South Georgia Mercantile Co. v. Lance , 143 Ga. 530 ( 1915 )

Hill, J.

1. (a) The act of 1912 (Acts 1912, p. 144) is not unconstitutional as being a special law on the ground that provi.sion had been made on the subject covered by the act by reason of an existing general law. Section 1 of the act provides: “That any persons, natural or artificial in this State, lending money, to be paid back in monthly installments, may charge interest thereon at six per cent, per annum or less, for the entire period of'the loan, aggregating the principal and interest for,the entire period of the loan, and dividing the same into monthly installments, and may take security therefor by mortgage with waiver of exemption, or title, or both, upon and to real estate or personal property or both, and the same shall be valid for the amount of the principal and interest charged, and such contracts shall not be held usurious.” We hold that the act of 1912 is not a special law. From its terms it is plain that the legislature meant that it should apply to all persons, natural and artificial, and to all territory that the old interest laws passed prior to 1912 covered. It does not apply solely to special persons or places, but is as general in its operation as the old law on the subject of interest. In the Dottenheim case 107 Ga. 606 (34 S. E. 217), a law somewhat similar to the act of 1912, and which limited its operations to corporations of a certain class, was held by a majority of this court to be constitutional. It was held in that ease that the legislature had the right to classify building and loan associations and savings associations, and that the law was a general rather than a special one, for the reason that it had uniform operation throughout the State and affected all persons coming within the terms of the act. The instant case is stronger in its facts than the Doitenheim case. Here “any persons, natural or artificial in this State, lending money to be paid back in monthly installments, may charge interest thereon at six per cent, per annum or less,” etc. This language is broad enough to embrace all persons lending money in this State and who comply with the terms of the act. It is therefore not repugnant to that clause of the constitution which declares that “Laws of a general nature shall have uniform operation throughout the State, and no special law shall be enacted in any case for which provision has been made by an existing general law.” Civil Code, § 6391.

(6) The title to the act of 1912 (Acts 1912, p. 144) is as follows : “An act to authorize any person lending money to be repaid on the installment plan to aggregate the principal and interest for the entire period of the loan at not exceeding six per cent, per annum for the entire time, and to take security therefor by mortgage, or title, or both, and to make such security valid, and such contracts not usurious, and for other purposes.” This title is sufficiently comprehensive to include and cover that portion of the act which authorizes the lender to aggregate the principal and interest for the entire period of the loan, and to divide the loan into monthly installments. The words “installment” and “installment plan” have a definite meaning. It is true the caption of the act uses the words “installment plan,” and the body of the act employs the phrase “monthly installments,” but “installment plan” embraces-the words “monthly installments.” See Bouvier’s Law Diet. (3,d Revision), “Installments;” 2 Words & Phrases (2d Series), 1106, “Installment.” The act under review is not violative of article 3, section. 7, paragraph 8, of the constitution of Georgia (Civil Code, § 6437), on the ground that it contains matter different from that expressed in the title, and that the title is too indefinite to indicate the matters contained in the body of the act.

(c) The act of 1912 (Acts 1912, p. 144), properly construed, is applicable to all persons whether resident in this State or not, and is not unconstitutional as being obnoxious to article 4, section 2, paragraph 1,' of the constitution of the United States, on the ground that it denies to citizens of other States the right to lend money in this State, to be paid back in monthly installments, where interest is charged at the rate of six per cent. per. annum ór less for the entire period of the loan, and where the principal and interest for the entire period of the loan are aggregated and divided into monthly installments.

2. The remaining questions, as propounded by the Court of Appeals, need not be taken up and discussed and answered seriatim. Underlying these propositions is the question of whether or not, upon the defendant’s failure to make three successive payments of installments, the plaintiff could sue for the recovery of the principal of the loan, with interest thereon, or whether it was confined to suing for past installments. We hold that under the terms of the contract, upon the failure to make the three successive payments, the plaintiff was authorized to sue for the recovery of the principal of the loan, with interest thereon. In addition to this proposition, two of the questions of the Court of Appeals present alternative methods of calculation, and inquire whether the plaintiff could proceed upon one or the other bases thus set out, at the same time that it could proceed to recover the principal and interest. We need not take up these questions separately and discuss them, because neither one of them sets out a correct basis on which the plaintiff could recover. Each of them involves an allowance of twelve per cent, interest, which is unlawful and which the plaintiff could not recover; and neither one of them presents a correct, method of calculating the amount which the plaintiff could sue for and recover. What it could sue for was the amount of the loan, to wit, $1,000, with the legal interest thereon from the date of the loan, crediting the payment made as a partial payment as of the date when it was made. This substantially answers all of the questions put.

The plaintiff elected to proceed for the principal and interest upon the loan as provided by the contract. It is immaterial whether it could have sued for past' unpaid installments or not, or could have waited until the end of the sixty months and then brought suit. It was not obliged to sue for past-due installments, alone; it had the option under the contract to sue for the principal of the loan, with interest thereon. It'elected to pursue that remedy. In doing so, it of course abandoned any other possible remedies it might have had; and it is useless for us to discuss whether or not it might have proceedéd in some other manner. It could proceed, and elected to proceed, for the recovery of the loan and interest thereon; and although in attempting to exercise this remedy it sought to make the calculation on a twelve per cent, basis, which was unlawful, this did not prevent it from proceeding for the principal of the loan, with legal interest thereon from the time that it was made, and allowing credit as a partial payment for the amount which was paid.

The court did not err in sustaining the first, second, fifth, and sixth grounds of the demurrer in so far "as they raise the question that the plaintiff could not sue for the principal and interest set forth in the first paragraph of the petition, stating such principal as $1,028.35, together with interest thereon at the rate of twelve per cent, per annum from the date when it is therein alleged that the petition was filed. The correct basis of the suit has been indicated above. It is evident that the first paragraph of the petition was based on a calculation involving a twelve per cent, basis, and, as already held, this was not a proper basis. This is made more clear because the principal sum is thus fixed at a greater amount than the original loan, and the principal was thus increased by reason of the erroneous basis used in the calculation. The court allowed an opportunity to amend so as to correct the erroneous amounts thus sued for; and there was no error in sustaining these grounds of demurrer, with the privilege of amendment.

Also, the court correctly overruled the fourth ground of the demurrer, which was to the effect that the plaintiff was authorized to sue only for the monthly installments which were past due, as the act upon which the contract was based does not provide that upon the non-payment of one or more installments the loan shall mature. We have seen that the contract provided that it should be satisfied if the borrower paid certain installments. In case three of these installments should not be paid after the same became due, it authorized the lender to proceed, not upon the basis of this installment plan at all, but to abandon it altogether and simply proceed to recover the amount of the loan, with interest thereon. No notes appear to have been given for the installments, but the contract simply provided two methods of operation. The lender was not confined to the installment basis, but, upon the failure to pay three of the installments, it had the privilege to disregard that basis altogether and proceed on the basis of a straight loan, with interest thereon, and with a proper credit for what might have been paid; and we have seen that it exercised this option.

This substantially answers all the questions propounded by the Court of Appeals.

All the Justices concur.