Court Opinion

ID: 4479638
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:13:47.312544+00
Date Added: 2024-06-11T15:03:32.849127
License: Public Domain

Mukdock, /., dissenting: I think a large part, if not all, of the “carrying charges” was interest within the meaning of the statute. That part which was paid to the automobile dealer as a “kick-back” and the part which was used to obtain insurance can be disregarded, because the remainder, together with admitted interest, was more than 80 percent of the gross income of the petitioner. The services of this petitioner were called into use only because a prospective purchaser of a car did not have enough cash of his own and had to have the temporary use of the funds of this petitioner in order to buy the car. The plan was fully arranged in advance under which he actually obtained the use o.f the funds of this petitioner. Of course he had to pay for the use of those funds. The petitioner in effect discounted the purchaser’s note, paying over to the automobile dealer on behalf of the purchaser the amount of the note, less discount, and holding the note until maturity, by which time he had obtained the full face amount of the note, including the discount or the amount received as compensation paid for use of the money loaned. This is within the definition of interest. Although the name is not controlling, the words “carrying charges” used by the petitioner to describe this income would seem to have no meaning at all unless they meant charges made for the carrying of loans to the purchasers of automobiles. The Western Acceptance Corporation case relied on in the majority opinion is distinguishable. Western did not hold the obligations to maturity. It obtained them from automobile dealers and immediately sold them to another company and thereafter acted merely as a collection agency for the latter. Thus, Western did not lend its money. Here the money outstanding during the period of the loan belonged to the petitioner and its profit was compensation for thus allowing its money to be used to purchase the car and to be repaid at a later date. If the purchaser had obtained the money in some other ways, the fact that he was paying for the use of it might be more apparent, but the fact would be the same in all cases. Mellott and Oppee, JJ., agree with this dissent.