Court Opinion

ID: 9735270
Source: CourtListenerOpinion
Date Created: 2023-08-26 18:07:39.887028+00
Date Added: 2024-06-11T18:26:56.465370
License: Public Domain

JUSTICE GORDON, specially concurring: While I agree with the result reached by the majority, I cannot agree with their reasoning concerning the interest charge until the date of judgment against the full amount paid for a security which was sold prior to judgment. Clearly, interest can be charged against the amount paid to the seller up to the time of the purchaser’s resale. Moreover, contrary to the seller’s contention, I agree that interest may further be charged to the date of judgment upon the difference between the original amount paid by the purchaser and the amount recouped on resale. Thus, where as here, the purchaser originally paid in excess of $7,000 for the securities which he ultimately resold for $12.50, the interest on the securities which were the subject of the resale may continue to accrue to the date of judgment on the difference between the original purchase price and the amount recouped on resale since, under the statute, the seller is obligated to make restitution for that difference. However, contrary to the majority, I cannot agree that interest may be charged from the date of recovery against the money actually recovered by the purchaser from the resale. Since the purchaser has the use of the money received from the resale, any interest received against that sum would constitute a windfall and an effective double recovery to the purchaser. Contrary to the majority, I do not agree that such construction is compelled under the provisions of section 13(A) of the Illinois Securities Law of 1953 (815 ILCS 5/13(A) (West 1996)). Under section 13(A)(2) on resale by the purchaser, the seller remains hable “for the amounts set forth in clause (1) of this subsection A less any amounts received by the purchaser for or on account of the disposition of the securities.” 815 ILCS 5/13(A)(2) (West 1996). Thus, the seller is released from any obligation to repay the amount which was recovered by the purchaser on resale. Granted, section 13(A)(2) refers to the “amount set forth” under 13(A)(1) as the remaining amount to be paid after deducting the amount received on resale. However, section 13(A)(2) need not be construed to include interest charged against the money recovered on resale. Where the underlying principal indebtedness is reduced by the amount recovered, it naturally follows that the interest obligation is correspondingly diminished. Interest, as defined, is the “price paid for borrowing money generally expressed as a percentage of the amount borrowed paid in one year.” Webster’s Third New International Dictionary 1178 (1993). Under this definition, interest would accrue against those funds which the seller is liable to pay back to the purchaser. Such funds would constitute “money borrowed” under the Webster definition. To the extent that the seller is discharged from liability with respect to any portion of the principal, that portion can no longer be characterized as money borrowed, i.e., money which the seller is required to pay back. It would, therefore, be wholly inappropriate to characterize an ongoing charge against a sum no longer owed, namely, the money recovered from the resale, to be interest due under section 13(A)(1). Accordingly, such a charge would not be due under the provisions of section 13(A)(2) which refer to the “amounts set forth” under section 13(A)(1). Notwithstanding the above, in this cause, the overcharge of interest is minimal, given the fact that the amount recovered on resale was $12.50. The amount is so minuscule that it can be considered to be de minimus and would, therefore, not mandate a remand or adjustment. But the point, nevertheless, has to be made in the event that sums become large enough to warrant further action.