Court Opinion

ID: 9602109
Source: CourtListenerOpinion
Date Created: 2023-08-22 01:51:55.659934+00
Date Added: 2024-06-11T18:02:00.830388
License: Public Domain

Pannell, Judge.
This is an appeal by a borrower from the overruling of her motion to set side a judgment rendered against her, by default, in favor of a licensee under the Georgia Industrial Loan Act, made on grounds the loan instrument attached to the pleading was void, and the pleading, therefore, showed on its face that no cause of action existed. The grounds stated were (a) The contract to provide for "interest from maturity at the rate of 8% per annum,” and (b) The contract provided for charges in excess of those permitted by the Act in providing that "failure to pay any instalment or other sums when due hereunder shall, at the option of the holder hereof and without notice, render all instalments due and payable at once.” The amount of the note was $2,064, payable in 24 instalments of $86.00 each. The instrument showed the cash advance to be $1,382.80 and added thereto were fees of $106.56, recording fee $1.00, and insurance $288.96 and 2 years interest of $284.68, each $86.00 instalment consisting of principal, etc., and interest which was unaccrued or unearned until the respective instalments became due each month. Held:
1. It was held in Lewis v. Termplan, Inc., 124 Ga. App. 507, 508 (184 SE2d 473) in a similar case under the Georgia Industrial Loan Act, "That the maximum interest for a 24-month note had already been calculated and included and could not, under Code Ann. § 25-315 (a) [Section 15 (a), Georgia Industrial Loan Act, Ga. L. 1955, pp. 431, 440] be discounted in advance, for which reason when the plaintiff opted to accelerate and claim *97unearned interest on the otherwise unmatured instalments of November 5, 1970, through June 5, 1971, this amount was usurious and the instrument authorizing its collection is void under Code Ann. § 25-9903 [emphasis supplied] [Section 20, Georgia Industrial Loan Act, Ga. L. 1955, pp. 431, 444].” It is true that the record in the present case does not show on its face that the judgment obtained includes any usury; however, the note contains a provision authorizing its collection and this alone is sufficient to void the obligation. Section 16 of the Georgia Industrial Loan Act (Ga. L. 1955, pp. 431, 442; Code Ann. § 25-316) provides: "No licensee shall charge, contract for, or receive any other or further amount in connection with any loans authorized by this Act,” than those therein provided. The last sentence of Section 20 of the Georgia Industrial Loan Act (Ga. L. 1955, pp. 431, 444) provides "Any loan contract made in violation of this Act shall be null and void.” The statement in Lewis v. Termplan, supra, that "This plaintiff sought and obtained a judgment which, judged alone by the terms of the instrument, was valid,” was not a holding that the judgment based on the instrument was valid but merely a statement that the judgment based on the instrument, considered without respect to the laws governing such instruments was valid.
2. The contract or note here involved contained the following provision: "Any provisions of this instrument prohibited by the laws of this State shall be ineffective to the extent such prohibition without invalidating any other remaining provisions of this instrument.” To give this provision of the contract effect would nullify the provision of the statute above quoted and applied, and Section 16 of the Georgia Industrial Loan Act, supra, makes provision for just such an attempt when it provides that "No licensee shall divide into separate parts any contract for the purpose or with the effect of obtaining charges in excess of those authorized by this Act.”
3. Having held that the contract is void for the reasons given, it is unnecessary to determine whether it may be void for other reasons.
4. The trial court erred in overruling appellant’s *98motion to set aside the judgment rendered.
Argued September 5, 1973
Decided February 12, 1974
Rehearing denied March 4, 1974
Alfred C. Rammer, II, Lee Payne, for appellant.
Arnall, Golden & Gregory, H. Fred Gober, for appellee.
Hansell, Post, Brandon & Dorsey, Allen Post, W. Rhett Tanner, amicus curiae.

Judgment reversed.

Bell, C. J., Hall, P. J., Deen, Quillian, Evans and Stolz, JJ, concur. Eberhardt, P. J., and Clark, J., dissent.