Court Opinion

ID: 7440261
Source: CourtListenerOpinion
Date Created: 2022-07-29 03:04:31.278404+00
Date Added: 2024-06-11T16:22:34.857818
License: Public Domain

MILLER, Judge.
When the holder of a promissory note accelerates the maturity thereof, causing the unpaid balance to be due and owing, the holder must make a pro-rata rebate of the unearned capitalized interest contained in that accelerated amount. Berger v. DeSalvo, 156 So.2d 323 (La.App. 4 Cir. 1963). This rule should apply where the finance company refinances a loan.
The rule of Consolidated Loans, Inc. v. Smith, 190 So.2d 522 (La.App. 1 Cir. 1966) relied on by the majority should not be extended. There the maker voluntarily made a cash prepayment of the entire unpaid balance due and owing.
No donative intent has been shown on the part of the borrower when he refinances his loan. It is unrealistic to conclude that by refinancing, the borrower intended to donate unearned interest and advance insurance payments to the finance company. I find this unjust enrichment at the expense of a man, representative of a class of many, who can ill afford to support such practices.
I would grant the application for rehearing.