Peterson v. NewtonPeterson v. Newton
- Reporters:
- , ,
- Before:
- Banke
The appellee was awarded judgment against the appellant on a promissory note in the amount of $975 principal, $30 interest, and $122.50 attorney fees. The sole issue on appeal is whether the $30 interest charge was usurious. We shall resist the temptation to call this a matter of principle.
The note specified an interest rate of 9.5% per annum. Under the general usury statute in effect at the time, the maximum interest charge allowable was 9% per annum. Code Ann. § 57-101 (as amended through Ga. L. 1975, p. 370). However, the trial court found that the transaction was governed by Code Ann. § 57-101.1 (as amended through Ga. L. 1977, pp. 1221, 1222) which governs interest rates on real estate loans and allows a maximum interest charge of 10%. The note was executed as partial payment of the purchase price of certain real estate but was not secured by any interest in that or any other real estate. Held:
Code Ann. § 57-101.1, as amended at the time the note was executed, applied only to “transactions where the security given [for the loan] is or includes real property or an interest therein...” (Ga. L. 1977, pp. 1221, *8531222). (The language of the current statute in this regard is substantially identical. See Ga. L. 1979, pp. 357, 359 (Code Ann. § 57-101.1(b)(3)).) Since the appellant’s note was not secured by any interest in real estate, the trial court erred in finding it to be governed by § 57-101.1 rather than by § 57-101. The note was accordingly usurious, and all interest on it should have been forfeited pursuant to Code § 57-112.
The judgment of the lower court is affirmed with the direction that the award of $30 interest be stricken therefrom.
Judgment affirmed with direction.
McMurray, P. J., and Underwood, J., concur.