Texas Attorney General Opinion: V-804 Page: 3 of 11
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Hon. Keith Kelly - Page 3 (V-804)
cost of the transaction to the borrower
exceed the maximum legal interest."
That Texas is in accord with this general
rule, at least as respects sums paid for bone fide
services of third parties, is t9o well settled to
need discussion of authorities. It is equally clear,
however, that the courts of Texas will look to the
substance of such transactions, rather than the form,
and will label usurious 'any attempt to create a sub-
terfuge to coceal interest under the guise of legiti-
mate charges. The rule in usury cases is that the
question of whether a given contract was undertaken
and discharged in good faith or was undertaken with
intent to collect usurious interest is a fact question
for jury determination, and the courts will naturally
uphold fact findings f usury if there is evidence to
support that finding.
The Texas courts, on the other hand, have
not made a square holding on the legality of addition-
al charges by the lender himself, rather than by a
third party. They have neither squarely held such
charges to be "interest," nor have they squarely held
such charges are not interest. Assuming, however,
that actual services are rendered to the borrower by
the lender, there is ample reason to feel the courts
6. 21 AL,.R. 819,
7. Slaughter Co. v. Eller, 196 S.W. 704, (Tex. Civ.
App. 1917 ertor ref.;Nevels v. Harris, 129 Tex.
190, 102 S.W.2d 1046 (1937. );Wo dridre v. State,
183 S.W.2d 746 (Tet. Civ. App. 1944, error ref.;
8. Slaughter Co. v. Eller, 196 S.W. 704 (Tex. Civ.
App. 1917, error ref.);Hudmon v. Foster, 210 S.W.
262, reversed on other grounds, 231 S.W. 346 (Tex.
Comm. App. 1921); Glover v. Buckman; 104 S.W.2d 66,
(Tex. Civ. App. 19537, error dsm.);Baltimore
Trust Co. v. Sanders, 105 S.W. 2d 710 (Tex. Civ.
App. 1937, error dism.); Donoghue v. State, 211
S.W.2d 623, (Tex. Civ. App. 1948, error ref.
9. Orr v. McDaniel, 5 S.W.2d 175, (Tex. Civ. App.
1928); Starks v; National Bond & Mort. Corp. 85
S.W.2d 2056 (Tex, Civ. App. 1935, error dism.);Na-
tional Bond & Mort. Corp, v' Mabaney, 70 S.W.2d
236; modified on other grounds, 124 Tex. 544; 80
S.W. 2d 947 (1935);Trinity Fire Ins. Co. v. Kerr-
ville Hotel Co., 129 Tex. 310, 103 S.W.2d 129
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Texas. Attorney-General's Office. Texas Attorney General Opinion: V-804, text, 1949; (texashistory.unt.edu/ark:/67531/metapth265623/m1/3/: accessed December 13, 2018), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; crediting UNT Libraries Government Documents Department.