Liuzza Credit Service, Inc. v. Taliancich

• Decision Date: 06 January 1969
• Docket Number: No. 3272,3272
• Citation: 217 So.2d 509
• Parties: LIUZZA CREDIT SERVICE, INC. v. Peter A. TALIANCICH.
• Court: Court of Appeal of Louisiana — District of US

Page 509

217 So.2d 509

LIUZZA CREDIT SERVICE, INC. v. Peter A. TALIANCICH.

No. 3272.

Court of Appeal of Louisiana, Fourth Circuit.

Jan. 6, 1969.

Wilson F. Shoughrue, Jr., New Orleans, for plaintiff-appellant.

Peter A. Taliancich in pro. per.

Before YARRUT, CHASEZ and REDMANN, JJ.

YARRUT, Judge.

Plaintiff sues to recover $360.22, principal balance due on a promissory note, together with interest, attorneys' fees and court costs. It is stipulated that Defendant is the maker and Plaintiff the payee, and the balance due is $360.22.

Defendant, however, contends that, (1) the debt was discharged in bankruptcy, and (2) the note was usurious under LSA-R.S. 6:589, which provides, inter alia:

'* * * no person shall directly or indirectly charge, contract for, or receive interest, discount, or consideration greater than eight percent per year upon the loan, use or forbearance of money, goods, or things in action, or upon the loan, use, or sale of credit, of the amount or value of three hundred dollars or less.'

Plaintiff contends that Defendant's discharge in bankruptcy was not valid because he made a false written financial statement upon which Plaintiff relied when the money was loaned, and that under the Federal Bankruptcy Act the debt was not discharged. 11 U.S.C.A. § 35.

The Trial Judge rendered judgment for Defendant, giving the following reasons:

'Taking the word of the Plaintiff himself, who testified he didn't have a small loan license and that this was a discount loan, under those circumstances I think a false financial statement doesn't have anything to do under a discount loan.

'The law and the evidence being in favor of the Defendant, I am dismissing this suit at the cost of Plaintiff herein.'

We have found no authority for the proposition that, when a lender making a Discount loan relies on a false financial statement, this does not prevent the debt being discharged in bankruptcy. However, we do find that the interest charged was usurious in contravention of the Louisiana Small Loan Act.

Plaintiff contends that the above quoted section of LSA-R.S. 6:589 is not applicable because the loan made exceeded $300.00 and was, in fact, for $301.00.

Although the amount of the note was $435.36, the actual sum received by Defendant was $292.29. Defendant was, as a condition for obtaining of the note, required to pay $8.71 for life insurance. Plaintiff claims that this sum should be added to the $292.29, Defendant actually received, to bring the amount of the debt up to the $301.00 figure.

We hold, however, that the amount of money the debtor actually receives is the amount of the loan and that a charge for compulsory life insurance should not be added to the principal received in order to exempt the loan from the purview of the Small Loan Act.

Although, theoretically, the life insurance gives...