Lawrimore v. Sun Finance Company., 131 Ga. App. 96, 205 S.E.2d 110 (1973)
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Summary
Judgment reversed. Bell, C. J., Hall, P. J., Deen, Quillian, Evans and Stolz, JJ., concur. Eberhardt, P. J., and Clark, J., dissent.
Summary
Judgment reversed. Bell, C. J., Hall, P. J., Deen, Quillian, Evans and Stolz, JJ., concur. Eberhardt, P. J., and Clark, J., dissent.
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Hansell, Post, Brandon & Dorsey, Allen Post, W. Rhett Tanner, amicus curiae.Arnall, Golden & Gregory, H. Fred Gober for appellee.Alfred C. Kammer II, Lee Payne, for appellant.
This is an appeal by a borrower from the overruling of her motion to set side a judgment rendered against her, by default, in favor of a licensee under the Georgia Industrial Loan Act, made on grounds the loan instrument attached to the pleading was void, and the pleading, therefore, showed on its face that no cause of action existed. The grounds stated were (a) The contract to provide for "interest from maturity at the rate of 8% per annum," and (b) The contract provided for charges in excess of those permitted by the Act in providing that "failure to pay any instalment or other sums when due here under shall, at the option of the holder hereof and without notice, render all instalments due and payable at once." The amount of the note was $2,064, payable in 24 instalments of $86.00 each. The instrument showed the cash advance to be $1,382.80 and added thereto were fees of $106.56, recording fee $1.00, and insurance $288.96 and 2 years interest of $284.68, each $86.00 instalment consisting of principal, etc., and interest which was unaccrued or unearned until the respective instalments became due each month. Held:
1. It was held in Lewis v. Termplan, Inc.,
2. The contract or note here involved contained the following provision: "Any provisions of this instrument prohibited by the laws of this State shall be ineffective to the extent such prohibition without invalidating any other remaining provisions of this instrument." To give this provision of the contract effect would nullify the provision of the statute above quoted and applied, and Section 16 of the Georgia Industrial Loan Act, supra, makes provision for just such an attempt when it provides that "No licensee shall divide into separate parts any contract for the purpose or with the effect of obtaining charges in excess of those authorized by this Act."
3. Having held that the contract is void for the reasons given, it is unnecessary to determine whether it may be void for other reasons.
4. The trial court erred in overruling appellant's motion to set aside the judgment rendered.
EBERHARDT, Presiding Judge, dissenting.
For the following reasons I cannot agree with the conclusion reached in either division of the majority opinion, and must dissent.
1. The items included in this note are only those clearly authorized by the statute, arrived at by the method outlined in Robbins v. Welfare Finance Corp.,
Mitchell,
3. Provisions of the Industrial Loan Act provide for the collection of attorney fees and court costs. Code Ann. 25-316.
4. The petition in this action sought the recovery of an unpaid balance of $850.06 and attorney fees of $127.50. "Unpaid balance" means unpaid balance on the principal. Lanier v. Consolidated Loan & Finance Co.,
The majority, contrary to these rules of construction, proceeds to foresee, in spite of its absence in the record, that the acceleration clause could and might have been, if the lender had so elected, used in violation of the Act. This is wholly unjustified.
The acceleration clause in an industrial loan note has been recognized heretofore in Hartsfield Co. v. Demos,
We regard the holding of the majority opinion to be in conflict with these cases, which stand unreversed and not overruled.
6. Defendant interposed no defense to the suit in the court below, and judgment was entered reciting that "the plaintiff appearing to be entitled to recover of the defendants, judgment is rendered against them in the following sums: Principal $850.06, attorney fee $127.50."
"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." McDonald v. G. A. C. Finance Corp.,
If evidence was introduced before the court on the hearing of appellant's motion to set the judgment aside no transcript thereof has been brought up on this appeal, and the burden is on the party alleging error to show it affirmatively by the record. Where there is nothing in the record to show the claimed error, we must assume that the judgment was fully supported and correctly entered. Shepherd v. Shepherd,
This is true where, as here, the defendant failed to interpose a defense to the action and allowed the matter to go into default, thereby waiving all proof by the plaintiff and entitling it to judgment "as if every item and paragraph of the petition were supported by proper evidence without the intervention of a jury." Code Ann. 81A-155. This applies as to the amount of the unpaid principal of the obligation, and of the giving of the notice to bind the defendants for the payment of the attorney fees.
7. Nothing in this record or the pleadings shows a nonamendable defect appearing "upon the face of the record or pleadings." It cannot be said that the complaint "affirmatively shows that no claim in fact existed." Code Ann. 81A-160 (d). The motion to set aside the judgment was properly denied.
The rule of the majority is rigid and monolithic, disregarding the normal, usual and long-established business practices of people engaged in a lawful business. There is great danger that it will strike down thousands of transactions involving millions of dollars and may inflict a mortal blow upon a useful segment of the economy. This results from the fact that "It has become fashionable to talk of the era of the consumer, and it appears that an increasing number of people, otherwise thought to be of good judgment, have become overcome by some sort of notion that everyone but a consumer must act responsibly." Kock, Commercial Law, 25 Mercer L. R. 49, 53. And the fashion is to look under every rock, comb with a fine tooth comb, place every transaction under an electronic microscope, and find some basis, however minuscule, however lacking in harm, however strained in construction, for declaring void a loan made in good faith by a lawful lender to a borrower, who has utterly failed to repay or keep his obligation, because of a supposed or imagined conflict between the loan instrument and the provisions of the Act.
The judgment should be affirmed.
I am authorized to state that Judge Clark joins in this dissent.
ON MOTION FOR REHEARING.
Appellee contends that the following controlling cases were overlooked by the court in rendering its decision, to wit: McCraty v. Woodard,
Motion for rehearing denied.
1973
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