General Securities Co. v. Jumonville

• Decision Date: 09 January 1950
• Docket Number: No. 39039,39039
• Citation: 216 La. 681,44 So.2d 702
• Parties: GENERAL SECURITIES CO., Inc., v. JUMONVILLE.
• Court: Louisiana Supreme Court

Page 702

44 So.2d 702

216 La. 681

GENERAL SECURITIES CO., Inc., v. JUMONVILLE.

No. 39039.

Supreme Court of Louisiana.

Jan. 9, 1950.

Rehearing Denied Feb. 13, 1950.

L. C. Parker, Baton Rouge, for defendant-appellant.

Sargent Pitcher, Jr., Baton Rouge, for plaintiff-appellee.

FOURNET, Chief Justice.

The plaintiff, General Securities Co., Inc., upon the refusal of the defendant, J. E. Jumonville, to pay the eighth installment due on his note dated January 13, 1947, in the principal sum of $7,022.40, under the acceleration clause of the note instituted proceedings to recover the balance due--$2,926.28, plus interest and attorney's fees; and under a writ of sequestration seized the caterpillar diesel tractor and equipment on which it held a chattel mortgage to secure payment of the note. The defendant filed a motion to dissolve and set aside the sequestration on the ground that the plaintiff was proceeding on a usurious contract. He also filed exceptions of no cause or right of action. In his answer, contending that the transaction is an illegal one, being in direct violation of law and particularly of Act No. 94 of 1942 in that his note was discounted at a higher rate of interest than is permitted by the statute, defendant claimed that he was entitled to recover in reconvention the amount already paid the plaintiff, namely, $4,096.12, and prayed accordingly.

The trial judge, having referred the motion to dissolve the writ of sequestration and the exceptions to the merits, rendered judgment in favor of plaintiff as prayed for. Defendant has appealed.

On January 13, 1947, defendant executed a note for $7,022.40, payable to order of bearer in installments of $585.16 per month and a final installment of $585.70, conditioned to bear interest at 8% per annum from maturity and providing that failure to pay any installment would mature all remaining installments; and for 20% attorney's fees. The note was paraphed for identification with an act of chattel mortgage covering a caterpillar diesel tractor and equipment. The plaintiff acquired the note from the defendant at a discount of $772.40, or 11% of its face value, paying the defendant only $6,250.00. Monthly payments were made until September, 1947, at which time defendant declined to pay further, and this suit followed.

Defendant's argument that the Small Loan Law is controlling, since the plaintiff is operating as a 'licensee' under that law, is without merit. As pointed out by the trial judge in his well considered opinion, Act No. 94 of 1942, commonly known as the Louisiana Small Loan Law, is clearly without application; for, as indicated by its title, the object of the act is 'To provide for the licensing and regulation of the business of making loans in sums of Three Hundred Dollars ($300.00) or less, secured or unsecured, at a greater rate of interest than eight per centum per annum; * * *,' and a perusal of its provisions readily discloses that it is not opposite under the facts of this case.

The law governing usurious contracts is to be found in the Revised Civil Code, Chapter 3 of Title XII, 'Of Loan,' under the heading ...