Graham & Locke Investments, Inc. v. Madison

On Motion for Rehearing.

Article 5071, V.A.C.S., declares in part that written contracts providing for usurious interest “shall be void and of no effect for the amount or value of the interest only; but the principal sum of money or value of the contract may be received and recovered.” The meaning and effect of this proviso of the statute is stated in 42 Tex.Jur., Usury, sec. 45, p. 939: “In other words, in respect of written contracts there is now a forfeiture of both the legal and illegal interest. The contract is thus left as though it did not provide for interest, but it is not vitiated…