Court Opinion

ID: 3403829
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:16:49.83662+00
Date Added: 2024-06-11T13:52:22.717617
License: Public Domain

The act of 1925 (Ga. L. 1925, pp. 370, 382, § 41), provides in part as follows: "Be it further enacted by the authority aforesaid, and it is hereby enacted by authority of the same, that there shall be an appellate division of said court for the rehearing of matters arising in civil causes therein, and with power to grant or refuse new trials and render finaljudgments in cases brought to said appellate division as herein provided. Said appellate division shall consist of three judges of said court, to be designated by the chief judge of said court, none of which shall be the trial judge whose judgment is being appealed from." (Italics ours.) The appellate division of the Atlanta municipal court was authorized to find that, in addition to charging the borrower a higher rate of interest than the legal rate, the lender charged, as a part of the consideration of the loan itself, certain other sums, and that the arrangement for the payment of these additional sums was a mere scheme or device to evade the statute against usury. Sanders v. Nicholson,101 Ga. 739 (28 S.E. 976). The court having so found that the contract upon which the suit was brought was infected with usury, the appellate division did not err in crediting on the principal the amounts paid, which, by virtue of the usury charge, had been applied to interest. Bank of Lumpkin v. Farmers State Bank,161 Ga. 801, 808 (132 S.E. 221). In the instant case, the court (the appellate division) found from the evidence, and it was authorized so to find, that the sums paid in addition to the full legal rate of interest entered into and became a part of the consideration moving the lender to make the loan itself. Lewis
v. Citizens Bank, 53 Ga. App. 545 (186 S.E. 457), cited by plaintiff in error, is distinguishable from the instant case. In that case the borrower had paid the full legal rate of interest and in addition thereto had made certain payments, as compensation for professional services rendered to the borrower
by an attorney to examine the public records, and to pay the expense of recording the mortgage, which payments, however, did not enter into and become a part of the consideration moving thelender to make the loan itself.
In this case the defendant in error borrowed $250 from the plaintiff in error, and received therefor only $194.25, $32.50 being deducted as interest on the basis of eight per cent. per annum for *Page 882 
twenty months; $5 was deducted as an investigating fee; $11.50 was deducted for expenses in making the loan; $5 was deducted for insurance on the life of the maker of the note; and $0.75 was deducted for recording fee. The loan was secured by a bill of sale to certain household furniture and personal effects. The loan was repayable in monthly installments of $12.50 per month, extending over a period of twenty months. We might observe that if all banks in a community universally used the system or scheme here adopted of charging large and small borrowers on each loan a fee, in addition to the maximum legal rate of interest, for itsown investigation of each loan (an investigation by its regularly paid, salaried agents is but its own investigation), it would be at least unfortunate for that community.
Rehearing denied. Broyles, C. J., and Guerry, J., concur.