving the sanctity of con-
tract. The penal provisions of Article 5069 - 1.06 were provided
for extra damage recovery so that consumers would have an
incentive for pursuing their claims, but, instead have becoine so
excessive as to not be in furtherance of the statute’s purpose at
all. In fact, the statute’s provisions encourage dishonesty and
avoidance of contract.
42
POINT OF ERROR TWELVE RESTATED
POINT TWELVE
THE JUDGMENT OF THE COURT OF APPEALS WAS
INCORRECT IN FINDING THAT THE STATEMENT
ISSUED BY PETITIONER AFTER THE SUIT WAS FILED
CONTAINED A USURIOUS CHARGE OF “INTEREST”
AS THE CLAIM FOR INTEREST SHOULD HAVE BEEN
CONTROLLED BY THE PLAINTIFF'S PETITION AS A
MATTER OF LAW.
ARGUMENT AND AUTHORITIES UNDER POINT
TWELVE
Plaintiff's Petition, filed on June 9, 1984, prayed for recovery
of the account in the amount of $6,241.75 plus statutory
prejudgment interest in said amount at the rate of 6% and
postjudgment interest at the rate of 9% (Tr. 3 and 4). After the
suit was filed, a statement was issued by a billing clerk on
August 25, 1984, which contained the purported usurious charge
(Tr. 27; S.F. p. 28-32).
Petitioner urges that the pleadings control the amount of
interest charged by Petitioner as a matter of law. The statement
issued after suit was filed here contained an inadvertent mistake
and miscalculation of interest. For that reason alone, Petitioner
should not have been found liable for usury. Petitioner urges
further that, even had there been no miscalculation of interest,
the pleadings as a matter of law should control the issue of the
interest being sought, not an unverified statement issued after
suit has already been filed.
It should be obvious that the amount of interest Petitioner
sought to charge was the amount alleged in its Plaintiff's Peti-
tion, not what was stated in an extraneous, unverified statement
not even prepared until well-after suit was instituted and
answered. Had Petitioner intended to charge the usurious inter-
est alleged to have been sought here, it is only logical that the
claim for interest would have been included in the Petition itself.
43
———
No such usurious charge is to be found in Plaintiff's Petition. As
a matter of law, the subsequent “charge’’, which Petitioner never
actually attempted to collect at any time, should be disregarded
for the purpose of determining whether or not usury has been
charged where, as here, said charge of interest was made after
suit was filed. At some point, the interest claimed by Petitioner
became certain. Petitioner Tobin urges that that time was when
suit was filed.
PRAYER FOR RELIEF
For the reasons stated, Petitioner respectfully submits that
this Application for Writ of Error should be granted, and that
the Supreme Court should reverse the judgment of the Court of
Appeals for the Fifth Supreme Judicial District of Texas, Dal-
las, Texas, and reverse the judgment of the 14th District Court
of Dallas County, Texas, rendering judgment for Petitioner in
the amount sought in Plaintiff's Original Petition and denying
all relief sought by Respondent, og, in the alternative, remanding
this cause for further proceedings consistent with the ruling of
this Court, or, in the alternative, granting Petitioner a new trial.
Law OFFICES OF JOE B. ABBEY
3110 Olympia and York Tower
1999 Bryan Street
Dallas, Texas 75201
(214) 922-9245
Joe B. Abbey
Bar No. 00789000
Attorney for Petitioner
to
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the Applica-
tion for Writ of Error was placed in the United States Mail
addressed to attorney of record, Robert C. Elder, Jr.,
Canterbury, Stuber, Elder & Gooch, 5550 LBJ Freeway, Suite
800, Dallas, Texas 7524 on this the 23rd day of April, 1986.
Joe B. Abbey
Attorney for Petitioner
45
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