Cissna Loan Co. v. Gawley

Citations

• 87 Wash. 438

Syllabus

<p>Usury—Evidence—Ulterior Pacts. Ulterior facts are admissible to show that a loan, fair on its face, is usurious, by showing the actual consideration, but the courts will look to the substance of the transaction and not resort to refined theories either for the purpose of sustaining or avoiding it.</p> <p>Usury—Installment Notes—Computation op Interest. An actual loan of $1,605, evidenced by 96 notes calling for monthly payments of $24.80, aggregating $2,380.80, if paid according to its terms, is not usurious, since the payments applied on the loan according to the ordinary rule of partial payments amount to interest at less than the maximum rate of twelve per cent per annum allowed by law.</p> <p>Usury—Acceleratinq Maturity—Liquidated Damages. Stipulations in a contract of loan accelerating maturity in case of default, do not make the loan usurious, even though the contract, if enforced according to the terms of the default, will result in a rate of interest greater than the legal rate; since the excess is regarded as liquidated damages.</p> <p>Usury—Optional Payments—Increased Interest. A stipulation in a contract of loan authorizing the borrower to pay the same before maturity upon paying an advanced rate of interest in excess of the legal rate does not make the loan usurious; since such clause was not enforceable by the lender.</p> <p>Bills and Notes—Penalties — Enforcement — Unconscionable Provisions—Usurious Interest on Default. Where an actual loan of $1,605, evidenced by 96 notes calling for monthly payments of $24.80, aggregating $2,380.80, resulting in interest at the rate of approximately 10.5 per cent if paid according to its terms, was by default accelerated and matured after payment of 24 installments, it would be unconscionable to enforce the contract according to the terms of the default, resulting in the payment of more than twelve per cent interest, the maximum allowed by law; and the just allowance would be 10.5 per cent on the principal sum bot