Lancia v. Grossman's of R. I., Inc.

• Decision Date: 01 February 1966
• Docket Number: No. 10824,10824
• Citation: 100 R.I. 407,216 A.2d 517
• Parties: Anthony J. LANCIA et al. v. GROSSMAN'S OF RHODE ISLAND, INC. Ex.
• Court: Rhode Island Supreme Court

Page 517

216 A.2d 517

100 R.I. 407

Anthony J. LANCIA et al. v. GROSSMAN'S OF RHODE ISLAND, INC.

Ex. No. 10824.

Supreme Court of Rhode Island.

Feb. 1, 1966.

Factor, Chernick & Hillman, William C. Hillman, Pawtucket, for plaintiffs.

Adler, Pollock & Sheehan, Bernard R. Pollock, Peter Lawson Kennedy, Providence, for defendant.

POWERS, Justice.

This is an action of the case for usury commenced pursuant to the provisions of G.L.1956, § 6-26-4. It was tried before a superior court justice, sitting without a jury, and resulted in a decision for the defendant. The case is before us on the plaintiffs' exceptions to the overruling of their demurrer to the defendant's special plea and to the decision on the merits.

The facts on which this action is predicated are set forth in an agreed statement, which reads in part as follows:

'1. Plaintiffs were indebted to Defendant for goods sold and delivered in the sum of $611.32. Plaintiff's debt to Defendant was overdue for a considerable time prior to April 5, 1961. Defendant had threatened to attach Plaintiffs' property to enforce collection of said debt.

'2. On April 5, 1961, Plaintiffs executed a note and mortgage to induce Defendant to forebear from commencing legal action against Plaintiffs for recovery of said debt.

'3. The note executed by Plaintiffs included interest computed at the rate of six (6%) per cent per annum for the term of the note, on the indebtedness of $611.32. The term of said note was thirty-six (36) months. Pursuant to the terms of said note, Plaintiffs agreed to pay a total of $721.36 and to make thirty-five successive monthly payments of $20.00 each commencing May 5, 1961, and a final payment of $21.36.

'4. Plaintiffs defaulted said note on or about the 5th day of May, 1961, in that they did not make the first monthly payment as called for in said note. Plaintiffs made the following payments:----

                September 30, 1961  $20.00
                March 31, 1962       40.00
                June 30, 1962        20.00
                                    ------
                Total               $80.00
                

'5. Foreclosure was commenced against the mortgaged real estate of Plaintiffs on or about August 21, 1962, approximately fifteen and one half (15 1/2) months after default. The foreclosure sale was to be held September 12, 1962.

'6. On September 11, 1962, the sum of $885.86 was paid to Defendant by Plaintiffs. This amount was the full amount claimed by defendant to be due. The foreclosure sale scheduled for September 12, 1962, the following day, was therefore cancelled.

'7. Of the sum of $885.86, Defendant accounted to Plaintiffs as follows:

                Balance due on the
                aforesaid note          $641.36
                Auctioneer's fee          50.00
                Providence Journal
                advertisement mortgage
                foreclosure               44.16
                Attorney's fees          150.34
                                        --------
                Total                   $885.86"
                

After plaintiffs discharged their obligation as aforesaid, they commenced suit by writ dated November 21, 1962 and in their declaration, after reciting the relevant facts, alleged that the payment exacted by defendant was usurious in that it exceeded the maximum charge or compensation for interest and services or expenses incidental to the making, negotiation or collection of such indebtedness permitted by G.L.1956, § 6-26-2. That section provides:

'No person, partnership or corporation, hereafter loaning money to or negotiating the loan of money for another, except duly licensed pawnbrokers and persons licensed under the provisions of chapter 25 of title 19, shall, directly or indirectly, reserve, charge or take interest on such loan, whether before or after maturity, at such a rate, or reserve, charge or take compensation for services or expenses incidental to the making, negotiation or collection of such loan, in such an amount, that the total of one year's interest, reckoned at the rate so reserved, charged or taken, and of all such compensation for services and expenses, shall exceed thirty per cent (30%) of the amount actually received by the borrower, on all amounts exceeding fifty dollars ($50.00), whether in one or more loans, and on all amounts not exceeding fifty dollars ($50.00), five per cent (5%) per month, for the first six (6) months, and thereafter two and one-half per cent (2 1/2%) per month of the amount actually received by the borrower.'

The defendant pleaded generally and specially, traversing the allegations in plaintiffs' declaration and concluded as follows:

'The charges additional to the aforesaid sum of Six Hundred Forty-One And 36/100 ($641.36) Dollars paid by the plaintiffs to the defendant as unpaid principal and interest, were not charges or compensation for interest and services or expenses incidental to the making, negotiation or collection of such indebtedness, but were incidental to a separate and distinct transaction, being the default of the plaintiffs on the note and foreclosure of the mortgage.'

The plaintiffs' demurrer to defendant's special plea was overruled and they then prosecuted their bill of exceptions to this court. See Lancia v. Grossman's of Rhode Island, Inc., R.I., 207 A.2d 607, wherein we held...