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Foreclosure. Gordon Superior Court. Before Judge Davis.
1. The principal and interest claimed were set out separately in the affidavit for foreclosure of the bill of sale to secure debt; details as to how the interest was calculated are not required.
2. The "face amount of the contract" as referred to in the Georgia Industrial Loan Act is arrived at by the method outlined in Robbins v. Welfare Finance Corp., 95 Ga. App. 90 (96 SE2d 892).
3. Charges made for insurance which the lender is authorized to require under provisions of the Act do not render the loan usurious.
4. Where the judgment was for the principal only, a contention that the makers of the note had not been credited with unearned interest is without merit.
On March 15, 1966, G. A. C. Finance Corporation of Calhoun, Georgia, filed an affidavit to foreclose a chattel mortgage, showing that Louise and Bergen McDonald owed $548.58 principal, $199.18 interest, and $157.44 insurance fees on the secured loan. The note executed by the McDonalds provided that the "total amount due on note" was $984, payable in 24 consecutive monthly installments of $41 beginning October 15, 1965, and bearing interest after maturity at the rate of 8% per annum. The note recited that it was made pursuant to the provisions of the Georgia Industrial Loan Act (Ga. L. 1955, p. 431) and that it should not be construed to contract for or charge a greater amount than allowed by the Act.
Defendants filed an affidavit of illegality admitting the execution of the note and security agreement but showing that the amount of the loan was not $984, as indicated in the note and security agreement, but that plaintiff only loaned defendants the sum of $627.48; that at the time the instruments were executed plaintiff exacted the sum of $135.72 as interest, in addition to "other charges for insurance" which defendants did not need or desire; that the most plaintiff could have exacted as interest was $50.20, and the interest charged is usurious in the sum of $85.52; that the note and security agreement are usurious in that the defendants would be paying an interest rate in excess of 8% per annum because defendants received only $627.48 in money and value as consideration for executing the note and security agreement in the amount of $948; that the security agreement was given to secure a usurious loan and is void under Code Ann. 57-116 and 25-315; that the note has not matured and plaintiff is not giving defendants credit for unearned interest; that the affidavit of foreclosure does not set out the amount of principal and interest separately and for this reason should be dismissed. As relief defendants pray that the note and security agreement be amended and canceled because both are void on account of usury.
In answer to the affidavit of illegality, plaintiff amended by alleging that at the time the loan was made plaintiff was a corporation licensed, operating and doing business under the Georgia Industrial Loan Act of 1955. The trial court rendered judgment in favor of plaintiff without the intervention of a jury for $548.58, the amount of the principal, and defendants appeal.
1. There is no merit in the contention that under Harris v. Usry, 77 Ga. 426, the foreclosure is fatally defective because the principal and interest are not set out separately. The plaintiff's affidavit sets forth $548.58 principal, $199.18 interest to date of the affidavit, $157.44 insurance fees, and future interest at the rate of 8% per annum.
2. Defendants contend that the loan is usurious even if made under and by virtue of the Georgia Industrial Loan Act. The thrust of the argument seems to be that Robins v. Welfare Finance Corp., 95 Ga. App. 90 (96 SE2d 892) should not be followed. We followed and expressly refused to overrule Robbins in Haire v. Allied Finance Co., 99 Ga. App. 649 (109 SE2d 291) and Robertson v. Colonial Discount Co., 106 Ga. App. 274 (126 SE2d 824), and we consider that the matter is closed so far as this court is concerned. Under those authorities, cases not decided under the Act, such as Loganville Banking Co. v. Forrester, 143 Ga. 302 (84 SE 968, LRA 1915D 1195), are inapplicable.
The case at bar differs slightly from Robbins in that the loan involved there was payable in 18 monthly installments, thus calling into play that portion of 15 (a) of the Act (Ga. L. 1955, pp. 431, 440; Code Ann. 25-315 (a)) which provides that "[o]n loan contracts repayable in 18 months or less, the interest may be discounted in advance . . ." Hence in Robbins the contention was rejected that the loan was usurious because the "face amount of the contract" upon which 8% interest per annum was calculated included not only insurance premiums and fees which were themselves calculated on the "face amount of the contract," but also included already discounted interest.
In the case at bar the requirement of 15 (a) of the Act is that "on contracts repayable over a greater period [than 18 months], the interest shall be added to the principal amount of the loan." The affidavit of illegality shows that the amount of interest charged was $135.72, which, when subtracted from the "face amount of the contract," leaves a balance of $848.28 composed of the $027.48 cash received by defendants and the insurance premiums and fees authorized by 15 (i)) and 15 (e) of the Act (Ga. L. 1955, pp. 431, 440-442 as amended; Code Ann. 25-315 (1)), (c)). Under Robbins, we take this balance of $848.28 to be the "principal amount" of the loan upon which interest may be computed rather than the $627.48 cash actually received by defendants, and interest of 8% per annum on this amount calculated over the 24-month period is $135.72 to the penny. Hence no usury appears.
3. It does not appear from the record that the insurance involved in the loan does not conform to the requirements of 15 (c) of the Act (Code Ann. 25-315 (c)). Accordingly the "other charges for insurance" do not render the loan usurious.
4. Nor does it appear from the record that defendants were not given credit for unearned interest. There was no judgment for interest and fees but only for $548.58 principal. Moreover this point is not argued in the brief, and it is treated as abandoned.
John D. Edge, for appellants.
Friday May 22 19:31 EDT

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