McDonald v. G. A. C. Finance Corp.
| Decision Date | 09 March 1967 |
| Docket Number | No. 1,No. 42613,42613,1 |
| Citation | 115 Ga.App. 361,154 S.E.2d 825 |
| Parties | Bergen McDONALD et al. v. G.A.C. FINANCE CORPORATION |
| Court | Georgia Court of Appeals |
Syllabus by the Court
1. The principal and interest claimed were set out separately in the affidavit for foreclosure of the bill of sale to secure debt: details as to how the interest was calculated are not required.
2. The 'face amount of the contract' as referred to in the Georgia Industrial Loan Act is arrived at by the method outlined in Robbins v. Welfare Finance Corp., 95 Ga.App. 90, 96 S.E.2d 892.
3. Charges made for insurance which the lender is authorized to require under provisions of the Act do not render the loan usurious.
4. Where the judgment was for the principal only, a contention that the makers of the note had not been credited with unearned interest is without merit.
On March 15, 1966, G.A.C. Finance Corporation of Calhoun, Georgia, filed an affidavit to foreclose a chattel mortgage, showing that Louise and Bergen McDonald owed $548.58 principal, $199.18 interest, and $157.44 insurance fees on the secured loan. The note executed by the McDonalds provided that the 'total amount due on note' was $984, payable in 24 consecutive monthly installments of $41 beginning October 15, 1965, and bearing interest after maturity at the rate of 8% per annum. The note recited that it was made pursuant to the provisions of the Georgia Industrial Loan Act (Ga.L.1955, p. 431) and that it should not be construed to contract for or charge a greater amount than allowed by the Act.
Defendants filed an affidavit of illegality admitting the execution of the note and security agreement but showing that the amount of the loan was not $984, as indicated in the note and security agreement, but that plaintiff only loaned defendants the sum of $627.48; that at the time the instruments were executed plaintiff exacted the sum of $135.72 as interest, in addition to 'other charges for insurance' which defendants did not need or desire; that the most plaintiff could have exacted as interest was $50.20, and the interest charged is usurious in the sum of $85.52; that the note and security agreement are usurious in that the defendants would be paying an interest rate in excess of 8% per annum because defendants received only $627.48 in money and value as consideration for executing the note and security agreement in the amount of $948; that the security agreement was given to secure a usurious loan and is void under Code Ann. §§ 57-116 and 25-315; that the note has not matured and plaintiff is not giving defendants credit for unearned interest; that the affidavit of foreclosure does not set out the amount of principal and interest separately and for this reason should be dismissed. As relief defendants pray that the note and security agreement be annulled and canceled because both are void on account of usury.
In answer to the affidavit of illegality, plaintiff amended by alleging that at the time the loan was made plaintiff was a corporation licensed, operating and doing business under the Georgia Industrial Loan Act of 1955. The trial court rendered judgment in favor of plaintiff without the intervention of a jury for $548.58, the amount of the principal, and defendants appeal.
John D. Edge, Calhoun, for appellants.
No appearance for appellee.
1. There is no merit in the contention that under Harris v. Usry, 77 Ga. 426, the foreclosure is fatally defective because the principal and interest are not set out separately. The plaintiff's affidavit sets forth $548.58 principal, $199.18 interest to date of the affidavit, $157.44 insurance fees, and future interest at the rate of 8% per annum.
2. Defendants contend that the loan is usurious even if made under and by virtue of the Georgia Industrial Loan Act. The thrust of the argument seems to be that Robbins v. Welfare Finance Corp., 95 Ga.App. 90, 96 S.E.2d 892, should not be followed. We followed and expressly...
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