General Motors Acceptance Corp. v. Mackrill
| Decision Date | 16 July 1963 |
| Docket Number | No. 35438,35438 |
| Parties | GENERAL MOTORS ACCEPTANCE CORPORATION, a corporation, Appellee, v. Donald E. MACKRILL, Appellant. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. In considering whether a transaction is a time sale made in good faith or a loan, the court will look through the form and examine its substance.
2. An essential of a valid time sale price is a price agreed upon between the parties where the buyer is actually informed of and has at the time the sale is made an opportunity to choose between a cash and a time sale price.
3. Regardless of the term used, if the result is a charge for the loan of money or for forbearance of a debt the result is interest.
4. Disguise it by any name we will, it is and remains interest. We are concerned not with the form but the intent of the transaction.
5. The permissive provisions of the Installment Loan Act will not apply to a nonlicensee, but a nonlicensee will be bound by the inhibitory provisions of the act.
6. The fact that a purchaser has full knowledge of and accepts the terms of a proffered sale is not a defense to a charge of usury.
7. The lender is the violator of the law and against him alone are its penalties enacted.
8. The contract herein is in violation of the Installment Loan Act and is void and uncollectible.
Bertrand V. Tibbels, Scottsbluff, for appellant.
Wright, Simmons & Hancock, Scottsbluff, for appellee.
Heard before WHITE, C. J., and CARTER, MESSMORE, YEAGER, SPENCER, BOSLAUGH and BROWER, JJ.
This is a replevin action in which General Motors Acceptance Corporation, hereinafter referred to as plaintiff, alleges it has a special interest in a 1960 Chevrolet sedan pickup Biscayne by reason of being the assignee of a conditional sale contract entered into between Kizzier Chevrolet Company, a corporation, hereinafter referred to as Kizzier, and Donald E. Mackrill, hereinafter referred to as defendant. Defendant appeals from the overruling of a motion for a new trial after a judgment for the plaintiff for possession and costs.
On December 9, 1961, defendant purchased the car in question from Kizzier and signed what is designated as a conditional sale contract, obligating himself to pay a balance of $1,573.76. The financial part of the transaction is described in the conditional sale contract as follows: 'Undersigned seller hereby sells, and undersigned buyer or buyers, jointly and severally hereby purchase (s), subject to the terms and conditions set forth below and upon the reverse side hereof, the following property, delivery and acceptance of which in good order are hereby acknowledged by buyer, viz.:
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New or Year No. Make Body Type If Model Manufacturer's Motor
Used Model Cyl. Trade Truck, Give Number Serial No. No
Name Tonnage or
Series
-------------------------------------------------------------------------------
used 1960 8 Chevrol- sedan pickup Biscayne 012 80S 134 161 none
et
For a TOTAL TIME SALE PRICE computed as follows
1. *CASH SALE PRICE (Including the itemized costs $1895.00(1)
designated below)
2. TOTAL DOWN PAYMENT under instalment sale----
Consisting of $645.00 (Net Trade-in) plus $ none $645.00(2)
(Cash)
DESCRIPTION OF TRADE-IN Make
Chevrolet
Model Bel
Air
Year 1956
3. DIFFERENCE BETWEEN ITEMS 1 AND 2 $1250.00(3)
4a. COST OF REQUIRED CAR INSURANCE. (Include this $80.00(4a)
item, if buyer has authorized seller to apply for
the insurance)
4b. COST OF CREDITOR INSURANCE ON LIFE OF BUYER $9.60(4b)
(Exclude this item if buyer does not authorize such
insurance)
4c. _________________________________________________ $ none (4c)
5. BASIC TIME PRICE (PRINCIPAL BALANCE) (Add items 3, $1339.60(5)
4a, 4b and 4c)
6. TIME PRICE DIFFERENTIAL $234.16(6)
7. TIME PRICE BALANCE (Add items 5 and 6) $1573.76(7)
8. TOTAL TIME SALE PRICE (Add items 2 and 7) $2218.76(8)
The Time Price Balance is payable at the seller's office designated below or at such office of any assignee as may be hereafter designated in 24 instalments of .....$ as listed each, commencing Jan. 10, 1962, and on the same day of each successive month thereafter, or as indicated in space below. The final instalment shall equal the amount of time price balance remaining due. 1 200.00 on Jan. 10, 1962 and 23 59.72.'
Defendant was allowed $845 for his old car, received $200 of the amount in cash, and was given credit for $645. There is a dispute between the parties as to whether this $200 was a loan or was advanced by Kizzier on the old car for the purpose of paying off an encumbrance of some type on the car. For the purpose of a decision herein, that point is immaterial and will not be discussed.
Subsequent to December 9, 1961, the salesman for Kizzier advised defendant that he had used a wrong rate for computing the insurance premiums in the contract and that the contract would have to be changed to include an additional $9. On January 13, 1962, defendant signed a new contract which is the contract involved in this action. The contracts are on the same form and are exactly the same except for the changes in the amounts inserted in the contracts. The itemization of the description of the transaction in the January 13, 1962, contract is as follows:
'For a TOTAL TIME SALE PRICE computed as follows
1. *CASH SALE PRICE (Including the itemized costs $1895.00(1)
designated below)
2. TOTAL DOWN PAYMENT under instalment sale----
Consisting of $645.00 (Net Trade-In) plus $ none $645.00(2)
(Cash)
DESCRIPTION OF TRADE-IN Make
Chevrolet
Model Bel
Air
Year 1956
3. DIFFERENCE BETWEEN ITEMS 1 AND 2 $1250.00(3)
4a. COST OF REQUIRED CAR INSURANCE (Include this $89.00(4a)
item, if buyer has authorized seller to apply for
the insurance)
4b. COST OF CREDITOR INSURANCE ON LIFE OF BUYER $10.47(4b)
(Exclude this item if buyer does not authorize such
insurance)
4c. _________________________________________________ $ none (4c)
5. BASIC TIME PRICE (PRINCIPAL BALANCE) (Add items 3, $1349.47(5)
4a, 4b and 4c)
6. TIME PRICE DIFFERENTIAL $231.22(6)
7. TIME PRICE BALANCE (Add items 5 and 6) $1580.69(7)
8. TOTAL TIME SALE PRICE (Add items 2 and 7) $2225.69(8)
The Time Price Balance is payable at the seller's office designated below or at such office of any assignee as may be hereafter designated in 24 instalments of .....$ as listed each, commencing Jan. 10 1962, and on the same day of each successive month thereafter, or as indicated in space below. The final instalment shall equal the amount of time price balance remaining due. 1 200.00 on Jan 10, 1962; and 23 60.03.'
Defendant sets out eight assignments of error. The pertinent ones may be summed up in the contention that the transaction evidences an installment loan at usurious rates. It is the plaintiff's contention that the transaction is a time price sale and not a loan transaction. Plaintiff contends further that, in any event, there is no time price differential which is in violation of the Installment Sales Act or the Installment Loan Act construed with the laws regulating the amount of interest which may be charged by a private person.
In Elder v. Doerr, Neb., 122 N.W.2d 528, we held the Nebraska Installment Sales Act to be...
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