McKAY, Justice.
This is an appeal from a suit brought by Taylor Cotton Oil Company (Taylor) against the Estate of Robert M. Martindale, deceased (Martindale), on sworn account for goods and materials sold to Martindale. Martindale counterclaimed for alleged balance due on the account, for offset for usurious interest, and to remove cloud from title to certain real estate. Trial was to the court; judgment was rendered for Taylor for $20,489.54, prejudgment interest, and attorney’s fees of $5,000, and Martindale appeals.
Taylor alleged Martindale was indebted to it in the sum of $20,489.84, and itemized a long list of debits and credits over a ten year period. Martindale counterclaimed (also called cross-action), with a like itemized list, alleging Taylor owed Martindale $10,071.07.
During the period involved in this suit, 1962 to 1972, Taylor was operating a cotton oil mill, and was dependent upon purchases of cotton seed from cotton gins for raw material for the mill. Martindale operated two gins during the period — North Martin-dale gin and Santa Clara gin. Martindale sold cotton seed to Taylor and Taylor sold bagging and ties for baling cotton to Mar-tindale. At times Taylor also made cash advances to Martindale, and bags and ties were sold to Martindale on credit. Cash advances would sometimes be made by Taylor to Martindale in the spring — probably April — and the cotton seed would not be delivered to Taylor until July or August. At the end of the ginning season if Martin-dale owed Taylor more than Taylor owed Martindale, the balance was carried forward to the next July and August by Taylor.
Payments on a note owed by Martindale to an Austin bank were made by Taylor in 1965 and in 1967, each in the amount of $8,000. Payment was made to Calcasieu Lumber Company in 1968 to pay Martin-dale’s indebtedness to Calcasieu in the sum of $18,220.86, a part of which was for indebtedness other than the bank note. Taylor’s witness Stiles testified that Martindale never directed Taylor how to apply any payments made to Taylor by Martindale in cash or cotton seed, and that any advance made to Martindale was payment for cotton seed to be delivered later.
The trial court made extensive findings of fact and conclusions of law.
Martindale requested further findings and conclusions which were refused by the trial court.
Martindale, appellant here, asserts that the controlling issue in this case is one of law — whether Sec. 2.725, Tex.Bus. & Comm. Code (U.C.C.)
or Art. 5527(3)
, Tex.Rev. Civ.Stat. is applicable to the facts of this case. Sec. 2.725(a) provides: “An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued.” It also provides by agreement the parties may reduce the period but may not extend it. Art. 5527(3) provides: “There shall be commenced and prosecuted within four years after the cause of action shall have accrued * * * actions * * * upon mutual and current accounts concerning the trade of merchandise between merchant and merchant, their factors or agents; and the cause of action shall be considered as having accrued on a cessation of the dealings in which they were interested together.”
The trial found that the transactions between Taylor and Martindale “were in the form of a mutual and current account concerning the trade of merchandise between merchant and merchant,” that Art. 5527(3) applied and that the limitations period began to run upon the cessation of dealings between the parties on March 30, 1972.
Martindale points out that Sec. 2.102, U.C.C., provides that “(u)nless the context otherwise requires, this chapter [Sales] applies to transactions in goods * * *,” and that such section together with Sec. 2.106(a) [Definitions] demonstrate that the questions here presented are controlled by the U.C.C.-“A ‘sale’ consists in the passing of title from the seller to the buyer for a price.” It is also pointed out by Martindale that Sec. 2.310(1) provides, “Unless otherwise agreed payment is due at the time and place at which the buyer is to receive the goods even though the place of shipment is the place of delivery.” Martindale further. maintains that Sec. 2.507 and under Sec. 2.725(b) the four year period begins to run from the time of tender of delivery of goods.
Taylor contends that the dealings between Taylor and Martindale comprise a mutual and current account between merchants within Art. 5527(3), that advances
made on the account by Taylor to Martin-dale are part of the account sued on and that payments to the Austin bank and Cal-casieu by Taylor on behalf of Martindale became obligations of Martindale to Taylor.
The issue is thus drawn: Did the statute of limitations begin to run each time there was a transaction between Taylor and Mar-tindale, or did it begin to run on cessation of the dealings between them? There appears to be no argument that the four year statute applies here — whether under Sec. 2.725(b) [a cause of action accrues when the breach occurs, and a breach of warranty occurs when tender of delivery is made] or under Art. 5527(3). We are of the opinion that Art. 5527(3) controls, and we therefore affirm the judgment of the trial court. In our view Art. 5527(3) is not inconsistent with U.C.C., but, instead, supplements it.
While U.C.C. Sec. 10-103 provides that “except as provided in the following section, all acts and parts of acts inconsistent with this Act are hereby repealed,” Art. 5527 was not named as repealed or excepted. Furthermore, apparently the Legislature did not intend for the U.C.C. to repeal Art. 5527 inasmuch as the 60th Legislature enacted the U.C.C. in 1967, and then the 66th Legislature amended Art. 5527 in 1979. This last expression of the Legislature caused Art. 5527 to conform to the U.C.C. in that actions for debts have a four year limitation. However, the additional provision of 5527(3) providing that on mutual and current accounts between merchants the cause of action accrues on cessation of dealings was retained by re-enactment.
Martindale argues not only that Sec. 2.725 applies to the instant fact situation but that custom and usage cannot be used to alter its terms and that limitations began to run at the time and place each shipment of goods was delivered to Martindale; he further complains that a holding contrary to such argument would be in violation of the terms of the sale since the statement of account to Martindale attached to Taylor’s pleading provided “Terms: Net Cash.” We do not agree with Martindale’s argument and complaint.
The trial court found that during the ten year period Martindale sold cotton seed to Taylor during ginning season, that Taylor sold bagging and ties to Martindale, that advance payments were made to Mar-tindale and that payments to others were made by Taylor for Martindale, and that a record of all these transactions was properly kept on Taylor’s books and records.
Free access — add to your briefcase to read the full text and ask questions with AI
McKAY, Justice.
This is an appeal from a suit brought by Taylor Cotton Oil Company (Taylor) against the Estate of Robert M. Martindale, deceased (Martindale), on sworn account for goods and materials sold to Martindale. Martindale counterclaimed for alleged balance due on the account, for offset for usurious interest, and to remove cloud from title to certain real estate. Trial was to the court; judgment was rendered for Taylor for $20,489.54, prejudgment interest, and attorney’s fees of $5,000, and Martindale appeals.
Taylor alleged Martindale was indebted to it in the sum of $20,489.84, and itemized a long list of debits and credits over a ten year period. Martindale counterclaimed (also called cross-action), with a like itemized list, alleging Taylor owed Martindale $10,071.07.
During the period involved in this suit, 1962 to 1972, Taylor was operating a cotton oil mill, and was dependent upon purchases of cotton seed from cotton gins for raw material for the mill. Martindale operated two gins during the period — North Martin-dale gin and Santa Clara gin. Martindale sold cotton seed to Taylor and Taylor sold bagging and ties for baling cotton to Mar-tindale. At times Taylor also made cash advances to Martindale, and bags and ties were sold to Martindale on credit. Cash advances would sometimes be made by Taylor to Martindale in the spring — probably April — and the cotton seed would not be delivered to Taylor until July or August. At the end of the ginning season if Martin-dale owed Taylor more than Taylor owed Martindale, the balance was carried forward to the next July and August by Taylor.
Payments on a note owed by Martindale to an Austin bank were made by Taylor in 1965 and in 1967, each in the amount of $8,000. Payment was made to Calcasieu Lumber Company in 1968 to pay Martin-dale’s indebtedness to Calcasieu in the sum of $18,220.86, a part of which was for indebtedness other than the bank note. Taylor’s witness Stiles testified that Martindale never directed Taylor how to apply any payments made to Taylor by Martindale in cash or cotton seed, and that any advance made to Martindale was payment for cotton seed to be delivered later.
The trial court made extensive findings of fact and conclusions of law.
Martindale requested further findings and conclusions which were refused by the trial court.
Martindale, appellant here, asserts that the controlling issue in this case is one of law — whether Sec. 2.725, Tex.Bus. & Comm. Code (U.C.C.)
or Art. 5527(3)
, Tex.Rev. Civ.Stat. is applicable to the facts of this case. Sec. 2.725(a) provides: “An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued.” It also provides by agreement the parties may reduce the period but may not extend it. Art. 5527(3) provides: “There shall be commenced and prosecuted within four years after the cause of action shall have accrued * * * actions * * * upon mutual and current accounts concerning the trade of merchandise between merchant and merchant, their factors or agents; and the cause of action shall be considered as having accrued on a cessation of the dealings in which they were interested together.”
The trial found that the transactions between Taylor and Martindale “were in the form of a mutual and current account concerning the trade of merchandise between merchant and merchant,” that Art. 5527(3) applied and that the limitations period began to run upon the cessation of dealings between the parties on March 30, 1972.
Martindale points out that Sec. 2.102, U.C.C., provides that “(u)nless the context otherwise requires, this chapter [Sales] applies to transactions in goods * * *,” and that such section together with Sec. 2.106(a) [Definitions] demonstrate that the questions here presented are controlled by the U.C.C.-“A ‘sale’ consists in the passing of title from the seller to the buyer for a price.” It is also pointed out by Martindale that Sec. 2.310(1) provides, “Unless otherwise agreed payment is due at the time and place at which the buyer is to receive the goods even though the place of shipment is the place of delivery.” Martindale further. maintains that Sec. 2.507 and under Sec. 2.725(b) the four year period begins to run from the time of tender of delivery of goods.
Taylor contends that the dealings between Taylor and Martindale comprise a mutual and current account between merchants within Art. 5527(3), that advances
made on the account by Taylor to Martin-dale are part of the account sued on and that payments to the Austin bank and Cal-casieu by Taylor on behalf of Martindale became obligations of Martindale to Taylor.
The issue is thus drawn: Did the statute of limitations begin to run each time there was a transaction between Taylor and Mar-tindale, or did it begin to run on cessation of the dealings between them? There appears to be no argument that the four year statute applies here — whether under Sec. 2.725(b) [a cause of action accrues when the breach occurs, and a breach of warranty occurs when tender of delivery is made] or under Art. 5527(3). We are of the opinion that Art. 5527(3) controls, and we therefore affirm the judgment of the trial court. In our view Art. 5527(3) is not inconsistent with U.C.C., but, instead, supplements it.
While U.C.C. Sec. 10-103 provides that “except as provided in the following section, all acts and parts of acts inconsistent with this Act are hereby repealed,” Art. 5527 was not named as repealed or excepted. Furthermore, apparently the Legislature did not intend for the U.C.C. to repeal Art. 5527 inasmuch as the 60th Legislature enacted the U.C.C. in 1967, and then the 66th Legislature amended Art. 5527 in 1979. This last expression of the Legislature caused Art. 5527 to conform to the U.C.C. in that actions for debts have a four year limitation. However, the additional provision of 5527(3) providing that on mutual and current accounts between merchants the cause of action accrues on cessation of dealings was retained by re-enactment.
Martindale argues not only that Sec. 2.725 applies to the instant fact situation but that custom and usage cannot be used to alter its terms and that limitations began to run at the time and place each shipment of goods was delivered to Martindale; he further complains that a holding contrary to such argument would be in violation of the terms of the sale since the statement of account to Martindale attached to Taylor’s pleading provided “Terms: Net Cash.” We do not agree with Martindale’s argument and complaint.
The trial court found that during the ten year period Martindale sold cotton seed to Taylor during ginning season, that Taylor sold bagging and ties to Martindale, that advance payments were made to Mar-tindale and that payments to others were made by Taylor for Martindale, and that a record of all these transactions was properly kept on Taylor’s books and records. These facts, in our view, constitute “mutual and current accounts concerning the trade of merchandise between merchant and merchant,” and “the cause of action shall be considered as having accrued on a cessation of the dealings ...” The trial court found that Martindale “acquiesced in and accepted without objection the transactions as recorded on the ledgers,” and concluded the parties were merchants.
Martindale further contends that the deferment of the amount owed by him at the end of the ginning season to the next season was a new promise to pay resting in parole and that the two year statute of limitation would apply. We disagree. The trial court found that there were mutual and current accounts between merchants which would not accrue the cause of action until cessation of dealings.
It is further maintained by Martin-dale that the trial court erred in not finding his requested additional findings of fact 1 through 10; that the court erred in holding that Taylor did not charge Martindale a usurious rate of interest on the account; and that there was error in holding that Martindale is not due an offset for usurious interest as a matter of law. These matters are not controlling issues in this case. While a judge may be required to make findings on material issues, it has been held that “he is not ‘required to make findings on evidentiary as distinguished from controlling matters.’
Plaza Co. v. White,
Tex. Civ.App., 160 S.W.2d 312, 313 (writ refused).”
Santos v. Irick,
283 S.W.2d 251, 253, (Tex.Civ.App.-Galveston 1955, no writ.)
Martindale’s first nine requested additional findings of fact are evidentiary matters by which he seeks to support an
offset by his claim of usury. The record reveals that Taylor charged Martindale interest on two occasions — $392 in December, 1965, and $3,957.88 in July, 1969. The witness James F. Stiles, vice president of Taylor, testified that Taylor was “not asking for interest in the amount we are suing for,” and “that amount does not include any interest.” He later said: “We are not suing for interest.” Apparently, the above figures were included in Taylor’s pleading, but it seems without question any claim for interest on the amount sued for was abandoned.
Under Art. 5069-1.03 when no specified rate of interest is agreed upon by the parties, interest at the rate of six per cent per annum shall be allowed on all open accounts from January 1 following the date made. Under the record here Martindale had the burden of establishing that there was no agreement to charge interest on the balance of the account,
Miles v. W. C. Roberts Lumber Co.,
561 S.W.2d 256, 258 (Tex. Civ.App.-Eastland 1978, writ ref’d n.r.e.), and Martindale failed to sustain his burden. The trial court found there was an oral agreement to charge interest at varying rates and that Taylor has waived any claim it has to interest which might be due pursuant to said oral agreement. We believe the trial court’s finding was a reasonable deduction from the evidence in the record. Assuming, arguendo, that an excessive rate of interest was charged Martindale, any cause of action which he may have had as a result of such charge was abated upon his death. Usury statutes are penal in nature and are strictly construed, and penalties for excessive interest charges are restricted to immediate parties to the transaction creating the usury defense. Usury defense is personal to the debtor.
Houston Sash & Door Co. v. Heaner,
577 S.W.2d 217, 222 (Tex.1978). It does not survive the death of the obligor.
Wright v. E-Z Finance Co.,
267 S.W.2d 602, 607 (Tex.Civ.App.-Dallas 1954, writ ref’d n.r.e.).
Martindale contends that Art. 2226 contains no provision for recovery of attorney’s fees for prosecution of a claim on a mutual and current account concerning trade of merchandise between merchant and merchant, nor on special contract. We disagree with this contention. A mutual and current account between merchants is one type of open account, 1 Tex.Jur.3d Accounts and Accounting § 2, p. 123, and a claim based upon an open account may be brought as a sworn account. Art. 2226 provides for the recovery of attorney’s fees in sworn account cases.
Martindale further argues that the award of attorney’s fees by the court under Art. 2226 is penal in nature and therefore does not survive the death of the parties. It was held in
Smith v. Basham,
227 S.W.2d 853, 857 (Tex.Civ.App.-Dallas 1950, aff’d 233 S.W.2d 297 on other grounds) that awarding of attorney’s fee was a penalty, and that such penalty did not survive the death of the wrongdoer. However, since that decision Art. 2226 has been amended three times, the latest in 1979, and the last sentence now reads, “This Act shall be liberally construed to promote its underlying purposes.” The Legislature now says that Art. 2226 will not be strictly construed, but, to the contrary will be liberally construed. We believe that means that recovery for attorney’s fees may be allowed in a case of this nature.
We have carefully examined all of Mar-tindale’s points of error, and we find no merit in them.
Judgment of the trial court is affirmed.