Commercial Credit Co. v. Shelton , 139 Miss. 132 ( 1925 )

^* Headnote 1. Usury, 39 Cyc., p. 927. The appellee, Shelton, purchased from Young Son, automobile dealers, a Willys-Knight automobile, of which the factory list price was one thousand two hundred and thirty-five dollars, the delivered cash price, including freight and war tax, was one thousand four hundred and thirty-five dollars, and the time selling price one thousand five hundred and forty-three dollars, of which he paid five hundred fourteen dollars and thirty-four cents cash, and executed his note for one thousand twenty-eight dollars and sixty-six cents, payable in twelve monthly installments, eleven of them being eighty-five dollars and seventy-three cents each, and one for eighty-five dollars and sixty-three cents. The title to the car was reserved in the seller until the note was fully paid. The installments were to bear eight per cent. interest after maturity. Provision was made for assignment of the contract and note. The contract was signed and acknowledged by Shelton. Upon entering into this contract and making one cash payment of five hundred fourteen dollars and thirty-four cents and executing the note, the automobile here involved was delivered to Shelton.

Before making the purchase Shelton was advised that the dealer had a cash price and a time or credit price, and he was given the option as to which he would pay, and he elected to buy on the time or credit price of one thousand five hundred and forty-three dollars.

The note was assigned to the appellant, Commercial Credit Company, of New Orleans, for which it paid nine hundred twenty dollars and forty-four cents cash to Young Son. Thus appellant deducted one hundred and eight dollars from the face of the note. Appellee, Shelton, paid several hundred dollars on the indebtedness, but later failed to pay three installments due on the note, whereupon this suit was filed against him by the appellant to recover the balance due; the car being seized under the purchase-money lien statute.

The lower court rendered judgment in favor of the defendant, Shelton, upon the ground that the contract was usurious to the extent of more than twenty-per cent. interest per annum, and therefore void and unenforceable.

The only point presented by the appellee which deserves discussion is whether or not the contract and note given for the automobile was usurious to the extent of more than twenty per cent. per annum, and we shall now discuss and determine that question.

The written contract and the other evidence in the record shows conclusively that Shelton contracted for the automobile with full knowledge of the different prices charged for the machine. The written contract specifies that the list price at the factory was one thousand two hundred and thirty-five dollars the cash selling price, including freight and war tax, was one thousand four hundred and thirty-five dollars, and that one thousand five hundred and forty-three dollars was the credit price, and he was given the option to make the purchase at any one of the prices he desired. He elected to buy the car at the one thousand five hundred and forty-three dollars credit price, and executed the note for one thousand twenty-eight dollars and sixty-six cents which represented the balance due on the car after he had made the cash payment of five hundred fourteen dollars and thirty-four cents.

We have already stated that the note was payable by monthly installments, with interest after maturity. It appears that the one hundred and eight dollars was added to the cash selling price of one thousand four hundred and thirty-five dollars which made the credit price one thousand five hundred and forty-three dollars. This one hundred and eight dollars appears from the contract to have been charged for "extra equipment, if any, plus service, which includes interest, insurance, and handling charges."

The appellee contends in short, that the extra charge of one hundred and eight dollars was for interest on the balance due for the purchase money of the car, and that this interest charge is usurious to the extent of more than twenty per cent. per annum, and therefore vitiates the whole contract, under section 2075, Hemingway's Code.

The opposite contention of the appellant is that the one hundred and eight dollars added to the cash price of one thousand four hundred and thirty-five dollars went to make up the credit price of one thousand five hundred and forty-three dollars which the purchaser, appellee, elected to pay for the automobile, and that, the purchaser having bought the car at the credit price, which he knew was one hundred and eight dollars more than the cash price, the one hundred and eight dollars is not interest, but constitutes part of the credit purchase price for the car.

We think the position of the appellant must be sustained, because it is well settled that a seller may have two prices, one for cash and one on credit, and the difference between the two is not to be considered as a charge of interest.

It is undisputed that the purchaser, appellee, knew that he was buying the car at the credit price, which was one hundred and eight dollars above the cash price. And the fact that the appellant, Commercial Credit Company, purchased the note against the appellee at one hundred and eight dollars less than its face value cannot affect the validity of the note, because, as we understand the case, the added charge by the seller was not an interest charge, but was part of the credit price for which the car was sold. Therefore we conclude the note involved in this case was valid, and the appellant has a right of recovery thereon.

Counsel for the appellee says in his brief: "These concerns take advantage of the desire of poor people who really cannot afford automobiles to have one, and hold out to them the bait of a cash and credit price, and the suckers bite."

We shall not take issue with counsel on this statement, and would add thereto that there seems to have been a large increase in the population of the country since the time when the sage proclaimed that "a sucker is born every minute." However, the court must enforce contracts made between parties, even though one of the parties has been unwise in entering therein.

Therefore the judgment of the lower court is reversed and judgment given here for appellant.

Reversed, and judgment for appellant.