Community Finance Co. v. Lloyd

Pannell, Judge. 1. The Georgia Industrial Loan Act (Ga. L. 1955, p. 431) provides in Section 15 thereof for the maximum rate of charge for loans made by a licensee under the Act {Code Ann. § 25-315). Paragraph (a) of this section is in part as follows: The licensee may “Charge, contract for, receive and collect interest at a rate not to exceed 8 percent per annum of the face amount of the contract, whether repayable in one single payment or repayable in monthly or other periodic installments. On loan contracts repayable in [231] 18 months or less, the interest may be discounted in advance, and on contracts repayable over a greater period, the interest shall be added to the principal amount of the loan.” Section 20 of the Georgia Industrial Loan Act provides that “any loan contract made in violation of this Act shall be null and void.” Code Ann. § 25-9903. See in this connection Securities Investment Co. v. Pearson, 111 Ga. App. 761 (143 SE2d 36); Robinson v. Colonial Discount Co., 106 Ga. App. 274, 275 (126 SE2d 824). Submitted May 2, 1966 Decided September 6, 1966. Paul N. Brown, for appellant. Leon A. Wilson, II, for appellee. 2. Where, as in the present case, in a suit by a licensee under said Act against a borrower the note attached to the petition shows that the loan was for a period of time in excess of 18 months and shows on its face that interest was deducted in advance rather than added to the loan, such deduction resulted in a charge in violation of, and in excess of, the charge authorized in said Act, and the petition seeking a recovery on such a void note was subject to general demurrer. The trial court did not err in sustaining the general demurrer and dismissing the petition. Judgment affirmed. Felton, C. J., and Frankum, J., concur.