Court Opinion

ID: 9541313
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:24:17.308661+00
Date Added: 2024-06-11T15:02:43.121667
License: Public Domain

DISSENTING OPINION OF
MARUMOTO, J.
I dissent from that portion of the opinion of the court disallowing interest which was awarded by the circuit court to Bancorp.
*54According to that opinion, Bancorp has priority over Strouss only with respect to principal, but not with respect to interest, because the second proviso of HRS § 507-46 gives priority only to money advanced under and secured by the mortgage, and interest is not money advanced and secured by the mortgage.
I think that, in the context of that proviso, such interpretation is too narrow and unrealistic.
In that connection, I recall a statement by Mr. Justice Oliver Wendell Holmes that, in giving realistic effect to a statute, it is sometimes necessary to allow a little play in the knee.
In Electrical Equipment Co. v. Security National Bank, 606 F.2d 1357 (C.A.D.C. 1979), at page 1362, it is stated that “Interest, after all, is not a windfall but a charge representing the time-use value of money”, and notes with approval the following statement in 1 Glenn on Mortgages § 90 (1943): Lawful interest is part of the bargain that was struck when the loan was made; and it follows that the mortgage secures interest installments as well as principal.
' In this case Strouss obtained its technical priority by jumping the gun to the extent of $143,539, for which he was paid on Application for Payment No. 1. The effect of the opinion of the court is to enable Strouss to have free use of the money with which he purchased materials and paid for labor.
Such result can have detrimental effect on the construction industry by discouraging financial institutions to provide construction loans.