Appellant initiated this suit to recover the total payments of two loans made to appellees. For the purpose of this apрeal, we are concerned only with the loan set forth in Count I of appellant’s complaint. The loan, which was made by appellant as a licensee under the Georgia Industrial Loan Act, was deemed by the trial court to be null and void because it included interest charges in еxcess of those allowable under Georgia law. Code Ann. § 25-9903 (Ga. L. 1955, pp. 431, 444).
1. The Industrial Loan Act authorizes a lender to discount interest in advance on loan contracts which are repayable in eighteen months or less.
Rule No. 120-1-10-02 prоvides that the initial payment on all industrial loans shall become due within forty-five days from the date of the contract and not sooner than the regular installment period. This rule enables the lender to delay the initial repayment on monthly installment loans for approximately fifteen days bеyond what would otherwise be the due date of the first installment. Appellant contends the rule was intended to allow flexibility in setting repayment dates at a time of the month which would avoid conflicts with a borrower’s other financial obligations and, therefore, at appellees’ request the first repayment date was set for April 16, 1978. It was this extension of the due date for the first installment by
Code Ann. § 25-315 (Ga. L. 1975, p. 393), allows the maximum term of an industrial loan to be 36 months and 15 days; therefore, the lеnder may use the flexibility provided by the commissioner’s rule in delaying the initial repayment dates for 36-month loans without exceeding the maximum term allowеd by law. Appellant argues that this fifteen-day period specifically applicable to 36-month loans should apply to 18-month loans as well. Borrowers are not charged interest for the additional days and the initial payment date is generally for their convenience. However, had the legislature meant for the advance discounts of interest to be applicable to loans for 18 months and fifteen days, they most certainly would have written the law in such a manner. This court cannot add language to a statute by judicial decree. State Revenue Commissioner v. Alexander,
The starting point of a loan is the date of execution irrespective of when the first payment is made or when the interest bеgins to run. Abrams, supra. The loan in this case exceeded 18 months and, therefore, the lender could not discount the interest and be in compliance with the plain language of the statute. As a result, the loan included a usurious amount of interest and was “null and void” under the provisions of Code Ann. § 25-9903.
2. Appеllant argues that even if the loan contract is null and void the principal amount of the loan is recoverable pursuant to the ruling in Southern Discount Co. v. Ector,
This court certified the following question to the Supreme Court: “Under the holding of Southern Discount Co. v. Ector,
The Supreme Court answered this question in the affirmative
We conclude that appellant in the present case is entitled to pursue its claim under Count I of its complaint on the thеory of money had and received. However, the amount which appellant claims it is entitled to recover under Count I is disputed by appеllees and remains unresolved. Therefore, as to Count I of appellant’s complaint, the order of the trial court granting summary judgment in favor оf appellees is reversed, but denying summary judgment in favor of appellant is affirmed. Compare Hinsley v. Liberty Loan Corp.,
3. The court certified a second question tо the Supreme Court seeking guidance as to this issue: “If a contract is deemed ‘null and void’ meaning that the principal of the loan is not forfeited but all interest and other charges are forfeited, is a security interest established by that contract valid so as to relieve a lender from liаbility under Code Ann. § 109A-9—404 for its failure to issue a termination statement indicating that a borrower has no outstanding obligation?”
The Supreme Court, referring to Division 2 of Household Finance Corp. v. Raven,
“A loan, null and void as a matter of law, creatеs no ‘outstanding secured obligation,’ whether or not declared to be null and void by order of court.” U. S. Life Credit Corp. v. Johnson, supra at (2).
The order of the trial court awarding damages under Code Ann. § 109A-9—404 is affirmed.
Judgment affirmed in part; reversed in part.
Notes
In determining discount interest the amount of interest is calculated on the amount of the loan and subtracted in advance, giving the borrower the remainder. Thus, the borrower is paying interest calculated on a greater amount of money than the cash he actually receives. “Add on” interest calculates the interest on the amount of cash the borrower actually receives. (Note: These calculations do not take into consideration other fees charged by the lender which may also reduce the amount of cash received by the borrower).