Gregg v. Phillips , 105 Cal. App. 132 ( 1930 )

Plaintiff sued to recover the sum of $9,000 claimed due on a promissory note. She had judgment for $5,000, without interest, from which defendants appeal upon typewritten transcripts.

The defense to the complaint was that the note was usurious. The evidence showed that but $5,000 was actually loaned to defendants and that the sum of $4,000 was a bonus or interest for the loan. Plaintiff waived claim to the sum of $4,000 and interest and asked for judgment for the principal sum alone.

[1] The appeal is grounded on the assertion that because the transaction called for a usurious bonus and interest the entire note evidencing the debt for the principal sum was void and uncollectible. The point is without merit. The Usury Law enacted by the electors (Stats. 1919, p. lxxxiii) provides that any agreement calling for a greater return than that permitted by the act "shall be null and void as to any agreement or stipulation — to pay interest and no action at law to recover interest in any sum shall be maintained. . . ."

It will be noted that the act quoted above does not declare the note void, but only the portion of the agreement or contract as to the payment of interest shall be null and void. This is in harmony with all the decisions in this state on the subject. (Haines v. Commercial Mortgage Co., 200 Cal. 609, 622 [53 A.L.R. 725, 254 P. 956, 255 P. 805]; Davis v. Westphal,102 Cal.App. 148 [282 P. 800, 801].)

Judgment affirmed.

Sturtevant, J., and Burroughs, J., pro tem., concurred.