Opinion
52672.
ARGUED SEPTEMBER 14, 1976.
DECIDED OCTOBER 4, 1976. REHEARING DENIED OCTOBER 21, 1976.
Writ of possession. Columbus Municipal Court. Before Judge McCombs.
Elkins Flournoy, James E. Elkins, Jr., for appellant.
Grogan, Jones, Layfield Swearingen, Richard A. Childs, for appellee.
The appellant executed a loan contract with the appellee-finance company; the Georgia Industrial Loan Act controls this transaction. Code Ann. § 25-302 (Ga. L. 1975, p. 393). The loan contract contained the following acceleration clause: "Default in paying any installment may be discussed with any present or future employer and shall, at the option of the holder hereof and without notice or demand, render the entire sum remaining unpaid at once due and payable, less any required refund of interest portion of finance charge." The appellant defaulted on the loan and the appellee filed a petition for writ of possession; the appellant's defense went to the invalidity of the entire contract due to the violation of the Industrial Loan Act by the quoted acceleration clause. The trial judge heard arguments, found that as a matter of law the acceleration clause was not repugnant to the mandate of the Act and granted the writ of possession. This appeal is taken from those actions. We affirm.
ARGUED SEPTEMBER 14, 1976 — DECIDED OCTOBER 4, 1976 — REHEARING DENIED OCTOBER 21, 1976 — CERT. APPLIED FOR.
1. The stated purpose of the Industrial Loan Act is to regulate the business of making loans of $3,000 or less. Code Ann. § 25-302 (Ga. L. 1975, p. 393). To this end, a maximum rate of charge is provided for. Code Ann. § 25-315 (Ga. L. 1975, pp. 393, 394). If the contract provides for a greater rate of charge than that provided for by law, the lender is guilty of usury and the entire loan contract is null and void. Code Ann. § 25-9903.
The cases dealing with the invalidity of acceleration clauses under the Industrial Loan Act are predicated not upon a per se repugnance to the requirements of that Act but rather upon their interpretation as having the usurious effect of allowing a recovery of unearned interest. "... [T]here may be a valid exercise of acceleration provisions where only the principal balance is sought, but to attempt to accelerate the payment of that part of the instalments including unearned interest, even without the attempt to charge additional interest thereon from the date of acceleration, obviously gives a higher interest return on the use of the money than is authorized under the statute, and therefore nullifies the entire transaction." Lewis v. Termplan, Inc., 124 Ga. App. 507, 509 ( 184 S.E.2d 473). To this end, language in acceleration clauses of loan contracts construed or construable as having the usurious effect of accelerating unearned interest has been interpreted as voiding the entire agreement. Lawrimore v. Sun Finance Co., 131 Ga. App. 96 ( 205 S.E.2d 110) ("all installments due and payable"); Allen v. Alco Finance, Inc., 131 Ga. App. 545 ( 206 S.E.2d 547) ("all remaining installments at once due and collectible"); Frazier v. Courtesy Finance Co., 132 Ga. App. 365 ( 208 S.E.2d 175) ("all remaining payments"). That the rationale behind the invalidation of acceleration clauses (and the resultant invalidation of the entire contract as usurious) has been the acceleration of unearned interest is demonstrated in G. A. C. Finance Corp. v. Hardy, 232 Ga. 632 ( 208 S.E.2d 453), affg. 131 Ga. App. 282 ( 205 S.E.2d 526).
2. Having decided that acceleration clauses are not per se invalid but that such clauses allowing the collection of unearned interest are usurious and thus void the entire loan contract, we turn to the interpretation of the clause here in issue.
Language to the effect that default will "render the entire sum remaining at once due and payable" is objectionable as permitting a recovery of unearned interest; when, however, the complementing clause is added, limiting such accelerated sum to this amount "less any required refund of interest..." the usurious objection no longer applies. While it is true in the strictest legal sense that the appellee is not "required" to return interest (nor "refund" it, in that if it is usurious nothing at all can even be collected), it is required not to accelerate unearned interest if it is to protect its recovery of principal and earned interest. There is no doubt that the language the appellee has chosen to effectuate compliance with Lawrimore is not as clear nor as concise as it might be; but the fact remains that it has demonstrated an attempt at compliance with the Industrial Loan Act. In order to construe the language as an attempt to accelerate unearned interest we would have to infer the appellee's intent to circumvent the Act. "An intention contrary to the law should not be read into a contract by placing such a construction upon a provision therein, when the provision is just as susceptible of a construction that will show a lawful intention." Southern Loan Co. v. McDaniel, 50 Ga. App. 285, 286 ( 177 S.E. 834). "... [A]n intention contrary to the law should not be read into a contract; and ... where a particular word or words in a contract are susceptible of two meanings, one of which would uphold the contract and render it legal, and the other would render it inoperative or illegal, that meaning which renders the contract legal will be adopted as the intention of the parties." Hartsfield Co. v. Shoaf, 184 Ga. 378, 381 ( 191 S.E. 693).
We believe the language of the acceleration clause is susceptible of a construction upholding the legality of the contract, to wit, that upon default the entire sum remaining unpaid will be accelerated, except unearned interest. So interpreted, the contract does not authorize the collection of usury and is not void. The judgment granting the writ of possession is affirmed.
Judgment affirmed. Quillian and Webb, JJ., concur.