State ex rel. Beck v. Associates Discount Corp.

Decision Date03 April 1959
Docket NumberNo. 34398,34398
Citation96 N.W.2d 55,168 Neb. 298
PartiesSTATE of Nebraska ex rel. Clarence S. BECK, Attorney General, and the Department of Banking of the State of Nebraska, Appellant, v. ASSOCIATES DISCOUNT CORPORATION, a foreign corporation, and Jack F. Kemnitz, Appellees, and Theodore L. Richling, Receiver-Appellant.
CourtNebraska Supreme Court

Syllabus by the Court.

1. The installment loan statutes include all persons or parties violating any of the inhibitory provisions thereof whether they be licensees or nonlicensees.

2. Courts in usury cases must look through the form to the substance of transactions by unlawful money lenders.

3. In cases of this character courts will look through the form to the substance of the transactions in order to determine whether there have been bona fide time sales or loans.

4. A fact, relation, or state of things once shown to exist is presumed to continue until the contrary appears.

5. In this respect a practice, if well established, will be presumed to have been followed until the contrary is shown.

6. An automobile dealer may in good faith sell a car on time for a price in excess of the cash price without tainting the transaction with usury, though the difference in prices may exceed lawful interest for a loan.

7. In order to have for foregoing principle apply it must appear that the buyer actually was informed of and had the opportunity to choose between a time sale price and a cash sale price.

8. However, these rules do not apply where it is proved that the transaction was not made in good faith but that it was a scheme and a device pursued to evade the operation against it of the usury statute.

9. The rule is that the contract should be supported if possible, rather than defeated. There is no presumption against the validity of contracts.

10. Within the scope of the foregoing rule each case must depend upon its own facts and circumstances.

11. If a contract is usurious in its inception no subsequent transaction will cure it. Hence, when a usurious contract is renewed by the giving of a renewal or substituted contract, the usury follows into and becomes a part of the latter contract, making it subject to the defense of usury to the same extent as was the original obligation.

12. In the absence of any statute or provision in a contract providing for the method of applying payments, the rule is that interest on a judgment or debt due is computed up to the time of the first payment, and the payment so made is first applied to discharge the interest, and afterwards, if there be a surplus, such surplus is applied to sink the principal.

13. In the absence of the common law or statutes of any other jurisdiction in the United States being pleaded and presented we will presume the common law or statutes of such other jurisdiction to be the same as ours. However, there is no such presumption where the local statute prescribes penalties and forfeitures.

14. Where a debt is made at a legal rate of interest and a note executed as evidence of the indebtedness thereby created, and at the maturity of the note a contract is made by which the time of payment is extended and a new note is given in which is included interest on the amount of the debt at a usurious rate for the time of the extension, the renewal note is tainted with usury.

15. Injunction is a proper remedy to be used by the state in the protection of public rights, property, or welfare, whether or not the acts complained of violate a penalty statute and whether or not they constitute a nuisance.

16. The relief ordinarily granted in equity is such as the nature of the case, the law, and facts demand, not at the beginning of the litigation, but at the time the decree is entered.

17. A receiver, as an officer of the court appointing him, is required to account to the court for the receipts and disbursements of all money and property received by him as a receiver.

18. As it is the duty of the receiver to account to the court whose officer he is, so there is the correlative duty to examine and rule upon the account.

19. Compensation of a receiver should be fixed at an amount that will be fair and reasonable for the services rendered and the question as to what is fair and reasonable is always one of facts in each case.

20. Ordinarily the compensation should not be greater than what would be reasonable compensation for doing the same amount and character of work if employed in the usual course of private business.

21. In fixing such compensation certain recognized factors enter into the determination. Consideration should be given to the nature, extent, and value of the property administered. The complications and difficulties encountered should be noted. The responsibilities involved, and assumed by the receiver, and the diligence and thoroughness which he displays are weighty elements. The knowledge, experience, labor, and skill required of the receiver and devoted by him to the receivership must be taken into account. Then, too, the time properly required to be spent is an important consideration.

22. In making such allowance the court is not confined to evidence formally introduced, in respect to the matter, but may act on its own knowledge and judgment as to the reasonableness of the charge in connection with what has been done by the receiver in discharge of the duties of his receivership, and the nature, extent, and value of the services rendered.

23. Reasonable fees for necessary legal services performed by attorneys for a receiver may be properly allowed as an expense of a receivership.

24. A reasonable attorney's fee in any proceeding is to be determined by the nature of the case, the amount involved in the controversy, the results obtained, and the services actually performed therein, including the length of time necessarily spent in the case, the care and diligence exhibited, and the character and standing of the attorneys concerned.

25. The opinion evidence of expert witnesses, as to the value of an attorney's services, is not conclusive or binding on the court. Such evidence is to be taken into consideration, with all the other evidence in the case, in arriving at a conclusion as to the just value of the services performed.

Clarence S. Beck, Atty. Gen., Robert A. Nelson, Lincoln, for the state.

Shotwell, Vance & Marchetti, Omaha, for Richling.

John W. Delehant, Jr., Omaha, for appellees.


WENKE, Justice.

This appeal involves an action commenced in the district court for Douglas County on July 7, 1955, by the State of Nebraska ex rel. Clarence S. Beck, Attorney General, and the Department of Banking of the State of Nebraska against Associates Discount Corporation, a foreign corporation, and Jack F. Kemnitz.

The early history of this litigation can be found in two of our opinions dealing with a former appeal of this cause. The first opinion is reported as State ex rel. Beck v. Associates Discount Corp., 161 Neb. 410, 73 N.W.2d 673. Therein we overruled the motion of defendants, appellees therein to vacate and dissolve our temporary restraining order of December 3, 1955, which order restrained defendants from performing certain acts therein enumerated. Our order of December 3, 1955, also appointed a receiver to take charge of the defendant Associates Discount Corporation's assets, which we had ordered to be impounded. The clerk of this court approved the bond tendered by the receiver we appointed and the receiver thereupon took possession of the assets of Associates Discount Corporation on December 12, 1955, and is still in possession thereof. The second of our opinions dealing with this first appeal is reported as State ex rel. Beck v. Associates Discount Corp., 162 Neb. 683, 77 N.W.2d 215. Therein we determined that the plaintiff, appellant therein, was a proper party to maintain the action and that its amended and supplemental petition stated a cause of action. We thereupon ordered the cause to be tried upon the merits and remanded it to the trial court for that purpose. In doing so we also granted plaintiff, appellant therein, a temporary injunction and continued the receivership in full force and effect. The law therein announced is here controlling as the law of this case.

Thereafter plaintiff sought to amend paragraph VI and the prayer of its amended and supplemental petition. Its request to do so should have been granted. In its amended and supplemental petition, as thus amended, plaintiff alleged:

'That the defendants and each of them have failed to procure a license to conduct an installment loan business in the State of Nebraska and, with the intent of evading the usury laws of the state, have engaged in a devise (device) and subterfuge by means of which they have exacted excessive, unlawful, exorbitant, unconscionable and usurious charges for the making of installment loans to purchasers of automobiles, as hereinafter more specifically set forth.

'That for the purpose of carrying out said devise (device) and subterfuge the defendant, Associates Discount Corporation, purports to be engaged solely in the business of purchasing, at a discount, from automobile dealers, notes and mortgages and conditional sales contracts covering the sales of automobiles; that in fact, none of these contracts represent bona fide time sales transactions but constitute direct loans by the defendant, Associates Discount Corporation, to the purchasers of such automobiles.'

Plaintiff then goes on to allege in detail the technique or methods used by the defendants to accomplish their purpose and, by reason thereof, allege: 'That all of the loans made by defendants in violation of law, as hereinbefore set forth, are void and uncollectible.' For a full statement of these details, and our discussion thereof, see State ex rel. Beck v. Associates Discount Corp., 162 Neb. 683, 77 N.W.2d 215. The...

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  • Industrial Credit Company v. Berg
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • January 30, 1968
    ...of the Installment Loan Act would be void even in the hands of holders in due course.7 See, e. g., State ex rel. Beck v. Associates Discount Corporation, 168 Neb. 298, 96 N. W.2d 55, 70 (1959); Robb v. Central Credit Corporation, supra, 100 N.W.2d at 64. In each of these situations, however......
  • Sayer v. Bowley
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    ...receivership. The court's decision will not be disturbed on appeal absent an abuse of discretion. See, State ex rel. Beck v. Associates Discount Corp., 168 Neb. 298, 96 N.W.2d 55 (1959), reh'g denied and opinion modified 168 Neb. 803, 97 N.W.2d 583, overruled on other grounds, Dailey v. A.C......
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    ...the defendants to show that the trust had been successfully cured prior to the filing of this action. State ex rel. Beck v. Associates Discount Corp., 168 Neb. 298, 308, 96 N.W.2d 55, 65, modified 168 Neb. 803, 97 N.W.2d 583 (1959), overruled on other grounds Dailey v. A.C. Nelsen Co., 178 ......
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