Sones v. Spiegal

• Court: Supreme Court of Nebraska
• Citation: 140 N.W.2d 799,179 Neb. 838
• Docket Number: No. 35959,35959
• Parties: William SONES, Appellant-Cross-Appellee, v. Richard H. SPIEGAL and Bertha B. Spiegal, Appellees-Cross-Appeellants.
• Decision Date: 11 March 1966

Page 799

140 N.W.2d 799 179 Neb. 838 William SONES, Appellant-Cross-Appellee,
v.
Richard H. SPIEGAL and Bertha B. Spiegal, Appellees-Cross-Appeellants. No. 35959. Supreme Court of Nebraska. March 11, 1966.

Page 800

Syllabus by the Court

1. A loan of money made by a nonlicensee under the provisions of the Installment Loan Act, sections 45-114 to 45-155, R.R.S.1943, which exacts interest and charges in excess of 9 percent per annum, is within the inhibitory provisions of the act.

2. The Legislature may validate contracts which were illegal when made by the retroactive repeal of a previous law.

3. Where the Legislature provides that a repeal shall be retroactive, contracts which were illegal when made, because of the law which has been repealed, are validated.

W. A. Ehlers, Omaha, for appellant.

Jerome Grossman, Marks, Clare, Hopkins & Rauth, J. William Gallup, Omaha, for appellees.

Heard before WHITE, C. J., and CARTER, SPENCER, BOSLAUGH, BROWER, SMITH, and McCOWN, JJ.

[179 Neb. 839] WHITE, Chief Justice.

This is an action in equity by the plaintiff to cancel two allegedly usurious notes and real estate mortgages, to recover all money paid to defendants, and to recover possession of abstracts of title. The essential facts are undisputed. The evidence shows that plaintiff obtained two loans from the defendants. On the first loan dated October 15, 1957, the plaintiff gave a note and mortgage of $850 payable at the rate of $35 per month with interest at 7 percent, but he only received $500 as consideration. The second loan was dated April 10, 1958, from which plaintiff received $7,789.31 consideration in cash, but executed a note for $10,500 at 6 percent interest, payments being due in installments of $150 per month. The total payments made on the first note were $175 and a total of $6,150 was paid on the second note. At the time of the making of the $10,500 note the balance due on the $850 note dated October 15, 1957, was deducted in the sum of $698.02. The difference between the actual amounts loaned and the amount of the notes was termed a 'discount' by the parties. The evidence shows that the defendants paid delinquent taxes on the mortgaged property in the sum of $1,414.11.

The judgment of the lower court found that the plaintiff received a total consideration of $8,114.31 on the note of April 10, 1958, consisting of $7,789.31 in cash and the cancellation of the note of $850 upon which there was a balance of principal owing in the sum of $325. The court found that payments in the sum of $6,150, 41 installments of $150, have been made, leaving a balance due on principal in the sum of $1,964.31; that the defendants were entitled to reimbursement in the sum of $1,414.11 for taxes paid; that the total amount due defendants was $3,378.42; and that foreclosure be granted defendants for this amount with interest at 6 percent from date of entry of judgment.

The case was heard on its merits in May 1963. The court took the case under advisement and decided it on [179 Neb. 840] August 3, 1964. The court found that L.B. 17, Seventy-fourth (Extraordinary) Session, was applicable; that under the terms of said act the penalty for violation of the Installment Loan Act was changed retroactively to be a forfeiture and refund of all interest and charges on the loan involved ;that the interest and charges exceeded the 9 percent maximum permissible under the act; that the loan was not void; and that the defendants were entitled to recover the balance due on the principal, without interest or charges, in the sum of $3,378.42.

Plaintiff complains of the fact that the district court held the case under advisement from May 1963 to August 3, 1964. At the time of the trial of the case, the law in effect would have rendered the notes...