Wyoming Discount Corp. v. Lamar

• Decision Date: 03 September 1968
• Docket Number: No. 3660,3660
• Parties: WYOMING DISCOUNT CORPORATION, a Wyoming Corporation, and Valley Finance Company, Appellants (Defendants below), v. Catherine LAMAR and Newton Lamar, Appellees (Plaintiffs below).
• Court: Wyoming Supreme Court

Page 620

444 P.2d 620

WYOMING DISCOUNT CORPORATION, a Wyoming Corporation, and Valley Finance Company, Appellants (Defendants below), v. Catherine LAMAR and Newton Lamar, Appellees (Plaintiffs below).

No. 3660.

Supreme Court of Wyoming.

Sept. 3, 1968.

W. A. Smith, of Smith & Vidakovich, Lander, for appellants.

Arnold B. Tschirgi, Lander, for appellees.

Before HARNSBERGER, C. J., and GRAY, McINTYRE, and PARKER, JJ.

Mr. Justice McINTYRE delivered the opinion of the court.

Catherine Lamar and Newton Lamar, wife and husband, brought suit against Wyoming Discount Corporation and Valley Finance Company claiming defendants on the same day made a loan for $1,000 to Newton Lamar and another loan for $1,000 to Catherine Larmar, making a total of $2,000. Plaintiffs' claim is that this violated the provisions of the Wyoming Small Loan Act, §§ 13-489 and 13-490, W.S.1957, C. 1965, and that plaintiffs under the act are entitled to recover from defendants all principal and interest paid, amounting to $2,360.15.

On motion of the plaintiffs, the district court granted summary judgment against both defendants for the full amount asked, with a finding that defendants had violated the Wyoming Small Loan Act in making loans 'aggregating larger than the maximum permitted at advanced rates of interest,' and with a further finding that the notes and documents submitted are not subject to modification by parol evidence. The defendants have appealed.

A disposition of this case requires an interpretation of the Wyoming Small Loan Act. We are impressed with the fact that this act is peculiar in some respects and incomplete to some extent. It is unique in that the substance of the act is contained in a single section (§ 13-490) which appears to contain only definitions. This is pointed out in 1 Wyo.L.J. 132.

There is a provision for investigations by county attorneys for the purpose of discovering violations. This provision, coupled with the penalty provisions, makes it clear that violations are criminal and to be prosecuted as such. The penalty paragraph, however, after providing that every violator shall be fined not less than $100 nor more than $300, or confined in the county jail 'not less than' 60 days, or both such fine and imprisonment, then states, 'and in addition shall forfeit all principal and interest due or collected.'

Appellants argue the penalty of being compelled to pay back all principal and interest already paid, like the other penalties provided for, could be imposed only after a criminal trial before a jury. Whether that be true or not, it is apparent the statute itself does not provide for a civil suit by the borrowers against the lenders to recover back what has been already paid.

This has caused appellants to question who receives the forfeiture referred to in the act, especially since Art. 7, § 5, Wyoming Constitution, provides that all fines and penalties under general laws of the state shall belong to the public school fund. If the legislature had provided for a civil action to recover the forfeiture mentioned in the penalty paragraph, the one-year limitation for actions upon a statute for a penalty or forfeiture would likely apply, if pleaded, unless the legislature provided another limitation. See § 1-19, W.S.1957.

A question not to be overlooked in the penalty paragraph of § 13-490 is, how long is a violator to be imprisoned? The act states not less than 60 days, but it is incomplete in that the maximum time is not stated. A question could be raised with respect to the validity of this part of the penalty paragraph in this condition of uncertainty. See State v. Gallegos, Wyo., 384 P.2d 967, 968; and Day v. Armstrong, Wyo., 362 P.2d 137, 147-148.

The unusual form and provisions of the Wyoming Small Loan Act have caused us to review the history of its enactment in the legislature. Apparently one of the drafts of the uniform small loan law had been introduced during the 1945 session of the legislature. In committee, the title was amended, all of the body of the act was stricken and in lieu of it the language of the Wyoming Small Loan Act was born. Except for one subsequent amendment in 1953, which changed the figures having to do with loan sizes and rates of interest, the law still remains as adopted in committee in 1945.

The uniform law proposed would have provided that any contract or loan made in violation of the act would be void, and the lender would have no right to collect, receive, or retain any principal, interest, or charges whatsoever. When the legislature attempted to declare a forfeiture of all principal and interest already collected, it failed to provide how or by whom that would be accomplished.

With respect to the length of imprisonment, the uniform law originally proposed in 1945 would have provided for imprisonment of 'not more' than 30 days. The legislature changed the 30 days to 60 days but it said 'not less' than 60 days.

As far as the present case is concerned, evidence offered on behalf of defendants in connection with plaintiffs' motion for summary judgment, tends to establish that Wyoming Discount Corporation does not have a place of business in Lander, where these loans were made; that Valley Finance Company is licensed to make loans and does make loans in Lander; that these parties have an arrangement whereby Valley Finance Company, after making loans, sells and assigns them to Wyoming Discount Corporation; and that such practice and procedure was followed with respect to the Lamar loans. It is claimed that sometimes, as was done with the Lamar loans, notes and mortgages are taken on forms of and in the name of Wyoming Discount Corporation, with the understanding and agreement that as soon as such loans are made, the instruments are to be forwarded to Wyoming Discount Corporation in Cheyenne; and if accepted, Valley Finance Company would be reimbursed for the monies loaned, and if rejected, the notes and other instruments would be assigned to Valley...