Duty v. General Finance Company
273 S.W.2d 64, 154 Tex. 16, 1954 Tex. LEXIS 526 (1954)
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Rule of Law:
A debtor may recover damages for mental anguish where it is accompanied by physical injury, injury to property, or other elements of actual damages, and such injuries are proximately caused by a creditor's willful and wanton course of harassing collection efforts.
Facts:
- After Mr. and Mrs. Duty missed a payment on their loans, various lenders initiated a campaign of harassment to collect the claimed balances.
- The lenders made daily, lengthy, and harsh-toned telephone calls to the Duties at their home and at their respective places of employment.
- The lenders contacted the Duties' neighbors, employers, and relatives, including via long-distance, collect calls, informing them of the debt and referring to the Duties as 'deadbeats'.
- Lenders sent a barrage of dun cards, telegrams, and special delivery letters, some designed to awaken the Duties late at night.
- As a result of this conduct, both Mr. and Mrs. Duty developed high nervousness, severe headaches, nervous indigestion, and lost sleep.
- The harassment and her resulting decline in health caused Mrs. Duty to be discharged from her job.
- The Duties' credit rating was also destroyed as a result of the lenders' actions.
Procedural Posture:
- Mr. and Mrs. Duty (plaintiffs) filed a petition for damages against various lenders (defendants) in a Texas trial court.
- The trial court held that the petition failed to state a cause of action and dismissed the case.
- The Duties (appellants) appealed to the Texas Court of Civil Appeals.
- The Court of Civil Appeals affirmed the trial court's judgment.
- The Duties (petitioners) then sought review from the Supreme Court of Texas.
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Issue:
Does a debtor have a cause of action for damages against a creditor when the creditor's willful and wanton course of harassing collection efforts causes the debtor to suffer not only mental anguish but also physical injury and loss of employment?
Opinions:
Majority - Mr. Chief Justice Hickman
Yes. A cause of action for damages exists when a creditor's outrageous and willful collection efforts cause a debtor to suffer physical injuries and other actual damages in addition to mental anguish. The court distinguished this case from Harned v. E-Z Finance Company, which held that damages cannot be recovered for mental anguish alone. Here, the Duties alleged not only mental distress but also consequent physical injuries (headaches, indigestion, nervousness), loss of employment, and damage to their reputation (slander). These additional elements of tangible harm are sufficient to state a valid claim for relief. The court reasoned that while reasonable collection efforts are permissible, the alleged conduct—resorting to cruel and cunning devices intended to cause great mental anguish that results in physical injury and job loss—exceeds the bounds of legality and renders the creditor liable for damages.
Analysis:
This decision significantly clarifies the tort of intentional infliction of emotional distress in the context of debt collection in Texas. It establishes that while mental anguish alone is not a compensable injury, it becomes recoverable when accompanied by a resulting physical manifestation or other independent, legally recognized harm like job loss or defamation. This case effectively sets a boundary for creditors, distinguishing permissible, albeit persistent, collection efforts from an actionable campaign of outrageous harassment. The ruling provides a pathway for debtors to seek redress for extreme collection tactics, provided they can plead and prove tangible harm beyond mere emotional upset.
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