Sales - Credit Sales - Application of Usury Statute
Plaintiff bought a tractor from defendant's agent for $2950 and received a trade-in allowance of $1180, leaving an unpaid balance of $1770. Defendant's agent agreed to arrange for a loan from defendant for the balance of the purchase price, without stating a time price for the tractor different from the cash price previously discussed. The loan was made, and plaintiff signed a note and chattel mortgage in the amount of $2161.84, payable in two annual installments. The $391.84 excess over the balance due exceeded the maximum legal rate of interest allowed by Nebraska's Installment Loan Act. Plaintiff later sued in equity, and the court cancelled the promissory note and chattel mortgage. Judgment was awarded plaintiff for all payments made on the note on the ground that the loan was usurious and therefore void. On appeal to the Supreme Court of Nebraska, held, affirmed. The transaction was not a good faith time sale, but a device to avoid the operation of the usury statutes, and the note and chattel mortgage were void from their inception. Curtis v. Securities Acceptance Corp., (Neb. 1958) 91 N.W. (2d) 19.