O.H. May Co. v. Anderson

• Decision Date: 03 December 1927
• Parties: O. H. MAY CO. v. ANDERSON.
• Court: Tennessee Supreme Court

300 S.W. 12

156 Tenn. 216

O. H. MAY CO. v. ANDERSON.

Supreme Court of Tennessee.

December 3, 1927

Certiorari to Court of Appeals.

Suit by the O. H. May Company against S. M. Anderson. Judgment of dismissal in the circuit court was affirmed by the Court of Appeals, and plaintiff brings certiorari. Reversed and rendered.

Hobart Atkins, Child & Ailor, and Bern Henry, all of Knoxville, for plaintiff in error.

N. Fred McMillan, of Knoxville, for defendant in error.

COOK J.

O. H. May Company, operating under the small loan law (chapter 62 Acts of 1917), made two loans to S. M. Anderson, the first December 4, 1923, for $75, and the second February 6, 1924 for $75. The notes bearing interest at 6 per cent. per annum each payable 30 days from date, and each secured by chattel mortgage, were executed. Anderson agreed to pay in addition to interest at 6 per cent. per annum the fee of 2 per cent. upon the original loan and 2 per cent. upon each renewal for investigating the security and closing the loan as provided in section 9 of the act. He renewed the notes each 30 days and paid the interest and fees until August 15, 1925, when he failed or refused to renew or pay.

October 24, 1925, the plaintiff sued for the balance due on the two loans of $152.22, and for the 10 per cent. attorney's fees provided for in the notes. Judgment was rendered by the justice of the peace, and upon appeal to the circuit court the suit was dismissed upon the ground that the principal was forfeited by the plaintiff because of excessive charges. The Court of Appeals affirmed the judgment and the cause is here upon certiorari.

The Court of Appeals found that, through the period of the loan, May Company charged 29 cents a month, or a total of $7.74 in excess of the interest and fees authorized by section 9, and declared a forfeiture to the borrower under section 14 of the act (chapter 62, Acts of 1917). O. H. May, manager of the company, testified that when suit was brought the overcharge was discovered and Anderson given credit for it.

Section 10 of the act of 1917 provides:

"Be it further enacted, that any interest charged by the lender to the borrower in excess of 6 per cent. per annum or any fee, fine or charge whatsoever charged by the lender against the borrower whether for negotiating a loan or for commissions, examinations, attorney's fees, or any other bonus or additional charge whatsoever to those allowed in section 9 of this act shall be considered as a payment on the principal of such loan and the said loan shall be credited with the amount of such additional charge or excess."

The Court of Appeals held that this provision was rendered nugatory by a subsequent provision (section 14), which is as follows:

"Be it further enacted, that if any licensee, licensed under this act shall violate any of the provisions of sections 6, 7, 8, and 9 of this act or shall charge for the making of any loan any rate of interest in excess of six per cent. (6%) per annum, or any fee or bonus in excess of those provided in this act said licensee shall forfeit to the borrower in each and every such case, the principal sum loaned and all fees and interest charged and collected and the license under which said business is conducted shall become ipso facto void."

It is a rule of construction that, when irreconcilable conflict appears in a statute, the last provision controls (Board of Commissioners v. Nashville, 134 Tenn. 631, 185 S.W. 694); but the object of rules of construction is to discover the legislative intention and inconsistent or repugnant provisions are to be reconciled. The power of punishment rests in the legislative, not the judicial, department, and arbitrary rules of construction ought never lead to a result contrary to an intention to be reasonably drawn from the words and context of the act, with the result of imposing a penalty and working a forfeiture not intended by the Legislature.

When rules of statutory construction are invoked as aids, all of them should be considered, and first that which looks to the intention of the lawmakers. Out of this rule arises another which holds that, when a literal construction of a section will render it repugnant to the provisions of a subsequent section, they shall be considered, if possible, so as to let both be operative and give effect to every part of the statute. Wilcox v. State, 3 Heisk. 110; Levy v. Davis, 125 Tenn. 348, 142 S.W. 1118.

The apparent object sought to be accomplished by section 14 was to enforce the...