Robinson v. Colonial Discount Co.

• Decision Date: 20 June 1962
• Docket Number: No. 3,No. 39491,39491,3
• Citation: 106 Ga.App. 274,126 S.E.2d 824
• Parties: Willie ROBINSON et al. v. COLONIAL DISCOUNT COMPANY, Inc
• Court: Georgia Court of Appeals

Page 824

126 S.E.2d 824

106 Ga.App. 274

Willie ROBINSON et al. v. COLONIAL DISCOUNT COMPANY, Inc.

No. 39491.

Court of Appeals of Georgia, Division No. 3.

June 20, 1962.

Rehearing Denied July 9, 1962.

Syllabus by the Court

1. A petition based on a loan contract made under the Industrial Loan Act (Code Ann.Chapt. 25-3) is subject to general demurrer where the contract shows on its face that it is usurious. Code Ann. 25-9903.

2. Where extensive property and contract rights have vested under decisions of this court construing a statute and the legislature has failed to amend the specific statutory provision involved, although amending other sections of the same law, this court will decline to overrule its prior decisions.

3. Where a plaintiff charges interest and collects fees in accordance with the Industrial Loan Act (Code Ann. Chapt. 25-3) and subsequently seeks to enforce collection of them by suit, it must plead that it is licensed in compliance with the provisions of that act.

Colonial Discount Company, Inc. (plaintiff) brought action against Willie and Betty Jean Robinson (defendants) on a promissory note alleging a stated balance was due along with interest from the date of default and attorneys fees. A copy of the note was attached. The defendant demurred generally to the petition and filed an answer which set up a plea of usury. The general demurrers were overruled and the exception is to that ruling.

N T. Anderson, Victor K. Meador, Atlanta, for plaintiff in error.

J. Sam Plowden, Atlanta, for defendant in error.

Hansell, Post, Gardner, Brandon & Dorsey, Allen Post, J. William Gibson, Atlanta, for parties at interest not parties of record.

EBERHARDT, Judge.

1, 2. The defendants argue that the note sued on shows upon its face that it is usurious, but recognize that it falls within the pattern of Robbins v. Welfare Finance Corp., 95 Ga.App. 90, 94(3), 96 S.E.2d 892 and say that the statute (Code Ann. § 25-315(a)) was erroneously interpreted or construed in Robbins and that we should now overrule it.

Plaintiff insists that the general demurrer to its petition can not reach this question, urging Customers Loan Corp. v. Jones, 100 Ga.App. 653, 112 S.E.2d 362 as authority for that position. We do not think that Customers Loan can be used as authority for the proposition since, as is pointed out in Judge Townsend's concurring opinion, the court concluded there that no usury appeared on the face of the petition or the notes. If the contrary were true, we would here feel impelled to overrule that case for the reason that it did not take into consideration the provision of Code Ann. § 25-9903 wherein it is asserted that 'Any loan contract made in violation of such Chapter shall be null and void.' It must follow that if a note or loan contract made under the Industrial Loan Act shows on its face that it is infected with usury it is absolutely void and there could be no recovery on it. In that situation it is elementary that a general demurrer will reach the problem and raise the issue.

Since the day when Jacob robbed his brother Esau of his birthright, and before, there have been those who would overreach a fellow who is pressed with need. These, as the poor, will be with us always, and thus we must and do have regulatory laws for the lending business of both the scrupulous and the unscrupulous. ¹

If this were a case of first impression it is possible that we might come to some conclusion different from that in Robbins as to what a proper construction of the phrase 'face amount of the contract' should be. But that decision has been in the books since it was rendered in 1957. This court declined to overrule and followed it in Haire v. Allied Finance Co., 99 Ga.App. 649, 109 S.E.2d 291. The legislature has been in session each year since Robbins was rendered. Indeed, it was in session at the time the decision was handed down, and at that same session and a month subsequent thereto the Act was amended, ² and it was amended again in 1959. ³ Neither of the amendments made any change in Code Ann. § 25-315(a) or in the interpretation thereof as found in the Robbins decision, nor has the Legislature sought to effect any such change at any of its subsequent sessions. The law has been administered and enforced in accordance with the Robbins interpretation and many thousands of contracts have been entered into upon the faith of it. Rights have been fixed under contracts thus made to such an extent that any disturbance of Robbins by us would adversely affect a great segment of our economy as represented by the industrial loan business. ⁴ If any change in that interpretation is wise or desirable, the matter addresses itself to the General Assmebly where the change could be made in a manner that would not wipe out vested rights under contracts honestly made and in good faith relying upon what we have said the act means. The defendant here, and others who are similarly situated, is entitled to the benefit of the doctrine of stare decisis, for this is a situation in which vested property rights are to be affected. Moore v. Atlanta Transit System, 105 Ga.App. 70, 86, 123 S.E.2d 693, and citations; Harrison v. McHenry, 9 Ga. 164, 171, 52 A.D. 435; Adams v. Brooks, 35 Ga. 63, 65. 'The court has found adherence to the settled rule especially desirable in cases involving the security of contracts, property interests, wills and trusts and commercial transactions in general.' Moore, Stare Decisis, p. 34 (1958). Consequently we must again decline the request to overrule Robbins and follow it instead. The note here involved is identical in terms with that in Robbins, and under that decision no usury is involved.

3. But the general demurrer should have been sustained for yet another reason. It is obvious from an examination of the note in question that the loan was made pursuant to provisions of the Industrial Loan Act (Ga.L.1955, pp. 431-445; Code Ann. Ch. 25-3). There is such a recital in the face of the note. The act provides that 'On and after the effective date of this Chapter no person within the operation of this Chapter shall * * * engage in the business of making such loans of $2,500 or less, without a license from the Commissioner as provided in this Chapter.' Code Ann. § 25-303. 'Person' is defined as including 'individuals, co-partnerships, associations, corporations, and all other legal and commercial entities.' Code Ann. § 25-304. As the penalty, 'Any loan contract made in violation of such Chapter [Code Ann. 25-3] shall be null and void.' Code Ann. § 25-9903.

As was said in McLamb v. Phillips, 34 Ga.App. 210(1) 129 S.E. 570, 'the general rule of law is that, when the license required by the statute is not imposed only for revenue purposes, but requires registration or licensing primarily for the purpose of protecting the public from acts mala in se or detrimental to good morals, or from improper, incompetent, or irresponsible persons * * *, their imposition amounts to a positive prohibition of a contract made without a compliance with and in violation of the statute, and by implication renders such a contract void and unenforceable. Taliaferro v. Moffet, 54 Ga. 150, 153; Murray v. Williams, 121 Ga. 63, 48 S.E. 686; Jalonick v. Greene County Oil Co., 7 Ga.App. 309, 311, 66 S.E. 815; Singleton v. State, 14 Ga.App. 527(3), 533, 81 S.E. 596; 37 Corpus Juris, 260; 17 R.C.L. 560.' Accord: Bernstein v. Peters, 68 Ga.App. 218(1), 220, 22 S.E.2d 614. See Knight Drug Co. v. Naismith, 73 Ga.App. 793, 796, 38 S.E.2d 87 and citations. While McLamb involved the now-repealed 'salary buyers' provisions of the Code (formerly Code Ch. 25-2), ⁵ the reasoning is equally applicable to the Industrial Loan Act of 1955.

In the case sub judice, the only allegation by the plaintiff of its status was that it is 'a corporation duly chartered under the laws of the State of Georgia, and is therefore entitled to sue in its own name.' A petition must be construed in the light of its omissions as well as its averments, and there is no averment here of compliance with the Industrial Loan Act. The above allegation does not measure up to what is probably a minimum allegation that plaintiff was 'duly licensed' approved recently in Nussbaum v. Shaffer, 105 Ga.App. 430(1), 124 S.E.2d 658, a case...