Dailey v. A. C. Nelsen Co., 35934
| Court | Supreme Court of Nebraska |
| Citation | 178 Neb. 881,136 N.W.2d 186 |
| Docket Number | No. 35934,35934 |
| Parties | James DAILEY and Helen Dalley, Appellants, v. A. C. NELSEN COMPANY, a Nebraska Corporation, Appellee. |
| Decision Date | 02 July 1965 |
Page 186
v.
A. C. NELSEN COMPANY, a Nebraska Corporation, Appellee.
Syllabus by the Court
1. By the enactment of L.B. 17, Seventy-fourth (Extraordinary) Session, the Legislature intended that usurious contracts or indebtedness should be collectible to the extent of the principal, but that any usurious interest or other charges should be forfeited to the borrower.
2. The provisions of L.B. 17 extend the borrower's[178 Neb. 882] right to recover usurious interest and charges even though the entire contract or loan has been fully paid.
3. Where an installment contract or loan is usurious and where installment payments are not specifically allocated to principal or interest in the contract or by agreement, installment payments will be credited as payments on principal or so much thereof as remains unpaid and not on any illegal interest or other charges on the loan involved.
4. The right to recover illegal interest or other charges granted to the borrower by L.B. 17 of the Seventy-fourth (Extraordinary) Session of the Legislature may not be exercised as long as any part of the principal debt justly due remains unpaid.
Barney, Carter & Buchholz, Herbert M. Brugh, Lincoln, for appellants.
Page 187
Luebs, Elson, Tracy & Huebner, Grand Island, Edward Shafton, Omaha, for appellee.
Heard before WHITE, C. J., BOSLAUGH, BROWER, SMITH, and McCOWN, JJ., and WESTERMARK, District Judge.
McCOWN, Justice.
This action was originally filed September 6, 1963, to void a conditional sales contract and other documents executed under the 1959 Nebraska Installment Sales Act; to obtain a certificate of title to the mobile home involved; and to recover all payments made under the contract.
Thereafter, L.B. 17 of the Seventy-fourth (Extraordinary) Session of the Legislature was passed, effective November 15, 1963, which applied retroactively to transactions prior to its effective date. On June 1, 1964, an amended petition was filed asking a declaratory judgment determining the respective rights and liabilities of the parties. The district court, after hearing and trial, entered its order dismissing the plaintiffs' amended petition, and plaintiffs have appealed.
[178 Neb. 883] The basic issue in this case involves the application and effect of L.B. 17 which, as to matters relevant here, amended sections 45-138, 45-154, and 45-155, R.R.S.1943.
Section 45-138, R.R.S.1943, as to its relevant amended provisions reads: 'Any contract of loan made in violation of this section, either knowingly or without the exercise of due care to prevent the same, shall not on that account be void, but the licensee shall have no right to collect or receive any interest or charges on such loan. If any interest or other charges have been collected, the licensee shall forfeit and refund to the borrower all interest and other charges collected on the loan involved.'
Section 45-154, R.R.S.1943, as amended reads: 'Any contract of loan, in the making or collection of which any act is done which constitutes a misdemeanor under section 45-153, shall not on that account be void, but the lender shall have no right to collect or receive any interest or charges whatsoever. If any interest or other charges have been collected, the lender shall forfeit and refund to the borrower all interest and other charges collected on the loan involved.'
Section 45-155, R.R.S.1943, as amended reads: 'Violation of sections 45-114 to 45-155 in connection with any indebtedness, however acquired, shall not render such indebtedness void and uncollectible. If however, any interest or other charges have been collected on such indebtedness, all interest and other charge shall be forfeited and refunded.'
L.B. 17 has been sustained by this court as constitutional. Davis v. General Motors Acceptance Corporation, 176 Neb. 865, 127 N.W.2d 907.
This court previously held that a contract in compliance with the 1959 Nebraska Installment Sales Act was not a bona fide...
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Carper v. Kanawha Banking & Trust Co., 13074
...743 (1963); Wood v. Commonwealth Trailer Sales, Inc., 172 Neb. 494, 110 N.W.2d 87, ovrld. on other grounds Dailey v. A. C. Nelsen Co., 178 Neb. 881, 136 N.W.2d 186 (1961). Second, where the financing transaction is tripartite, the jury may examine the closeness of the relationship between t......
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