Court Opinion

ID: 3384458
Source: CourtListenerOpinion
Date Created: 2016-07-05 18:37:07.622209+00
Date Added: 2024-06-11T14:02:41.030118
License: Public Domain

The statutes provide that it shall be usury and unlawful to receive, charge or take for any loan of money, a rate of interest greater than ten per cent. per annum by any device whatever whereby the debtor is required or obligated to pay a sum of money greater than the actual principal sum received, together with interest at the rate of ten per cent. per annum; and that any person wilfully violating such provision shall forfeit the entire interest so charged or contracted to be charged or reserved; and that when said usurious interest is taken or reserved or has been paid, the lender shall forfeit double the amount of interest so reserved, taken or exacted; and that any one who shall wilfully and knowingly charge or accept any sum of money greater than the sum of money loaned and an additional sum of money equal to twenty-five per cent. per annum upon the principal sum loaned, shall forfeit the entire sum, both the principal and interest, to the party charged such usurious interest, and shall be deemed guilty *Page 151 
of a misdemeanor, Section 6938 (4851), 6936 (4852), 6942 (4855) Compiled General Laws, 1927.
The note and mortgage deed taken together constitute the loan contract. Both the note and the mortgage deed require the borrower to pay in three years $14,000.00 with interest at 8 per cent per annum, payable semi-annually; and that "deferred principal and interest payments shall bear interest from maturity at ten per cent." The mortgage deed also provides that if any payment be not promptly made within 30 days after it is due,
  "the said aggregate sum mentioned in said promissory note(s) and this deed, or either, are not fully performed, complied with and abided by, the said aggregate sum mentioned in said promissory note(s) shall become due and payable forthwith or thereafter, at the option of the Trustee, as fully and completely as if the said aggregate sum of Fourteen Thousand Dollars or such unpaid balance thereof was originally stipulated to be paid on such day of default or breach, anything in said promissory note(s) or in this deed to the contrary notwithstanding, and the equity or redemption of the Mortgagor(s) may thereupon be immediately foreclosed."
Thus the loan contract makes the period of the loan three years or a less time if the borrower defaults, and requires the payment of $14,000.00 with interest thereon at 8 per cent. per annum, and 10 per cent. interest on deferred payments, though the amount actually loaned was not over $11,500.00. Since the loan contract makes the principal due and payable thirty days after the borrower's default at the option of the trustee, upon suit for foreclosure the amounts recoverable should be determined as of the date of the foreclosure decree.
Under the terms of the note and mortgage deed dated December 17, 1926, the amounts that were charged in the note and mortgage deed, are $14,000.00 principal and 8 per cent. per annum interest thereon, together with 10 per cent. interest on deferred interest payments, making approximately *Page 152 
$3,168.28 interest, plus $14,000.00, the principal stated in the note, making an aggregate charged in the note of $17,168.28, from the date of the note to the date of the decree, April 9, 1929.
The sum of money loaned, not deducting the broker's commission of $465.28 which the chancellor held should be paid by the borrower, was $11,500.00 upon which interest at the rate of 25 per cent. per annum from December 17, 1926, to April 9, 1929, would approximately be $6,632.56, plus the principal loaned, $11,500.00, making a total of $18,132.56. At 10 per cent. per annum the amount of interest on $11,500.00 to April 9, 1929, the date of decree is approximately $2,655.80, which, plus the principal sum loaned, $11,500.00, equals $14,155.00. This shows that the amounts of principal and interest charged by the loan contract, in making the principal stated in the note $14,000.00 instead of $11,500.00 the amount loaned, is $17,168.28 or more than the amount loaned plus ten per cent. per annum thereon, viz: $14,155.00, to the date of the decree, but less than the amount loaned and 25 per cent. per annum thereon, viz: $18,132.56 to the date of the decree. The forfeiture therefore, under the statute is of all the interest on the amount loaned,
As $2,500.00 was taken or reserved as a bonus when the loan note was made for $14,000.00 instead of $11,500.00, the actual sum loaned, and as this amount so taken or reserved made the contract to pay $14,000.00 with 8 per cent. per annum, interest thereon, usurious, the statute provides that the lender "shall forfeit double the amount of the interest so reserved, taken or exacted." The lender also was paid $85.00 of usurious interest, so double that amount is also forfeited to the borrower. This makes the lender forfeit to the borrower twice the amount reserved, viz: $2,500.00 or $5,000.00 and twice $85.00 interest collected, to be deducted from the $11,500.00 loaned, in addition to the *Page 153 
interest on the amount loaned which is made usurious by the $2,500 bonus retained when the note for $14,000.00 instead of for $11,500.00 was exacted. The decree, therefore, should be for $11,500.00 less $5,000.00 and less $170.00, which is $6,330.00 and a reasonable attorney fee having reference to the amount of the decree.
Reversed for appropriate proceedings.
BUFORD, C.J., AND ELLIS AND DAVIS, J.J., concur.
TERRELL AND BROWN, J.J., dissent.