Opinion
32892.
DECIDED MARCH 9, 1950.
Complaint; from Macon Municipal Court — Judge Feagin. December 5, 1949.
Roy B. Rhodenhiser Jr., for plaintiff in error.
Andrew W. McKenna, contra.
Where the transferee of a conditional-sale contract covering the sale of an automobile collects on a fire insurance policy issued to the vendee and made payable to it as its interest appeared, and applies the proceeds to the payment of eighteen monthly notes, given as a balance of the purchase-price, and bearing interest from maturity, before all of them matured, the vendee is entitled to recover from the transferee the unearned excess of the time price over the cash price of the automobile, such excess to be computed on the basis of the amount paid to the seller in consideration of the transfer of the contract.
DECIDED MARCH 9, 1950.
A. C. Ashley sued Employees Loan Thrift Corporation for $228.40 on a so-called open account. The bill of particulars attached to the petition sets out allegations which have no place in a bill of particulars but which, together with amendments to the petition, set forth the intended cause of action. The bill of particulars alleged: "1. On February 23, 1949, petitioner, A. C. Ashley, purchased a 1946 Ford automobile from Fowler Auto Market. The purchase-price of said automobile was $1295.00. 2. $545.00 of the said purchase-price was paid by petitioner as a down payment by way of a trade-in of one 1939 Chevrolet automobile, which was at that time owned by petitioner, leaving a balance of $750.00 due. 3. At the time of the said purchase petitioner signed the following papers: (a) An application for fire and theft insurance on the said Ford automobile with the Resolute Fire Insurance of Hartford, Connecticut with the policy to be made payable to petitioner. (b) A conditional-sales contract to Fowler Auto Market. (c) A promissory note in the amount of $1072.62 payable in eighteen monthly instalments of $59.59 each, with the first instalment being due on March 30, 1949. 4. The said promissory note was evidence of an indebtedness of $844.22 owed by the petitioner to the said Fowler Auto Market. This amount being $750.00 due as remainder of the purchase-price of said Ford automobile, $92.72 advanced by said Fowler Auto Market as premium of insurance covering said Ford automobile for eighteen months, and $1.50 as fee for recording the contract. 5. The seller, the said Fowler Auto Market then assigned the said note and conditional-sales contract to the Employees Loan Thrift Company, the defendant herein. 6. A policy of fire and theft insurance was issued by said Resolute Fire Insurance Company covering the said Ford automobile from destruction by fire up to the amount of $1165.00, payable to petitioner. The date and the terms of the said policy are unknown to the petitioner but are well known to defendant, as it was the defendant who procured the issuance of said policy and retained it in his possession. 7. The said Ford automobile was almost completely destroyed by fire on or about March 16, 1949, and the defendant, acting under a power of attorney contained in the conditional contract of sale, signed by petitioner, made a settlement with the Resolute Fire Insurance Company and turned over the remains of the said Ford automobile to the said insurance company. 8. In this settlement the defendant received the amount of $1072.62 from the said insurance company and refuses to turn over any part thereof to the petitioner and refuses to account to petitioner for the said amount, although often requested to do so. 9. The defendant is not entitled to any interest on the money loaned to petitioner because defendant knew at the time he purchased said note that it was evidence of an indebtedness of $844.22, and the defendant knew that the said note for the amount of $1072.62 included a charge of usurious interest in the amount of money actually loaned. 10. The defendant is entitled to retain the amount of $844.22 of the $1072.62 collected by him for petitioner but is indebted to petitioner in the amount of $228.40. This amount being the balance of the $1072.62." The plaintiff filed the following amendment: by adding to the petition the following paragraphs: "5. Said conditional-sales contract and promissory note referred to in exhibit `A' is attached to this petition and by reference thereto is made a part of this paragraph and petition. 6. At the time of signing said conditional-sales contract and promissory note the petitioner also signed a retention-title contract to the defendant, Employees Loan Thrift Corporation, which is attached to this petition and by reference thereto is made a part of this petition and paragraph"; by striking from the bill of particulars paragraph 5 in its entirety. A last amendment attached a duplicate bill of sale from Fowler Auto Market to A. C. Ashley. The defendant filed the following demurrers to the petition as amended: generally to the petition because the same sets forth no cause of action and is too vague and indefinite to predicate any liability upon the defendant; specially to the bill of particulars and all paragraphs thereof as the same does not show how and in what manner defendant became liable to the plaintiff and the same is not a copy of an open account as alleged in said petition; specially to paragraph 9 of the bill of particulars in that the same does not properly set forth any allegations relating to a charge of usurious interest on the part of the defendant, nor is said allegation as to the charge of usury properly pleaded elsewhere in the plaintiff's petition. The court overruled the demurrers and the defendant excepted.
1. The form in which the action is brought is a bit unusual but the petition and bill of particulars will be treated as a petition in a unit. It can be ascertained from the two what the contentions of the plaintiff are so as to determine the question whether a cause of action is stated. The demurrers to the form of the action are without merit.
2. The petition stated a cause of action as against the demurrers filed. The conditional-sale contract provided: "I have this 24 day of Feb., 1949, purchased and acknowledged delivery from Fowler's Auto Mkt. of Macon Georgia . . the following described motor vehicle: Ford, 2 Dr. Super Del., 99a-929351, 1946 . . for which I have paid $545.00 down and promise and agree to pay to the seller or his or its order the balance of $1072.62 as the balance of the purchase-price of same, said balance being payable in equal monthly instalments of $59.59 each except the last which is for $59.59, the first payable on the 30 day of March, 1949, and monthly thereafter, with interest on each instalment from maturity at the rate of eight per cent. per annum." The note and contract were transferred to the defendant. The petitioner disclaimed intention that he sought to claim usurious interest and confined his claim to unearned interest. If the insurance was issued to the petitioner and was paid to the defendant it would not be entitled to more than was due on the obligation of the plaintiff at the time of the payment to the defendant by the insurance company. The petitioner is precluded from claiming unearned interest as such by reason of the fact that the contract provides that the note as balance due was for the balance of the purchase-price. The transaction involved a time price and not a cash price plus interest. However, the principle involved is the same. If the defendant had collected the note under a provision for acceleration of its maturity, the plaintiff would be entitled to a credit for the unearned interest if the note included interest. McCrary v. Woodard, 122 Ga. 793 ( 50 S.E. 941); Lyle v. Mandeville Mills, 68 Ga. App. 88 ( 22 S.E.2d 186). The same principle would apply where a time price is charged instead of a cash price plus interest. Of course the presumption that a time price was charged under the facts here would be rebuttable by proof that only a cash price was charged and that no interest was charged on the eighteen deferred payments. The plaintiff would be entitled to the proportion of the excess of the time price over the cash price that the length of time from the date of the note to the time of the payment of the insurance money to the defendant bears to the time covered by the note. As this is a transaction between the transferee of the note and the plaintiff, the amount to which the plaintiff would be entitled must be computed from the amount paid to the seller by the defendant for the contract and note for the reason that any profit on the sale of the note, made by the seller, could not be recovered from the defendant under the contentions in this case. The answer to the question presented is simply that the defendant cannot in equity and good conscience charge the plaintiff interest on the cash price of the automobile for the period of time when he got no benefit from the transaction, whether the carrying charge of the loan was interest or charged as a time price. The payment of the loan cannot, under the facts, be considered on the basis of a voluntary payment. The conclusion is compelled, from the allegations of the petition, that the insurance was issued to the plaintiff with loss clause made payable to defendant. In such case the defendant was authorized to collect the amount due at the time of the payment of the insurance. The facts show in effect a mutual agreement for acceleration of maturity in the event of destruction of the property by fire and brings the case within the principle of the cases cited. The petition does not allege when the loss was paid, but the action was filed before many of the instalments on the note matured. Whether or not the contract was affected with usury under the ruling in Graham v. Lynch, 206 Ga. 301 ( 57 S.E.2d 86), is not a question to be decided on the present record in view of the plaintiff's disclaiming the contention that the contract is usurious.
The court did not err in overruling the demurrers to the petition.
Judgment affirmed. Sutton, C. J., and Worrill, J., concur.