# Jurisdictional Statement — Tobin Landscape & Construction Co. v. Bramlett > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385017_0457%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Jurisdictional Statement - **Published:** January 1, 1987 - **Citation:** 479 U.S. 1072 ## Text 86-691) _ $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. a, | ee eS) ae ee On) «J sia | rene es Se Pe 5 a ae INDEX PAGE ee se eces wi bededwassiv'’ i 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 A ATR a a 1] 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 ee ee eee hee — a —— a eS ae lee ee eee eee ee ery = ld al 2ST = = ” 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 4 a eras Aad ae e 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 Alergy 2 ssi deni ae shail. hens aT Partie fine + fete Tes Shi oink pegites: oy [ca lamerieodtiy A eet hie saa ietiegy: phautste a oe iL : jee rae : = v mee = a «eg i ell RET SE Set” aad eee Eprints op ere 4 % . A PA nie 7 . i ae “} ve rr fa «3 ‘A 7 i ) 7 “Rg ets whee wis Corea Spares er Ae ae wre Wee 2 Sryrtis . — hs i i» i, * om oT ba * = d : oa) “Cae i if > atm ie =.) ce bs pages aD. Te |; Eo ) 7 ; : . é i or — P a © aos atte 2 - - 5 eae M0 PON UROTEA WT Rs Sere eo fina Ei fRie* al i a ieee) | Sl fee i a a VA og Vig & *, oe #i; S049 es a iy =| 1 ei Sere SA TET IIA ¢ J 1 eee arpa = i t - » — bec. nT wf Tyee ea « a3 ou 4 " +s a te h : . i? "th Ce ‘2 a eo - Ss fe ae : bi 7 rahe : = 1 : a ; 2 4 os Sa = fj . A Fe : . ) é af 7 i * hee \ = es i » ve i 210, 213 (Tex. Civ. App. — Dallas 1975, writ dism’d). Appel- lant’s twelfth point of error must, therefore, be overruled and the judgment of the trial court affirmed. John L. McCraw, Jr. Justice PUBLISH 19 = cia a i é iM 7 > ae ’ - | ii vi . | - oe eae ae ~~ soem nee i, 3 Pay? a) nee aes Se a > “4 as ; out ae ge? ; j ot 7 “S i @49 Ose: 7 >..." * ~, v ~i > hen os = 7 i a ait et a AR . % a >e, : 7 " b 7 7 _ : of ‘ : # cane : a a , i ; | =e | = rp 7 * : 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 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385017_0457%3A1. Public record. Not legal advice.