Court Opinion

ID: 9520354
Source: CourtListenerOpinion
Date Created: 2023-08-07 01:37:33.563602+00
Date Added: 2024-06-11T12:46:01.615524
License: Public Domain

Carter and Boslahgh, JJ.,
dissenting.
We do not agree with the holding in this case that the loan in question violated the provisions of the Industrial Loan and Investment Company Act.
Section 8-419, R. R. S. 1943, which prohibits the splitting of loans “for the purpose of obtaining a higher rate of charge,” is not involved in this case because the second note bears interest only at the rate of 9 percent per annum. In Jourdon v. Commonwealth Co., 170 Neb. *338919, 104 N. W. 2d 681, which involved a series of loans, each bearing interest at the maximum rate, the court said: “If appellee had desired a proper arrangement it could have provided for 9 percent interest on any note executed by appellant during the time a previous note of his was unpaid. The prohibition of the statute is not that there shall not be more than one loan during any period of time but it is that there shall not be charged 36 percent on the first $50 of unpaid principal and 18 percent on the next $500 of unpaid principal on more than one loan at the same time. § 8-418, R. R. S. 1943. There may be as many contracts of loan at the same time as the parties desire but the several loans when considered together must not violate section 8-419, R. R. S. 1943. * * * The statute does not prevent the making of more than one loan to a borrower at the same time. It does condemn charging maximum interest prescribed by section 8-418, R. R. S. 1943, on the unpaid principal of more than one loan made to a borrower and existing at the same time for the purpose of obtaining a higher rate of charge. The prohibition of the statute is that the loan company shall not permit any person to become obligated on more than one contract of loan at the same time if the purpose therefor is a higher charge than if there was only a single obligation.” The requirement of section 8-419, R. R. S. 1943, is satisfied if the rate of charge on all outstanding contracts is no higher than would be permitted if all contracts were consolidated into one obligation.
Section 8-429, R. S. Supp., 1957, which requires loans to be repayable within 36 months, is by its terms applicable to loans “made under this act.” This limitation was intended to apply only to that part of a loan which bears interest at a rate in excess of 9 percent per annum. This appears to be the holding of other courts dealing with the subject. Vann v. Accounts Supervision Co. (Fla.), 88 So. 2d 548, 58 A. L. R. 2d 1260. See Annotation, 58 A. L. R. 2d 1263. In the Vann case the court said: *339“As to defense number (2), supra, Section 516.20 Fla. Stat. 1955, F. S'. A., provides that ‘No licensee shall enter into any contract for a loan, for a period of longer than twenty-four months after making the loan.’ Clearly, this provision was intended to limit the period during which the loan company could charge interest at the rate of 3% percent per month on any one obligation; and since the note and mortgage here sued upon expressly provided that, after 24 months, the interest rate should be ‘at maximum rate permitted by Florida law,’ there was no violation of this section of the Act.”
Corporations organized and licensed under the Industrial Loan and Investment Company Act have the powers conferred upon general corporations in addition to those specifically conferred upon industrial loan and investment companies. § 8-407, R. R. S. 1943. There is no limit upon the amount that may be loaned under the act. § 8-418, R. S. Supp., 1957.
The court has approved multiple contracts with one borrower if the maximum rates are not charged in more than one contract at the same time. The notes in question would have been valid if made as separate transactions at different times. We believe that they are also valid even though made at one time and as part of one transaction.
The judgment of the district court was correct and should have been affirmed.