Bell v. Loosier of Albany, Inc.

Quillian, Judge,

dissenting.

I dissent from Division 1 of the majority opinion. The acceleration clause in this contract is similar to those condemned in Lawrimore v. Sun Fin. Co., 131 Ga. App. 96 (205 SE2d 110); affirmed Sun Finance Co. v. Lawrimore, 232 Ga. 637 (208 SE2d 454); Hardy v. G. A. C. Fin. Corp., 131 Ga. App. 282 (205 SE2d 526); affirmed G. A. C. Fin. Corp. v. Hardy, 232 Ga. 632 (208 SE2d 453); Frazier v. Courtesy Finance Co., 132 Ga. App. 365 (208 SE2d 175). Those actions were brought under the Industrial Loan Act, Code Ann. Ch. 25-3 (Ga. L. 1955, pp. 431 et seq.). This *61action was brought under the Retail Instalment and Home Solicitation Sales Act (hereinafter referred to as Retail Instalment Act), Code Ann. Ch. 96-9 (Ga. L. 1967, pp. 659 et seq.). The Industrial Loan Act provides that the licensee shall not "[c]harge, contract for, receive and collect interest at a rate not to exceed” a stated amount. (Emphasis supplied.) The Retail Instalment Act’s corollary provision states "the seller. . .may charge, receive and collect a time price differential, which shall not exceed” rates set forth in the statute. (Emphasis supplied.)

Both Acts prohibit charging an amount in excess of the stated maximum amount, but the Retail Instalment Act does not proscribe "contracting” for an amount in excess of the stated amount. I find the legislative intent clearly evidenced in its use of the terminology prohibiting the licensee or seller to "charge” any amount in excess of the rates set forth in the Acts. To state the same principle conversely, no one would contend that it was the intent of the legislature to permit licensees or sellers to charge customers in excess of those rates stated in the Acts.

The reason for my divergence from the majority opinion is that the clause used in this contract permits sellers to "charge” amounts in excess of those in the statute because it permits the maximum finance charge and then contracts for acceleration of payment of the "entire amount of the purchaser’s indebtedness” remaining due in the event of default. The seller in this contract interpreted this clause to mean the remainder of the face amount of the note was due. I contend he was correct in his interpretation.

I do not believe my difference with the majority lies in legal semantics over the word "charge.” Black’s Law Dictionary defines "charge”as — "to claim, to demand; to accuse...” If a contract, as here, states that the purchaser owes the excess amount, and a collection agent of the seller attempts to collect the excess amount, and the seller’s attorney sues the purchaser for the excess amount — I contend that the seller has charged that purchaser the excess amount. If these acts do not amount to charging that excess amount, what act does it take to "charge” an excess amount? The Retail Instalment Act prohibits *62charging the excess amount, thus we had a violation of the Act.

In the instant case plaintiff’s employees invoked the acceleration clause and demanded of defendant — thus charging her, the total amount remaining due on the face of the note which included unearned interest as the contract had not run its full contractual period. Plaintiffs complaint — when first filed, alleged that the "balance owing on these contracts, due, demanded and unpaid” was an amount which included unearned interest. (Emphasis supplied.) Defendant’s answer pointed out the amount charged and demanded contained no pro rata rebate for unearned interest. Plaintiff amended and charged the lesser amount. The majority opinion finds no fault with this procedure. Herein lies our difference. The majority opinion provides legal sanction for a contractual procedure which permits sellers to charge, demand payment of, and sue for an amount which is in excess of that permitted by statute. If at any point the seller is caught charging the excess amount, he may reduce it to the legal maximum and continue to press his claim. Even if suit is filed for this usurious amount, the majority opinion holds that if the defendant’s answer brings this to the court’s attention, the plaintiff may amend and erase the violation of the statute as if defendant had never been charged the excessive amount.

It is all too easy to fall back upon the hoary legalism of "caveat emptor.” But, is any purchaser sufficiently aware that improper acceleration of unearned interest is impermissible. Here the purchaser’s lawyer invoked the purchaser’s right to have the penalty provision applied to the seller who charged the excess amount. Apparently, invoking the purchaser’s right in court results only in amendment of the pleading.

The majority relies upon Lewis v. Termplan, Inc., Bolton, 124 Ga. App. 507, supra, and Lawrimore v. Sun Finance Co., 131 Ga. App. 96, supra. I find the wording of Lewis and Lawrimore to support my position. In Lewis the court specifically held that"the election to exercise such a provision as a means of collecting unearned interest plus other interest thereon constitutes usury ...” 124 Ga. App. p. 507. (Emphasis supplied.) In Lawrimore the court held *63that "when the plaintiff opted to accelerate and claim unearned interest on the otherwise unmatured instalments. . .this amount was usurious...” 131 Ga. App. p. 96. (Emphasis supplied.) The majority opinion did not discuss the decision of this court in Reese v. Termplan, Inc., Bolton, 125 Ga. App. 473 (188 SE2d 177) which held that when the maximum finance charge is charged and the seller uses an acceleration clause under the Retail Instalment Act, "[t]o accelerate the entire unpaid balance as due long before the time provided in the contract obviously discloses a claim exceeding the maximum finance charge . . .” 125 Ga. App. p. 475. I find Reese correctly states the law.

I would hold that the seller violated the provisions of Code Ann. § 96-903 (d) and invoke the penalties of Code Ann. § 96-910 (b).

I am authorized to state that Judge Stolz concurs in this dissent.