622 S.W.2d 255 | Mo. Ct. App. | 1981
Plaintiffs, James A. and Mary L. Redd alleged the execution of separate agreements which exacted interest in excess of the maximum allowed by § 408.030 with each of the following defendants:
The record shows plaintiffs were active debtors: Plaintiff entered into an agreement with defendant HFC, on May 24, 1974, which financed $2,033.69 and provided for a 16.349 “annual percentage rate.” On
I
Plaintiffs contend the trial court erred in sustaining the motions to dismiss made by defendants Nationwide, Chippewa and Preferred because the contracts entered into between plaintiffs and these defendants were usurious as they required the payment of interest in excess of that allowed by § 408.030. We do not agree. In Missouri it is well accepted that usury is the taking or exacting of interest at a rate in excess of that allowed by law for the loan or use of money. Wyatt v. Commercial Credit Corp., 341 S.W.2d 348, 351 (Mo.App.1960). It is equally well accepted that § 408.030, Missouri’s usury statute, applies only to a loan of money and has no application to the bona fide sale of goods. Woods v. Evans Products Co., 574 S.W.2d 488, 491 (Mo.App.1978). Thus, it has been oft held that a seller can demand a higher price for goods sold on an installment basis over time than for the same product sold for cash. General Motors Acceptance Corp. v. Weinrich, 218 Mo.App. 68, 262 S.W. 425, 428-429 (1924). Plaintiffs acknowledge that in deciding whether a contract is a loan or retail credit sale “the contents of the document itself will determine its status.” A cursory examination of plaintiffs’ petition, which included copies of the contracts in question, reveals that the agreements which were assigned to defendants are bona fide installment sale contracts. In each of the complained of transactions plaintiffs desired to purchase items of personal property. To effectuate each of the purchases plaintiffs executed a retail installment contract and a security agreement. In each case the installment contract clearly set out the: cash price, finance charge,
II
Plaintiffs also contend the trial court erred in dismissing their claims of usury against defendants HFC and Franklin. We do not agree. Plaintiffs failed to state a claim against these defendants because the loans here in question were made pursuant to § 408.100 through 408.220, commonly known as the Small Loan Act. Specifically, the interest on each loan was computed in accordance with § 408.200. Plaintiffs urge us to interpret the Small Loan Act in a manner which would prohibit its application to loans in excess of $500. Such an interpretation would mean that the HFC and Franklin loans could not be within the Small Loan Act as both were for amounts which exceeded $500. We believe such a construction would fly in the face of the statute’s plain language. Plaintiffs correctly point out that § 408.100 authorizes lenders to charge interest not exceeding 2.218% on certain loans of $500 or less. Reading the first sentence of § 408.200(1)
Ill
Plaintiffs next contend the trial court erred in dismissing their claim that all defendants conspired to charge interest in excess of that permitted under § 408.030. We do not agree. As discussed above plaintiffs failed to establish that any defendant
IV
Plaintiffs’ final contention is that the trial court erred in sustaining all defendants’ motions to dismiss plaintiffs’ claims for punitive damages. As demonstrated in parts I, II and III of this opinion plaintiffs’ claims for actual damages were properly dismissed. Thus, punitive damages could not possibly be awarded. Koenig v. Skaggs, 400 S.W.2d 63, 68 (Mo.1966).
Affirmed.
. Statutory references are to RSMo 1978. § 408.030 provides that “parties may agree, in writing, for payment of interest, not exceeding ten percent per annum, on money due or to become due upon any contract.”
.Federal Reserve Board Regulation Z (hereinafter “Reg. Z”), 12 C.F.R. § 226.4 (1980) defines finance charge as the “sum of all charges, payable directly or indirectly by the customer and imposed directly or indirectly by the creditor as an incident to or as a condition of the extension of credit_”
This definition includes the total of all costs expressed in dollars and cents that the customer is required to pay to obtain credit. The finance charge is not limited to interest but includes transaction charges, carrying charges, service charges, time price differential, loan fees, finders fees, investigation of credit report fees, and any amounts payable as a discount.
Taylor, Missouri and Federal Credit Disclosures-Coexistence, 35 Mo.L.Rev. 382, 384 (1970).
. The deferred payment price is basically the cash price, plus the finance charge, plus any other charges to the buyer, such as credit life insurance.
. Regulation Z, 12 C.F.R. § 226.5 (1980) basically defines the annual percentage rate to be the ratio of the finance charge which is applicable to the unpaid balance. “Thus, the annual
. “[N]o lender shall permit any borrower to be indebted to such lender on two or more contracts at any time for the purpose or with the result of contracting for or receiving the interest permitted by section 408.100 on more than five hundred dollars of principal (excluding interest).”
. It shall be lawful for a lender to lend at the same or different times to the same borrower five hundred dollars or less under and at the rates permitted by section 408.100 and additional amounts at not more than ten percent per annum even though such additional amounts bring the aggregate amount outstanding to an amount in excess of five hundred dollars and whether such loan or loans be evidenced by one or more than one note or loan contract. When both aggregate principal amount outstanding exceeds five hundred dollars and is evidenced by one note or loan contract, it shall be treated as one loan and interest may be computed at the rates permitted under section 408.100 on that part of the unpaid principal balance of the total indebtedness not exceeding five hundred dollars and at no more than ten percent per annum on any remainder of such unpaid principal balance.