Mourning v. Family Publications Service, Inc., 71-1150.
Citation | 449 F.2d 235 |
Decision Date | 27 September 1971 |
Docket Number | No. 71-1150.,71-1150. |
Parties | Leila MOURNING et al., Plaintiffs-Appellees, v. FAMILY PUBLICATIONS SERVICE, INC., Defendant-Appellant. |
Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
L. Edward McClellan, Larry S. Stewart, Miami, Fla., Robert S. Rifkind, New York City, William S. Frates, Frates, Floyd, Pearson & Stewart, P.A., Miami, Fla., for defendant-appellant; John W. Barnum, Robert D. Joffe, Richard de Saint Phalle, Cravath, Swaine & Moore, New York City, of counsel.
Philip Coller, Miami Beach, Fla., M. Donald Drescher, South Miami, Fla., Leonard Helfand, Legal Service Senior Citizens, Inc., Miami Beach, Fla., for plaintiffs-appellees.
Alan S. Rosenthal, Michael C. Farrar, Attys., L. Patrick Gray, III, Asst. Atty. Gen., Morton Hollander, Atty., Dept. of Justice, Washington, D. C., for amicus curiae.
Before COLEMAN, SIMPSON and RONEY, Circuit Judges.
The validity of Regulation Z,1 promulgated by the Federal Reserve Board under the Truth-In-Lending Act,2 is the material issue in this appeal. The District Court held for validity. We reverse.
Appellant, Family Publications Service, Inc., is a Delaware Corporation engaged in the interstate business of soliciting subscriptions and offering contracts for the sale and delivery of a large number of well known periodicals.
The appellee Leila Mourning, is a seventy-three year old widow having her domicile in Dade County, Florida.
Under appellant's method of conducting its business for the sale and delivery of well known periodicals, the customer under a standard form contract agrees to receive his particular magazine selections for 48 (or 60) months and to pay for them over the first 24 (or 30) months. Under normal operating circumstances, the appellant expects to receive a prepayment for magazines to be delivered to the customer in the future. The only circumstances in which magazines are occasionally delivered prior to appellant's receipt of payment for them is when a customer defaults in making the prepayment. According to the appellant, these transactions, contractual in nature, for the sale and delivery of magazines do not involve the extension of credit as defined by the Truth-In-Lending Act or the imposition of a finance charge, either directly or indirectly, requiring the disclosures specified in the Truth-In-Lending Act.
On August 19, 1969, appellee entered into a written contract with the appellant for the purchase of the Ladies Home Journal, Holiday, Life, and Travel and Camera. As usual, the standard form contract required the appellee to make thirty monthly payments of $3.95 each, in return for which she would receive magazines for sixty months. The contract provided that it was non-cancellable and that failure to make the monthly payments would result in the entire balance becoming due. Said contract is the only instrument executed and existing between the parties and it does not contain a disclosure as to the total purchase price, finance charges, service charges, or the amount to be financed.
Although Leila Mourning, the appellee, received the magazines ordered, she defaulted on her contract and never made any payments beyond the initial $3.95. Consequently, her contract was cancelled by Family Publications Service, Inc., on April 15, 1970. Appellant admits contacting the named appellee on several occasions seeking to enforce the contract. In those letters, appellant explained that it had already entered her subscriptions for the entire period; that it was a financier which had fully invested in her contract and would not receive a refund from the publishers; that Mrs. Mourning would have had to pay in advance had she dealt directly with the publishers; that she had an obligation to repay appellant on her "credit" account, much the same as if she had purchased any other type of merchandise; and that the entire balance of $118.50 was due.
On April 23, 1970, Mrs. Mourning filed her civil suit asserting that the appellant, Family Publications Service, Inc., had failed to make the disclosures required by the Truth-In-Lending Act and, on that basis seeking the civil penalty, including the attorney's fees, prescribed by the Act.
Both Mrs. Mourning and Family Publications, Inc. moved for summary judgment. The judgment went to the plaintiff, in the following language:
"THIS CAUSE having come on before me upon Motions for Summary Judgment filed by the parties, Philip L. Coller, Esq. of the Legal Services Senior Citizens Center, and M. Donald Drescher, Esq., appearing for the Plaintiff, and Peter Fay, Esq. of Frates Fay Floyd & Pearson, P.A., appearing for the Defendant, and the Court having heard argument of counsel and being otherwise fully advised in the premises, makes the following findings of fact and conclusions of law:
FINDINGS OF FACT
CONCLUSIONS OF LAW
We have included the Findings and Conclusions because they reveal the absence of any finding that a finance charge was involved in this transaction. The defendant's answer denied the existence of such a charge, and the plaintiff did not traverse it. The long and the short of it is that the plaintiff and the court stood on the Regulation.
Recognizing that the full disclosure of finance charges would greatly aid consumers in deciding for themselves the reasonableness of the credit charges imposed and would thereby enable consumers to effectively shop for credit, the Truth-In-Lending Act, Title I of the Consumer Credit Protection Act, Public Law 90-321, 82 Stat. 146, was enacted by the Congress,...
To continue reading
Request your trial-
Mourning v. Family Publications Service, Inc 8212 829
...of that class, the challenged regulation does not create a conclusive presumption violative of the Fifth Amendment. Pp. 376—377. 5 Cir., 449 F.2d 235, reversed and Eric Schnapper, New York City, for petitioner. A. Raymond Randolph, Jr., Washington, D.C., for United States, as amicus curiae,......
-
Joyner by Lowry v. Dumpson, 707
...of material fact, the appellate court is empowered to grant either party's motion for summary judgment). Mourning v. Family Publications Service, Inc., 449 F.2d 235, 243 (5th Cir.1971), rev'd on other grounds, 411 U.S. 356, 93 S.Ct. 1652, 36 L.Ed.2d 318 (1973); see also Abrams v. Occidental......
-
Glaire v. La Lanne-Paris Health Spa, Inc.
...of due process and to be a regulation in excess of the Federal Reserve Board's delegated authority. (Mourning v. Family Publications Service, Inc. (5th Cir. 1971) 449 F.2d 235.) Since that time, however, the United States Supreme Court has reversed the circuit court decision in Mourning and......
-
Gerlach v. Allstate Insurance Company
...that its installment premium payment plans are not "consumer credit" transactions. As the Court noted in Mourning v. Family Publications Service, Inc., 5 Cir. (1971), 449 F.2d 235, 240, it is essential to the applicability of Sec. 1640 (a) that there be both a "creditor" and a "consumer cre......