Carter v. Warde Capital Corp.

SILAK, Judge,

dissenting:

I respectfully dissent from the majority opinion. In Bjornstad v. Perry, supra, 92 Idaho at 405, 443 P.2d at 1002, cited above, the Supreme Court stated:

Under certain circumstances, such as where usury is eliminated from the transaction by agreement of the parties before the issue is submitted for judgment of the court, the transaction may be purged of usury. Sanford v. Kunz, 9 Idaho 29, 71 P. 612 (1903). However, the court cannot reform the transaction after an action has been brought to enforce the contract and the claim of usury has been interposed. Brown v. Home Credit Co., 137 So.2d 887 (2d Dist.Ct.App., Fla. 1962), cert discharged, Home Credit Co. v. Brown, 148 So.2d 257 (Fla.1962); Person v. Mattson, 33 N.D. 49, 156 N.W. 780, Ann.Cas.1918A 747 (1916).

In this case, the non-usurious interest rate was stipulated to by the parties after the action was brought. Under the rule cited above, the usurious interest rate may not be purged and the contract reformed by the court after the commencement of the *728action. Ronen v. Teer, supra, is distinguishable from this case, and does not violate the rule stated in Bjomstad, because in Ronen the parties entered into the second agreement which purged the usurious interest rate from their transaction before the action was commenced.

I would affirm the judgment of the district court.