DANNY D. PITZER, AS RECEIVER FOR, Aztec Realty Corporation, Appellant v. VIBRA WHIRL & COMPANY, INC., Appellee

Affirmed and Opinion filed October 17, 1989
 
 
 
S
In The
Court of Appeals
Fifth District of Texas at Dallas
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No. 05-89-00243-CV
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DANNY D. PITZER, AS RECEIVER FOR,
Aztec Realty Corporation, Appellant
V.
VIBRA WHIRL & COMPANY, INC., Appellee
 
.................................................................
On Appeal from the 191st District Court
Dallas County, Texas
Trial Court Cause No. 89-8-J
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O P I N I O N
Before Chief Justice Enoch and Justices Carver FN:1 and Bissett FN:2
Opinion Per Curiam
        Danny D. Pitzer appeals the trial court's granting of a motion for summary judgment in favor of appellee, Vibra Whirl. In two points of error, Pitzer contends that 1) the trial court erred in granting Vibra Whirl's motion for summary judgment because the promissory note executed and made payable to Vibra Whirl was usurious as a matter of law, and 2) because the note is usurious on its face, the trial court erred in failing to grant Pitzer's motion for summary judgment. FN:3 For the reasons given below, we affirm the judgment of the trial court.
FACTS
        An action for a receivership was commenced against Aztec Realty Corporation. Danny Pitzer was appointed receiver. Thereafter, Vibra Whirl and Company, Inc., intervened and sought the right to foreclose on property owned by Aztec. Aztec had executed two promissory notes made payable to Vibra Whirl in the amounts of $266,000 and $50,000. Both notes were secured by a deed of trust upon real property. Pitzer filed a cross-action alleging that the $266,000 note was usurious on its face and requested damages in addition to declaring the note null and void. Vibra Whirl filed a motion for summary judgment claiming that the note was not usurious and requesting foreclosure under the deed of trust. The trial court granted Vibra Whirl's motion and authorized foreclosure. A severance was granted as to this cause of action, making it a final judgment. Pitzer appeals.
USURY
        Pitzer contends that the trial court erred in not finding that Vibra Whirl contracted for usurious interest on the promissory note because the note and the deed of trust contain acceleration clauses which allow Vibra Whirl to mature and declare immediately due and payable all of the unearned interest. The note's acceleration clause reads as follows:
        Failure to pay any installment of principal or interest hereon when due, shall, at the option of the holder hereof, immediately mature this note and the indebtedness evidenced hereby as fully as if the entire time provided herein had expired; . . . . [Emphasis added.]
However, the printed payment provision of the note reads:
        [I]nterest payable on the unpaid balance monthly as it accrues; all past due principal and interest to bear interest at the maximum rate allowed by law. [Emphasis added.]
The typewritten payment provision provides:
        This note shall be payable in monthly installments of $3,000.00, the first of such installments being due and payable on the 14th day of September, 1987 and a like installment being due and payable on the 14th day of each succeeding month thereafter until August 14, 1993, when the entire balance of both principal and interest is due and payable; said installments, as paid, to be applied to the payment of interest accrued on the unpaid portion of the principal, and second, the remainder to be applied to the payment of principal. [Emphasis added.]
The Deed of Trust contains two acceleration clauses. The clause on page one reads:
        Failure to pay the note herein secured or any installment thereon when due, shall at the option of the beneficiary or of either holder of said notes mature both of said notes and they shall at once become due and payable . . . . [Emphasis added.]
However, the acceleration clause on page two of the Deed of Trust provides:
        But should the said parties of the first part make default in the punctual payment of said indebtedness, or any part thereof, principal or interest, as the same shall become due and payable, or should said parties of the first part in any respect fail to keep and perform any one or more of the conditions herein provided to be kept and performed by said parties of the first part, then, in any such case, the whole amount of said indebtedness remaining shall, at the option of the holder of said indebtedness, immediately mature and become payable . . . . [Emphasis added.]
        In analyzing whether an acceleration provision in a note is usurious, we must look at the entire contract including the provisions in the note and deed of trust. Walker v. Temple Trust Co., 124 Tex. 575, 80 S.W.2d 935, 937 (1935). When the presence of usury is sought to be established by an isolated provision of a contract, the true meaning of the provision must be arrived at by interpreting its language in harmony with the dominant intent evidenced by the contract as a whole. Walker v. Temple Trust Co., 80 S.W.2d at 936; see also Ballin v. Poston Home Care Center Co., 749 S.W.2d 164, 167 (Tex. App.--San Antonio 1988, writ denied); Missouri-Kansas-Texas R. Co. v. Fiberglass Insulators, 707 S.W.2d 943, 950 (Tex. App.--Houston [1st Dist.] 1986, writ ref'd n.r.e.). The general rule in Texas is that courts will presume parties intended to enter into a non-usurious contract. Smart v. Tower Land & Investment Co., 597 S.W.2d 333, 341 (Tex. 1980).
        Pitzer argues that certain of the provisions in the note and deed of trust call for acceleration of unearned interest at a rate in excess of that allowed by law. In particular Pitzer focuses on the acceleration language in the note and the language in the acceleration clause on page one of the deed of trust. This language, taken by itself, calls for an immediate maturation of the note plus acceleration of the "indebtedness evidenced hereby as fully as if the entire time provided herein had expired." The language in the Deed of Trust calling for maturation of the "note" and the portion of the promissory note calling for maturation of the "note" taken by itself would call for a usurious construction. Belzung v. Capital Bank, 598 S.W.2d 14, 15 (Tex. Civ. App. - Dallas 1980, writ ref'd n.r.e.), citing Clements v. Williams, 136 Tex. 97, 98, 147 S.W.2d 769, 769 (1941). However, when we look to the rest of the language of the note and the Deed of Trust, we find that there is clearly no intent to collect or charge a usurious amount of interest.
        The Texas courts have consistently held that acceleration of "indebtedness" is not usurious. See Clements v. Williams, 147 S.W.2d at 769 (maturity of debt indicates unearned interest not collectable); Marble Savings Bank v. Davis, 124 Tex. 560, 563, 80 S.W.2d 298, 299 (1935) ("whole of the indebtedness" does not render contract usurious); Walker v. Temple Trust Co., 124 Tex. 575, 80 S.W.2d 935, 937 (1935) (unearned interest is no part of an indebtedness); Southland Life Ins. Co. v. Egan, 126 Tex. 160, 165-166, 86 S.W.2d 722, 724 (1934) ("whole of this indebtedness" does not authorize collection of unearned interest). Here the acceleration clauses speak of maturing the note and the "indebtedness evidenced hereby." When the contract by its terms, construed as a whole, is susceptible of more than one reasonable construction, the court will adopt the construction which comports with legality. Smart v. Tower Land & Investment Co., 597 S.W.2d at 340-341; see also Jim Walters Homes v. Schuenemann, 668 S.W.2d 324, 331 (Tex. 1984). When we look to the emphasized portion of the printed and typewritten payment clauses in the promissory note and the second page acceleration clause in the Deed of Trust, it is clear that no excessive rate of interest is sought or charged. Indeed the payment clause of the note contemplates only payment of accrued interest. The maturing of the note in the acceleration clauses is modified by the phrase "indebtedness," a term which does not include unaccrued interest. Walker v. Temple, 80 S.W.2d at 937.
        The case of Belzung v. Capital Bank, 598 S.W.2d 14 (Tex. Civ. App.--Dallas 1980, writ ref'd n.r.e.) involved a note with acceleration clauses very similar to the ones in the case at bar. The first clause called for the acceleration of the "whole of this note." This clause was held to be usurious. Belzung v. Capital Bank, S.W.2d at 15. The second acceleration clause declared only the "indebtedness" due. The wording of this second clause was held to not be usurious. Belzung v. Capital Bank, S.W.2d at 15. The note was thus subject to two reasonable constructions, one which rendered it legal as well as one which rendered it illegal. This court, in Belzung, adopted the legal construction and concluded the note was non-usurious. The holding in Belzung was expressly approved by the Texas Supreme Court in Jim Walker Homes, Inc. v. Schuenemann, 668 S.W.2d at 331.
        The acceleration clauses in the note and deed of trust in this case present a similar situation. The promissory note allows for acceleration of the "note" and the "indebtedness" evidence hereby. The Deed of Trust has one clause calling for acceleration of the "note" and another clause calling only for the acceleration of indebtedness. Given that the note and deed of trust are susceptible of two reasonable interpretations, this court is bound to accept the one that comports with legality. Further, the payment portion of the note expressly contemplates only the payment of accrued interest. The uncontradicted summary judgment evidence establishes that the note and deed of trust were not intended to collect interest at a usurious rate.
        Since we find as a matter of law that the note and deed of trust do not exact an illegal rate of interest both of Pitzer's points of error are overruled.         The judgment of the trial court is AFFIRMED.
 
 
                                                          PER CURIAM
 
 
Do Not Publish
Tex. R. App. P. 90
 
890243.U05
 
FN:1 The Honorable Spencer Carver, Justice, retired, Court of Appeals, Fifth District of Texas at Dallas, sitting by assignment.
FN:2 The Honorable Gerald T. Bissett, Justice, retired, Court of Appeals, Thirteenth District of Texas at Corpus Christi, sitting by assignment.
FN:3 Appellant, for the first time on appeal, in the argument in his brief argues that certain demand letters by Vibra Whirl sought to collect a usurious rate of interest. Since this matter was not assigned as a point of error, it is not presented for review.
File Date[10-17-89]
File Name[890243]