Pacific Finance Corp. v. Lauman

PRESTON (H. L.), J.,

pro tem.

This is an appeal by the defendants from a judgment in favor of plaintiff in two actions originally commenced on the same guaranty. The cases were consolidated and tried by the court together.

The defendants and appellants, on May 23, 1923, guaranteed to respondent, Pacific Finance Corporation, the payment of all moneys due, or to become due, from the Wilshire Motor Company. The complaint in both cases states a cause of action on this written guaranty. The Wilshire Motor Company sold automobiles to purchasers on time, under conditional sales contracts. Some thirty or forty of these contracts were assigned by the Wilshire Motor Company to respondent Pacific Finance Corporation, by separate assignments made at different times, each of which provided that the Wilshire Motor Company guaranteed the payment, by the purchaser of the automobile, of all moneys due, and to become due, under the conditional sales contract. In thirty or forty cases the purchaser of the automobile defaulted in his payments. In these cases the respondent, Pacific Finance Corporation, repossessed the automobiles and sold the same pursuant to the terms of the various assignments. The automobiles did not sell for enough to pay out the original contracts. The Wilshire Motor Company refused to pay the deficiencies, and respondent commenced this action against appellants, the original guarantors of the Wilshire Motor Company, and recovered a judgment for the total deficiencies remaining due under said conditional sales contracts.

Appellants pleaded in their answer and now contend that each one of the conditional sales contracts between Wilshire Motor Company and the purchaser is usurious, under the California Usury Law (Stats. 1919, p. lxxxiii). The trial court found that there was no usury in any of these con

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ditional sales contracts. One of the contracts in question, actually executed with all the terms and conditions, was introduced in evidence, and it was stipulated that if this contract was usurious, all of the other thirty or forty were also usurious. Therefore, we will consider the case as if this was the only contract involved. The contract in evidence recites delivery of the automobile to the purchaser at the time the contract was executed. No interest is provided for in the contract. It provides: “The seller hereby agrees to sell, and the purchaser agrees to buy, the following described personal property . . . for the sum of $532.24, gold coin of the United States of America of the present standard, payable as follows: $190.00 upon the signing of this contract, receipt of which is hereby acknowledged, and the balance as follows: $28.57 on January 2, 1924; $28.57 on February 2, 1924; $28.57 on March 2, 1924; $28.57 on April 2, 1924; $28.57 on May 2, 1924; $28.57 on June 2, 1924; $28.57 on July 2, 1924; $28.57 on August 2, 1924; $28.57 on September 2, 1924; $28.57 on October 2, 1924; $28.57 on November 2, 1924; $28.57 on December 2, 1924.” In other words, the contract entered into provides for the sale of the automobile for the sum of $532.84, payable $190 in cash, and the balance, in the sum of $342.84, payable in twelve monthly installments of $28.57 each. On the reverse side of the conditional sales contract is found what is termed “Dealer’s Statement,” which was filled out by Wilshire Motor Company, and which designates the purchase price of $532.84 as the “time selling price,” and recites that $475 is the “cash selling price,” and shows the method used by the dealer in fixing the “time selling price.”