Petition for Writ of Certiorari — Midwest Laundry Equipment Corp. v. Berg

Supreme Court brief1966

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Office-Supreme Court, U.S.

FILED

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SUPREME COT RY 64 JOHN F. DAVIS, CLERK

In The

Supreme Court of the United States

ra’

October Term, 1965

MIDWEST LAUNDRY EQUIPMENT CORP.,

Petitioner,

Vs.

MAURICE BERG AND JUNE BERG, |

Respondents.

rat

PETITION FOR WRIT OF CERTIORARI TO

THE SUPREME COURT OF NEBRASKA

JosEPpH EK. Dean, JR.

Post Office Box 2077

Milwaukee, Wisconsin

Matcotm D. Youne

Epwarp A. MULLERY

680 Insurance Building

Omaha, Nebraska

Attorneys for Petitioner.

COCKLE PRINTING CO., 1822 St. Mary’s Ave., Omaha

WAL A ee

AIG Ue ea LESAN ANNES lb DAR A ey ROL ne

INDEX

Pages

Petition for Writ of Certiorari to the Supreme Court

of Nebraska ...

Opinions Below

Jurisdiction

Questions Presented

Constitutional Provision and Statutes Involved

Statement of the Case

Raising the Federal Questions

Reasons for Granting the Writ

Conclusion

Proof of Service

Appendix A

Opinion No. 1

Opinion No. 2

Opinion No. 3

Judgment

SBSBRea&s & Bam wom we me

Appendix B

Section 45-138, R. R. S. 1943 (Reissue of 1960)... 33

Section 45-138, R.S. Supp. 1963, Cumulative Pock-

et Part Supplement, April 1965 35

Section 45-155, R. R.S. 1943 (Reissue of 1960) _.. 37

Section 451155, R.S. Supp. 1963, Cumulative Pock-

et Part Supplement, April, 1965 37

Section 45-155.01, R. 8. Supp. 1963, Cumulative

Pocket Part Supplement, April, 1965 38

I RAG haha ead echt, Masini wie vodeenrh anes

CASES CITED

Pages

Berg v. Midwest Laundry Equipment Corp., 175 Neb.

423, 122 N. W. 2d 250 1,13

Berg v. Midwest Laundry Equipment Corp., 175 Neb.

874, 124 N. W. 2d 699 2, 21

Berg v. Midwest Laundry Equipment Corp., 135 N. W.

2d 457 2, 23

Brinkerhoff-Faris Trust & Savings Company v. Hill,

281 U.S. 673

Michigan National Bank v. Robertson, et al., 372 U.

S. 591 7

Powell v. Edwards, 162 Neb. 11, 75 N>W. 24122... 7

Railroad and Warehouse Commission v. Chicago and

Northwestern Ry. Co., 256 Minn. 227, 98 N. W. 2d 60 10

State ex rel. Caldwell v. Lincoln St. Ry. Co., 80 Neb.

352, 118 N. W. 326 8

CONSTITUTIONAL PROVISION AND

STATUTES CITED

United States Constitution, Amendment XIV W0.. 3

28 U.S. Code, See. 1257(3) 2

Section 45-138, R. R.S. 1943 (Reissue of 1960) 3, 33

Section 45-138, R.S. Supp. 1963, Cumulative Pocket

Part Supplement, April, 1965 3, 35

Section 45-155, R. R. S. 1943 (Reissue of 1960) 3, 7, 37

Section 45-155, R.S.Supp. 1963, Cumulative Pocket

Part Supplement, April, 1965 3, 37

Section 45-155.01, R. B.S. 1963 3, 8, 38

In The

Supreme Court of the United States

October Term, 1965

MIDWEST LAUNDRY EQUIPMENT CORP.,

Petitioner,

vs.

MAURICE BERG AND JUNE BERG,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO

THE SUPREME COURT OF NEBRASKA

| Midwest Laundry Equipment Corp., your petitioner,

prays that a writ of certiorari issue to review the judg-

ment of the Supreme Court of Nebraska, entered in the

above-entitled case on May 28, 1965.

, ——

OPINIONS BELOW

- The District Court of Lancaster County, Nebraska

did not render any opinions in this case. The first opinion

of the Supreme Court of Nebraska is reported at 175 Neb.

423, 122 N. W. 2d 250. The second opinion of the Supreme

a 2

Court of Nebraska is reported at 175 Neb. 874, 124 N. W.

2d 699. The third opinion of the Supreme Court of Ne-

braska has not yet been officially reported, but is unof-

ficially reported at 135 N. W. 2d 457. All of these opinions

are reprinted in Appendix A.

JURISDICTION

The judgment of the Supreme Court of Nebraska, of

which review is sought by petitioner, was entered on May

28, 1965 (R.54).* A motion for rehearing was filed on

June 16, 1965 (R. 69), and was overruled on July 9, 1965

(R. 70). The jurisdiction of this Court is invoked under

28 U.S. Code, See. 1257(3).

ra’

QUESTIONS PRESENTED

1. Whether the refusal of the highest court of a state

to permit a litigant to file a brief on a point of law arising

during the pendency of an appeal constitutes a denial of

due process of law, in violation of the Fourteenth Amend-

ment to the Constitution.

2. Whether the refusal of the highest court of a state

to review a decision on a point of law which was raised

during a previous appeal of the case, but on which the

appellate court refused to give the parties a hearing, con-

stitutes a denial of due process of law, in violation of the

Fourteenth Amendment to the Constitution.

CONSTITUTIONAL PROVISION

AND STATUTES INVOLVED

The Fourteenth Amendment to the Constitution of the

United States provides in part as follows:

“«* * * nor shall any State deprive any person of life,

liberty, or property without due process of law; * * ©

The Nebraska statutes in ved in the first opinion

of the Supreme Court of Nebraska were Sections 45-138

and 45-155, R.R.S. 1943 (Reissue of 1960). The cited

sections were repealed on November 15, 1963, and were

replaced by Sections 45-138 and 45-155, R.S. Supp. 1963,

Cumulative Pocket Part Supplement, “April, 1965. The

amending act included a further provision codified as

Section 45-155.01, R.S.Supp. 1963, Cumulative Pocket

Part Supplement, April, 1965. All of the foregoing sec-

tions are set forth in Appendix B.

This is an action brought by respondents in the Dis- ©

trict Court of Lancaster County, Nebraska. Respondents

were the purchasers of a substantial quantity of laundry

equipment from petitioner. The purchase price of the

equipment exceeded $25,000.00. Respondents alleged in their

petition (R.3-10) that the retail installment contract be-

tween themselves and petitioner violated the Nebraska

Installment Loan Act, and was void. Prior to the filing

of suit, petitioner had assigned the retail installment‘edn-

tract to Industrial Credit Company, of St. Paul, Minne-

sota. Industrial Credit Company was named as a defend-

ant, and participated in the trial and the first appeal to

OT MR pate Las < Bont a

,the Supreme Court of N ebraska, but was then dismissed

from the case.

In the initial phase of this case, the District Court

of Lancaster County ruled generally in favor of petition-

er, and respondents appealed to the Supreme Court of

Nebraska (R. 25-26). In an opinion issued June 14, 1963

~(Appendix A), the Supreme Court of Nebraska held that

the céntract between petitioner and respondents violated

the Nebraska Installment Loan Act, that the contract was

illegal and void, and that petitioner should refund to re-

spondents all amounts paid to petitioner under the con-

tract. Petitioner filed a motion for rehearing (S.R. 4),

and the motion was argued on October 11, 1963 (S. R. 6).

On November. 15, 1963, while petitioner’s motion for re-

hearing was still under consideration by the Supreme

Court of Nebraska, the Nebraska Legislature drastically

revised the Installment Loan Act, the general effect of

the revision being to nullify the rulings of the Nebraska

Supreme Court in cases of this type. The amending act

contained a provision making it applicable to pending cas-

es (Appendix B). | bed

November 21, 1963, petitions filed a motion in the

Supreme Court of Nebraska, asking leave to submit a

brief showing the application of the new legislation to

this case (S. RB. 8-9). The motion was set for argument

on December 2;~1963. On November 22, 1963, the day

after the filing of the motion, ‘ahd before there had been

any hearing on the motion, the Supreme Court of Ne-

braska overruled petitioner’s motion for rehearing (S. R.

10). Subsequently, on December 10, 1963, the court over-

ruled petitioner’s motion for leave to file a supplemental

brief (S.R. 11).

In connection with the overruling of petitioner’s mo-

tion for rehearing, the Supreme. Court of Nebraska issued

a second opinion (Appendix A), directing the District

Court of Lancaster County to undertake further proceed-

ings in the case. After such farther proceedings had been

had, the District Court entered a jadgment finding that

the retail installment contract was illegal and void, despite

the legislation adopted by the Nebraska Legislature on

-November 15, 1963 (R. 38-41). Petitioner appealed from

this judgment to the Supreme Court of Nebraska (R. 49).

On May 28, 1965, the Supreme Court of Nebraska is-

sued its opinion relative to the second appeal from the

District Court (Appendix A). In this opinion the court

ruled that it would not even consider the application to

this case of the legislation adopted on November 15, 1963.

The court held that it had, in effect, already determined

this issue by overruling petitioner’s motion for rehearing

in connection with the first appeal.

Petitioner filed a motion for rehearing (B. 69), as-

serting that the Supreme Court of Nebraska, in violation

of the due process clause of the Fourteenth Amendment,

had effectively denied petitioner all opportunity for a hear-

ing on a crucial question of law—the application of the

ameliorative legislation to this case. The court overruled

the motion for rehearing on July 9, 1965.

“

EE ees

RAISING THE FEDERAL QUESTIONS

The federal question in this case arises by virtue of

' the peremptory procedure followed by the Supreme Court

of Nebraska in connection with the first appeal to that

court, and by virtue of the court’s refusal to reconsider

its peremptory ruling. While this case was pending in

the Supreme Court of Nebraska, on the first appeal, the

applicable statutes were drastically modified by the Ne-

braska Legislature. ‘The amending act specifically pro-

vided that it should apply to pending cases. Petitioner

thereupon filed a motion for leave to submit a brief show-

ing the application of the amending act to this case. With-

out permitting petitioner to file such a brief, and without

even giving petitioner a hearing on its motion for leave

to file such a brief, the Supreme Court of Nebraska per-

emptorily overruled petitioner’s motion for rehearing and

remanded the case to the District Court of Lancaster

County. Subsequently, the Supreme Court of Nebraska

overruled petitioner’s motion for leave to file a brief.

When the case reached the Supreme Court of Nebras- _

ka on the second appeal, petitioner included in its brief

authorities supporting its argument that the amending act

applies to this case, and petitioner cited authorities for

the proposition that the “Bupreme Court of Nebraska

should reconsider its peremptory ruling in connection with

the first appeal. The court ruled, however, that no matter

how peremptory and arbitrary its previous ruling had

_ been, that ruling would not be reconsidered. Petitioner

‘then filed a motion for rehearing, pointing out that the

court had, in effect, deprived petitioner of all opportunity

to be heard on a vital point of law, and that this denial

of a hearing violated the Fourteenth Amendment to the

United States Constitution (R.69). The Supreme Court

of Nebraska overruled the motion for rehearing (R. 70).

y, =

. a

REASONS FOR GRANTING THE. WRIT

This case presents a question of fundamental impor-

tance in the area of procedural due process—namely, the

right of a litigant to submit argument and legal authori-

ties to the tribunal of decision before a final adjudication

is made. This is a rather unusual question, to be sure,

since the tradition of dealing with legal questions by

means of written briefs and oral arguments is almost uni-

versally respected. The present case, however, presents

an extraordinary set of circumstances.

In 1956, the Supreme Court of Nebraska rendered the

first of a series of decisions, holding that transactions

which the parties had conceived to be bona fide install-

ment sales were, in legal effect, installment loans violating

the Nebraska Installment Loan Act. Powell v. Edwards,

162: Neb. 11, 75 N. W. 2d 122. The penalty for such viola-

tion, fixed by the statute, was complete nullification of the

buyer’s legal liability for the portion of the purchase

price to be paid in installments. R.R.S. 1943 (Reissue

of 1960), Section 45-155. The present case is one of a

large number of similar cases, in which persons buying

goods on credit have sought to have their installment ob-

ligations declared void and uncollectible. Another case

of this type was Michigan National, Bank v. Robertson, -

et al., 372 U.S. 591, in which this Court. reversed a judg-

eee ns POE EASE REEFS OHS

SARE AOR ELA

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ment of the Nebraska Supreme Court on the basis of a

question of venue.

During the seven years from 1956 to 1963, various leg-

islative efforts were made in Nebraska, to clarify the dis-

tinction between installment loans and installment sales.

Finally, on November 15, 1963, at a special session of the

Nebraska Legislature, a statute was adopted, the purpose

and effect of which were to nullify the decisions of the

Supreme Court of Nebraska on this subject. A clause in

this statute provided that the amendments should ‘‘apply

to all transactions made prior to November 15, 1963’’ ex-

cept ‘‘those transactions on which an action at law or

in equity has been reduced to a final judgment as of No-

vember 15, 1963.’’ Sec. 45-155.01, BR. S. Supp. 1963, Cumu-

lative Pocket Part Supplement, April, 1965.

Within a week after the ameliorative statute was

adopted, petitioner filed a motion in the Supreme Court

of Nebraska, asking leave to file a brief showing the ap-

plication of the new legislation to this case (S.R. 8-9).

The legal basis for the position taken by petitioner was

the case of State ex rel. Caldwell v. Lineoln St. Ry. Co.,

80 Neb. 352, 118 N. W. 326, wherein the Supreme Court

of Nebraska held that its judgments do not become final

until the motion for rehearing is overruled.

On the day after thé’ filing of petitioner’s motion for

leave to file a supplemental brief, the Supreme Court of

Nebraska overruled petitioner’s motion for rehearing.

When the case came to the Supreme Court of Ne-

braska on the second appeal, petitioner again pressed its

contention that the ameliorative legislative applies to this

ease. This contention was noted by tiie Nebraska Supreme

Court as follows:

‘‘Midwest further assigns error to this court in

overruling its motion for a rehearing on its considera-

tion of the previous appeal herein. It points out that

the judgment of this court was not final until the

disposition of its motion for rehearing. * * *’’ 135

N. W. 2d 460.

The Nebraska Supreme Court disposed of petitioner’s

contention with the following:

46% © © After the determination of the present

case in this court, the issuance of a mandate thereon,

and a judgment in the trial court pursuant to its

command, we will not thereafter review the questions

determined by our previous decision.’’ 135 N. W. 2d

462.

The effect of the ruling by the Nebraska Supreme

Court is to deny petitioner all opportunity for a hearing

on a point of law which might completely reverse the de-

cision of that court.

A somewhat similar situation was presented to this

Court in the case of Brinkerhoff-Faris Trust & Savings

Company v. Hill, 281 U.8. 673. In that case, a bank com-

plained that the local assessor had intentionally and sys-

tematically discriminated against the stockholders of the

bank, by assessing the bank stock at full value, while as-

sessing other property at less than full value. The Su-

preme Court of Missouri held that the bank’s complaint

should have been submitted to the state tax commission.

In so holding, the Supreme Court of Missouri overruled

@ previous decision, in which it had held that the state

tax commission had no jurisdiction over such matters.

Meanwhile, the time allowed for appealing to the state tax

commission had expired. The bank filed a petition for

rehearing, alleging that the decision of the Supreme Court

of Missouri had the effect of depriving the bank’s stock-

holders of property without due process of law. After the

petition for rehearing was overruled, this Court granted

certiorari and reversed the judgment of the state court.

This Court said:

‘Tf the judgment is permitted to stand, depriva-

tion of plaintiff’s property is accomplished without

its ever having had an opportunity to defend against

the exaction. The state court refused to hear the

plaintiff’s eomplaint and denied it relief, not because

of lack of power or because of any demerit in the

complaint, but because, assuming power and merit,

the plaintiff did not first seek an administrative rem-

edy which, in fact, was never available, and which is

not now open to it. Thus, by denying to it the only

remedy ever available for the enforcement of its right

to prevent the seizure of its property, the judgment

deprives the plaintiff of its property.”’’

In the present case, the Supreme Court of Nebraska

refused to give petitioner a hearing at the time of the

first appeal to that court, and the court again refused to

consider petitioner’s contention at the time of the second

appeal. The court could have considered petitioner’s claim

in the course of the second appeal, but simply refused: to

do so.

A case_yery closely in point is Railroad and Ware-

house Commission v. Chicago and Northwestern Ry. Co.,

256 Minn. 227, 98 N. W. 2d 60; in-which a proceeding was

initiated by the Railroad and Warehouse Commission for

the purpose of fixing rates for the hauling of certain com-

modities. At the close of the hearing, the attorney for the

railroads asked permission to file a brief. The Commis-

sion refused to grant the requested permission. On appeal

to the Supreme Court of Minnesota, the railroads attacked

the order of the Commission on the ground that there had

been a denial of due process of law. The Supreme Court

of Minnesota sustained this objection. Paragraph 2 of the

court’s syllabus reads as follows:

| ‘*Due process requires not only an opportunity to

present evidence but an opportunity to be heard either

by oral argument or written briefs.’’

In the present case, the Supreme Court of Nebraska

refused to permit petitioner to file a brief at the time’of

the first appeal; and when the case again came to that

court, on the second appeal, the court held that the issue

on which petitioner sought a hearing was foreclosed by

the decision : in’ the first appeal.

eS ea

CONCLUSION

"This case presents an issue which is absolutely basic

to the concept of due process of law. That issue is this:

May a court refuse to give a litigant a hearing on a ques-

tion of law, then make a ruling which is completely de-

pendent on the disputed question, and then refuse to give

any further consideration to the disputed question?

For the reasons stated herein, the petition for cer-

tiorari should be granted. :

Respectfully submitted,

JosePH EK. Dean, JR.

Post Office Box 2077

Milwaukee, Wisconsin

Matcotm D. Youne

Epwarp A. MuLLERY

680 Insurance Building

Omaha, Nebraska

Attorneys for Petitioner.

By:

One of Said Attorneys

ff.

PROOF OF SERVICE

I, Joseph E. Dean, Jr., one of the attorneys for Mid-

west Laundry Equipment Corp., petitioner herein, and a

member of the Bar of the Supreme Court of the United

States, hereby certify that o 3B 1965, I served

_a copy of the foregoing Petition for Writ of Certiorari

to the Supreme Court of Nebraska upon the respondents

by depésiting the same in a United States mail box, with

air mail postage prepaid, addressed to Norman M. Krivo-

sha,’911 Anderson Building, Lincoln, Nebraska, such be-

ing the address of oie of record for the respond-

ents.

Jooaais E. Dean, Je.

- Post Office Box 2077

Milwaukee, Wisconsin

Counsel for Petitioner.

. APPENDIX A

OprINions AND JuDGMENT or THe Supreme Court or

NEBRASKA

Opinion No. 1

Berg v. Midwest Laundry Equipment Corp.

No. 35409

Filed June 14, 1963

Heard before White, C. J., Carter, Messmore, Yeager,

Spencer, Boslaugh, and Brower, JJ.

BOSLAUGH, J.”

This is an action to declare an alleged retail install-

ment contract void and to recover all payments made un-

der the contract. The plaintiffs, Maurice Berg and June

Berg, are husband and wife. The defendants, Midwest

Laundry Equipment Corp. and Industrial Credit Company,

are corporations.

The trial court found that the contract was a valid

installment sale, but that Industrial Credit Company had

made certain charges in violation of the Installment Sales

Act and assessed a penalty against it. The trial court held

that the charges and the amount of the penalty should be

deducted from the balance due under the contract and that

the plaintiffs should pay the remaining installments due

under the contract to Industrial Credit Company.

The plaintiffs’ motion for new trial was overruled

and the plaintiffs have appealed. The defendant Indus-

trial Credit Company has cross-appealed. 3

The Midwest Laundry Equipment Corp... is engaged

in the sale of laundry equipment which is used in the op-

iS acini Mais

eration of coin-operated, self-service laundry stores. In-

dustrial Credit Company is engaged in the sales finance

business. It is a Minnesota corporation and its principal

place of business is in St. Paul, Minnesota.

The'plaintiffs alleged that Industrial Credit Company

was engaged in the business of making loans to residents

of the State of Nebraska. The plaintiffs attempted to ob-

tain jurisdiction over the person of Industrial Credit Com-

pany by having a summons served upon the Secretary of

State of the State of Nebraska. Industrial Credit Com-

pany filed a special appearance in which it denied that it

had been doing business in the State of Nebraska at any

time. Thereafter, Industrial Credit Company attempted

to preserve its special appearance. For the purpose of

this opinion we assume that it did preserve its special

appearance. The trial court overruled the special appear-

ance and Industrial Credit Company has cross-appealed

from that ruling.

Before a.state can subject a foreign corporation to

its jurisdiction, the corporation must have expressly con-

sented to such jurisdiction or it must have done sufficient

business in the state to constitute a submission to such

jurisdiction. Jurisdiction over a foreign corporation which

is actually doing business in Nebraska may be obtained

by service of process upon the Secretary of State even

though the corporation has not expressl¥ consented to such

jurisdiction. §S. 21-1201, R.R.S. 1943; Brown v. Globe

Laboratories, Inc., 165 Neb. 138, 84 N. W. 2d 151. It is

a question of fact as to whether a foreign corporation is

doing business in this state and each case must be, decided

upon its own facts.

The plaintiffs alleged that Midwest Laundry Equip-

ment Corp. was employed as an agent by Industrial Credit

Company for the purpose of soliciting loans to residents

of Nebraska. Agency cannot be established by the acts

or declarations of the alleged agent, but must be proved

by the acts or declarations of the principal. Rodine v.

Towa Home Mutual Gas Co., 171 Neb. 263, 106 N. W. 2d

391. There is no evidence of any act or declaration of

Industrial Credit Company to establish the agency al-

leged. .

There is evidence that Industrial Credit Company

has purchased 71 retail installment contracts from Mid-

west Laundry Equipment Corp. and that 18 of these con-

tracts were executed by residents of Nebraska. What evi-

dence there is as to how these contracts were purchased

shows contracts were offered to Industrial Credit

Company by Midwest Laundry Eqnipment Corp., at St.

Paul, Minnesota; that Industrial Credit.Company. was not

_ obligated to purchase any of the contracts offered to it;

that Industrial Credit Company made its own investiga-

tion as to the credit of the purchasers of the equipment;

that Industrial Credit Company refused to purchase the '

contract executed by the plaintiffs when it was first offered

to it by Midwest Laundry Equipment Corp.; and that the

contract was finally purchased after it had _been ‘¢re-

written’? to show a much larger downpayment to Midwest

Laundry Equipment Corp. than was actually made i the

plaintiffs.

We-conchude that’ the evidence fails to show that In-

dustrial Credit Company was doing business in Nebraska,

and its special appearance should have. been sustained.

‘This disposes of the case so far as Industrial Credit Com-

pany is concerned.

oe 16

The remaining questions concerns the right of the

plaintiffs to recoyer the amounts paid to Midwest Laun-

dry Equipment Corp. under the contract. That depends

upon a determination as to the validity of the contract

as between these parties. Since there is no jurisdiction

over the person of Industrial Credit‘ Company, no deter-

mination can be made as to the validity of the contract as

between the plaintiffs and Industrial. Credit Company in

this action.

A time sale made in good faith is valid in this state,

but a transaction which is in fact a loan made in violation

of the Installment Loan Act is void. Powell v. Edwards,

162 Neb. 11, 75 N. W. 2d 122. It is a question of fact as

to whether a particular transaction is a bona fide time

sale or the financing of the balance of a cash purchase

price. Trailmobile, Inc. v. Hardesty, 173 Neb..46, 112 *

N. W. 2d 535. In détermining whether a transaction is

a bona fide time sale or a loan, the court will look through

the form of the transaction and examine its substance.

State ex rel. Beck v. Associates. Discount Corp., 168 Neb.

298, 96 N. W. 2d 55. A transaction is not a valid time

sale unless the buyer at the time of the sale was informed

of and-Wa8 given an opportunity to choose between a cash

price and a valid time sale price. Wood v. Commonwealth

Trailer Sales, Inc., 172 Neb. 494, 110 N. W. 2d 87.

The re¢ord shows that the plaintiffs talked with Ray-

mond A. Erlandson, an employee of Midwest Laundry

Equipment Corp., in November 1959, at Fargo, North

e ’ .

Dakota. The plaintiffs had answered a newspaper adver-

tisement concerning self-service laundries. The first con-

versation concerned a store to be located at Grand Forks,

North Dakota. The second conversation was about a

store to be located at Minot, North Dakota. At the con-

clusion of the second conversation the plaintiffs paid $500

. to Erlandson, and Maurice Berg signed a sale and pur-

‘\. chase contract and a financial statement prepared by Er-

landson.

The sale and purchase contract was an agreement for

the purchase of 30 washers, 12 dryers, and related equip-

ment necessary for the operation of a self-service laundry

and was in the form of a contract of conditional sale. The

contract provided for a total cash price of $22,437.45; a

downpayment of $2,243.45, the balance of which was to be

paid before shipment; an amount to be financed of $20,194;

a time price differential of $3,937.83; the total amount of

the note of $24,121.83; and a total time price of $26,365.28.

The contract also provided: ‘‘$24,121.83 balance of time

selling price to be evidenced by an installment note pay-

able in 35 monthly installments of $670.00 each and a

final payment of $671.83. *° * * IF OTHER THAN A

CASH SALE, THIS CONTRACT IS SUBJECT TO AC-

CEPTANCE BY THE SELLER AFTER APPROVAL

OF PURCHASER’S CREDIT BY FINANCE FACTOR

AT ITS HOME OFFICE. ACKNOWLEDGMENT TO

THE PURCHASER BY LETTER OF ACCEPTABLE

CREDIT BY THE FINANCE FACTOR SHALL BE

DEEMED ACCEPTANCE BY THE SELLER.”

Maurice Berg testified that Erlandson said that the

contract and financial statement would be submitted to

eee | 1a

eee,

the finance company for its approval. Erlandson testified

that the ‘‘finance factor’’ referred to in the contract was

Midwest Laundry Equipment Corp. Erlandson further

testified that he explained to the plaintiffs that the cash

price of the equipment was $22,437.45 and that the time

price after payment of the full downpayment would be

$24,121.83; and that the time price differential of $3,937.83

was obtained by multiplying the cash price less the down-

payment by 61% percent per year for 3 years.

About 3 weeks after the conversations with Erlandson,

William W. Siebert, a salesman for Midwest Laundry

Equipment Corp., called the plaintiffs by telephone. Siebert

said that he had learned that two other stores were to be

opened in Minot and that he did not think that the plain-

tiffs should go ahead with the plan to open a store in

Minot.

A week or 10 days later Siebert again called the

plaintiffs and stated that a location in Norfolk, Nebraska,

was available. Paul A. Pothast, an employee of Midwest

Laundry Equipment Corp., talked with the plaintiffs about

the Norfolk location and the plaintiffs looked at the pro-

posed location.

After the plaintiffs had I6oked at the proposed loca-

tion in Norfolk, they met with Siebert at the office of

Midwest Laundry Equipment Corp. in Omaha. During

that conversation the plaintiffs agreed to purchase equip-

ment for the store at Norfolk, signed a blank form of a

sale and purchase contract, and paid some $1,900 to

Siebert. The plaintiffs testified that they were not quoted

a cash price and a time price for the equipment which

they agreed to purchase for the Norfolk store. Siebert

testified that he did not recall discussing a cash price

and a time price with the plaintiffs and that he knew their

order was going to be a time-sale purchase when it came

in. About 2 weeks after the conversation at Omaha, the

plaintiffs received a copy of the sale and purchase con-

tract.

In December, 1959, Maurice Berg was employed for a

short time as a trainee salesman by Midwest Laundry

Equipment Corp.

In February, 1960, Siebert came to the plaintiffs’

home in Norfolk, Nebraska, and asked for their copy of

the sale and purchase contract for the equipment for the

Norfolk store. Siebert then destroyed their copy of the

contract and stated that Industrial Credit Company had

not accepted the financial statement of Maurice Berg. At

this time the equipment had been delivered and its installa-

tion in the Norfolk store was nearly complete. Siebert then

proceeded to write out a new sale and purchase contract

with a retail installment contract, both of which were

signed by the plaintiffs. The retail installment contract

signed at Norfolk in February, 1960 was eventually as-

signed to Industrial Credit Company by Midwest Laundry

Equipment Corp. and is the contract which is the subject

of this action.

‘The new sale and purchase contract and the retail«

installment contract provided for a downpayment oft $4,-

856.96. However, no additional amount-was paid to Midwest

Laundry Equipment Corp. by the plaintiffs. The only

amounts that were ever paid to Midwest, Laundry Equip-

ew,

ment Corp. were the amounts that had been previously

paid. The new contracts provided for 35 monthly pay-

ments of $725 and a final payment of $743.28. The con-

tracts recited a cash sale price of $26,713.28, cash down-

payment of $4,856.96, amount to be financed $21,856.32,

time price differential $4,261.92, total amount of note

$26,118.24, and total time price of $30,380.16.

The evidence in this case, taken as a whole, shows

that Midwest Laundry Equipment Corp. did not intend

to make any sale other than a cash sale. In the event

that a purchaser was unable to pay the full cash price,

the sale was contingent upon Midwest Laundry Equipment

Corp. being able to make suitable arrangements for the

financing of the balance of the cash price. If financing

could be arranged, the purchaser-then signed“a retail in-

stallment contract which was intended to appear to evi-

dence a time sale but which in fact evidenced a loan for

the payment of the balance of the cash price. The evidence

concerning the ‘‘rewriting’’ of the contract at Norfolk

in February of 1960, for the purpose of stating a higher

downpayment than was actually made, is convincing evi-

dence that the transaction in question was not a time sale

made in good faith.

The contract in this case provided a charge of $4,-

261.92 to finance a balance of $21,856.32, the entire amount

to be paid in 36 equal monthly installments. The Install-

ment Loan Act as amended prohibits any charge in excess

of 9 percent per annum where the indebtedness is in ex-

cess of three thousand dollars. S. 45-138, R. R. S. 1943.

The charge which was made is in excess of 9 percent per

annum. The contract is therefore, void. Powell v. Ed-

wards, supra.

The plaintiffs are entitled to judgment against Mid-

west Laundry Equipment Corp. for the $500 paid in

November 1959, plus the balance of the downpayment paid

in Omaha. Midwest Laundry Equipment Corp. is entitled

to a credit in the amount of $725 which the plaintiffs

admit having received from Midwest Laundry viata bas

Corp. on or about May 3, 1960.

The record does not show the exact amount of the

payment made in Omaha. The district court is authorized

to receive further evidence, if necessary, to determine the

amount of that payment.

The judgment of the district court is reversed ard

the cause is remanded for further proceedings, if’ neces-

sary and with directions to enter a judgment in conformity

with this opinion.

_ REVERSED AND REMANDED WITH DIREC-

TIONS.

Opinion No. 2

Berg v. Midwest Laundry Equipment Corp.

No. 35409

Filed November 22, 1963

Heard before White, C. J., Carter, Messmore, Yeager,

Spencer, Boslaugh, and Brower, JJ.

BOSLAUGH, J.

The appellee, Midwest Laundry Equipment Corp., has

filed a motion for rehearing in which it contends that the

22°

appellants are not entitled to recover the amounts paid

to it upon the contract for the purchase of the laundry

equipment even though the contract is void. This question

was not raised in the briefs or argument in this court until

the motion for rehearing was filed.

Upon further consideration of the matter, we are now

of the opinion that the cause should be remanded to the

district court with directions to determine the amount of —

the payments made by the appellants to the Midwest

Laundry Equipment Corp. and whether the appellants

should recover this amount from the Midwest Laundry

Equipment Corp. in view of our determination concern-

ing the validity of that contract.

Our opinion in this case filed on June 14, 1963, is

modified accordingly. The motion for rehearing is over-

ruled.

ORIGINAL OPINION MODIFIED.

MOTION FOR REHEARING OVERRULED.

Opinion No. 3

Berg v. Midwest Laundry Equipment Corp.

No. 35888

Filed May 28, 1965

Heard before White, C. J., Carter, Spencer, Bos-

laugh, Brower, Smith, and McCown, JJ.

BROWER, J.

Plaintiffs Maurice Berg and June Berg, husband and

wife, hereinafter referred to as the plaintiffs, brought this

action in the district court for Lancaster County against

the defendants Midwest Laundry Equipment Corp. and

Industrial Credit Company to declare a retail installment

contract void as usurious and recover payments made by

them thereon.

This is the second appearance of this case in this

court. The previous opinion appears in Berg v. Midwest

Laundry Equipment Corp., 175 Neb. 423, 122 N. W. 2d

250, where the facts involved are set forth. A supple-

mental opinion entered after a motion for a rehearing

appears in 175 Neb. 874, 124 N. W. 2d 699.

_ At the first trial in the district court, the trial court

overruled a special appearance of the defendant Industrial

Credit Company objecting to jvr<diction over its person.

That court held the installment sales contract in question

valid but that the Industrial Credit Company had made

certain charges in violation of the Installment Sales Act

and assessed a penalty to be deducted from the balance

due upon the contract. It adjudged that the plaintiffs pay

the installments which remained thereon to Industrial

Credit Company..

Our opinion in Berg v. Midwest Laundry Equipment

Corp., 175 Neb. 423, 122 N. W. 2d 250, filed herein June

14, 1963, held the special appearance of Industrial Credit

Company should have been sustained, that the retail in-

stallment contract actually evidenced a loan for the balance

of the purchase price, and being usurious was void under

section 45-138, R. R. S. 1943. It further held that the evi-

dence showed the defendant Midwest Laundry Equipment

Corp., hereafter at times referred to as Midwest, did not

-t

intend to make a sale except a cash sale and that plaintiffs

were entitled to judgment against it for two payments

made, less a credit of $725 which was admitted to have

been received by plaintiffs from Midwest. The amount

of one of the two payments made not being disclosed by

the record, the district court was authorized to receive

further evidence to determine the amount thereof. The

judgment of the trial court was reversed and the cause

remanded with directions to enter judgment in conformity

with the opinion.

The defendant Midwest timely filed a motidn for re-

hearing in this court objecting to the opinion of the court,

among other things contending that the downpayment to

the retail seller Midwest was no part of the installment

loan contract. It contended this court erred in ordering

this downpayment refunded. The supplemental opinion

of this court filed November 22, 1963, Berg v. Midwest

Laundry Equipment Corp., 175 Neb. 874, 124 N. W. 2d

699, directed the trial court to determine both the amount

of the payments to Midwest and whether it should recover

their amount on the determination.

Meantime on November 21, 1963, Midwest filed a

motion calling attention to ‘the enactment of statutes at

the extraordinary session of the Legislature bearing on

the issues involved in the litigation and asking leave to

brief the same. The motion was denied by this court on

December 10, 1963.

The mandate of this court was issued December 13,

1963, with our opinion and supplemental opinion attached.

Both parties moving for judgment on the mandate, hear-

n ~ as een RS ist ouse

ings were held and thereafter the trial court sustained

the special appearance of Industrial Credit Company. It

further held that the retail installment contract between

the parties was void and uncollectible, and enjoined Mid-

west and its successors from collecting the same. Midwest

was ordered to return two downpayments made to it in the

total amount of $2,243.45 with interest from the respective

dates of payment. It found that by stipulation of the

parties, the $725 payment referred to in the opinion of this

court had been disposed of by agreement between the

parties and need not be further considered. The motion

of Midwest to vacate the judgment and for a new trial

being overruled, it has brought the matter to this court

on appeal.

Midwest assigns error to the trial court in finding

the installment sales contract void and uncollectible. It

contends that under sections 45-137, 45-138, 45-154, and

45-155, R. R. S. 1943, as amended by Laws 1963, Special

Session, chapter 9, page 103 (L. B. 17), a loan made in

violation of the Installment Loan Act as it existed prior

to the amendment of these sections is no longer void al-

though any interest or charges collected should be for-

feited and refunded to the borrower. In this respect it

cites Davis v. General Motors Acceptance Corp., 176 Neb.

865, 127 N. W. 2d 907, where this court held this statute

to be valid and constitutional legislation and to effectively

repeal the provisions in the original Installment Loan Act

which rendered loans made in violation thereof void and

uncollectible, and that because of the expressed intention

of the Legislature, the repeal was given retroactive effect.

In Jurgensen v. Ainscow, 160 Neb. 208, 69 NaW. 2d 856,

this court held: ‘‘Public interest requires that there shall

be an end to litigation, and when a cause has received the

consideration of this court, has had its merits determined,

and has been remanded with specific directions, the court

to which such mandate is directed has no power to do any-

thing other than to enter judgment in accordance with such

mandate.’’ To the same effect see Regouby v. Dawson

County Irr. Co., 128 Neb. 531, 259 N. W. 365. The trial

court had no alternative under the mandate but to enter

the judgment it did in this respect and committed no

error in so doing.

Midwest further assigns error to this court in over-

ruling its motion for a rehearing on its consideration of

the previous appeal herein. It points out that the judg-

ment of this court was not final until the disposition of

its motion for rehearing. State ex rel. Caldwell v. Lincoln

Street Ry. Co., on rehearing, 80 Neb. 352, 118 N. W. 326;

Revised Rules of the Supreme Court, Rule No. 22a. It

ealls attention to its motion addressed to this court seek-

ing permission to file a brief on the applicability of the

recent remedial legislation before our decision became

final. Further, it asserts this court on the second appeal

between the same parties may review and reverse its for-

mer decision and has done so in certain instances. It cites

City of Hastings v. Foxworthy, 45 Neb. 676, 63 N. W. 955,

34 L. R. A. 321, which case was before this court several

times. Foxworthy as plaintiff had sued the City of Has-

tings for injuries incurred in falling on a sidewalk. The

City answered that plaintiff had failed to file action within

6 months from the date of the accident as required by the

statute. Plaintiff demurred to the answer. The trial court

sustained the demurrer. This court on the first appeal held

that the section of the statute requiring action to be

brought within 6 months was unconstitutional. It reversed

the judgment and remanded the cause generally for trial.

The statute then under consideration had a further: pro-

vision requiring filing of a statement with the city clerk

showing the date of the injury and certain matters con-

cerning it within 6 months of the injury. Between the

time of the reversal on the first appeal and the decision

of this court in City of Hastings v. Foxworthy, supra, this

court had held in other cases that such a provision was

valid, that the giving of the. statement was a condition

precedent to maintaining the action, and was required, to

be alleged and proved. In the cited case the court held ~

the demurrer to the answer should have searched the

record and disclosed the failure of the petition to state

a cause of action. The judgment was thereupon reversed

and the petition dismissed, the rule of law set out stating:

‘*An appellate court, on a second appeal of a case, will

not ordinarily re-examine questions of law presented by

the first appeal, but where the case was on the first appeal

remanded generally for a new trial and the same questions

are presented on the second trial, the appellate court is

not bound to follow opinions on questions of law presented

on the first appeal and may re-examine and reverse its

rulings on such questions, and should do so when the

opinion first expressed is manifestly incorrect.” ;

Midwest seizes on certain statements. in the long opin-

ion in the Foxworthy case discussing many cases and

aspects of the law applicable from which it contends this

eourt should review all questions coming before it on a

subsequent appeal that by reason of a change in the law

might be decided anew. In the Foxworthy case, however,

there had been a general remand for a rew trial. The

previous ruling had sustained a démurrer to the answer

and it was only by the application of the rather technical

legal rule that a demurrer searches the record that it

could even be inferred that the previous opinion of the

court had determined that the original petition had stated

a cause of action. A careful reading of the Foxworthy case

clearly shows no intent to go beyond the rule stated.

Midwest cites also the case of Eccles v. Walker, 75

Neb. 722, 106 N. W. 977. There the Supreme Court had

previously reversed the judgment of the trial court which

had dismissed the action. The court called attention to

the fact that it had previously remanded the cause for trial

generally and applied the rule in the Foxworthy case

permitting it to arrive at a new and different decision. It

did not enlarge upon that rule.

Midwest also calls attention particularly to Stratton

v. Bankers Life Co., 102 Neb. 755, 169 N. W. 722, 1 A. L. R.

1671. It points out this case was decided differently on

the second appeal in spite of the directions to enter a

judgment on certain issues at the first hearing of this

case in this court. The opinion states that, the appellate

court will not ordinarly reexamine questions once deter-

minued by it but the case comes within the exceptions of

City of Hastings v. Foxworthy, supra. The first opinion

in the Stratton case is apparently /mot reported and the

substance of the pleading is not discloged. The real basis

of the decision seems to be that the emer decision was

‘‘manifestly outside of, the pleadings.’’ It has been held

by-this court in Drieth v._Dormer, 148 Neb. 422, 27 N. W.

2d 843, that: ‘‘The judgment of a court upon a subject

within its general jurisdiction, but which is not brought

before it by any statement or claim of the parties and is

foreign to the issues submitted for determination, is a

nullity.’’ See, also, Petersen v. Dethlefs, 139 Neb. 572,

298 N. W. 155, where this court held: “A finding or other

part of a judgment foreign to any pleading and not neces-

sary to the relief grantable to any ‘litigant in a case is

contrary to the course of the law and the practice of the

courts, is void and should be stricken from the record on

motion.’’ If the first decision was outside the pleading

as stated, the ground of the second ruling is apparent. We

do not think this case should be the basis of extending

the rule in City of Hastings v. Foxworthy, supra, and

applying it to the case before us.

In the case of Burnham v. Bennison, 130 Neb. 558,

265 N. W. 531, this court held: “The appellate court may,

on the second appeal -between the same parties, if justice

requires, review and reverse its former decision; but the

parties are not entitled to such review as a matter of

right; such practice will be resorted to sparingly, and only

in cases where cogent reasons exist therefor.

“‘The appellate court, on a second appeal between the

same parties, will not ordinarily reexamine questions of

law presented in the first appeal, as the matters decided

therein come within the rule of stare decisis, and become

the law of the case.

‘*On a second appeal between the same parties in the

same cause, where the second appeal merely seeks to re-

litigate questions settled by the opinion in the former

appeal, this court will not inquire into the merits of its

former opinion, where it appears that the second appel-

lants sought a rehearing in the former appeal, which was

denied, and the cause reversed and remanded, with direc-

tions to the lower court to render judgment in accordance

with the opinion.’’ In the opinion if is stated: ‘* Appel-

lants seem to rely upon the case of City of Hastings v.

Foxworthy, 45 Neb. 676,63 N. W. 955. This case contains

an exhaustive and elaborate discussion of a number of

eases in which the rule of stare decisis‘was presented, and

in a well-considered opinion it announced the following

rule: * * *. (Setting forth the rule quoted in Foxworthy.)

It will be noted in the case above mentioned that the rule

applied arose in a case where on the first appeal the case

was reversed and remanded for a new trial. Such is not

the fact as presented by the record here. The case was

reversed and remanded, not for new trial, but was re-

manded with specific directions to a trial court to enter

judgment in accordance with the opinion. ”? See, also,

Gund v. Ballard, 80 Neb. 385, 114 N. W. 420; Jurgensen

v. Ainscow, supra.

In the case before us our opinion of June 14, 1963,

held the installment sales contract was void and reversed

the judgment in that respect. It remanded the cause per-

mitting the trial court to determine only the’ amount of

the downpayment for the purpose of entering judgment

for the plaintiff for that also. The supplemental opinion

of November 22, 1963, modified the original opinion only

to the extent of directing the trial court to determine

whether the downpayment after it was determined should

—

be recovered by plaintiffs. In Kometscher v. Wade, 177

' Neb. 299, 128 N. W. 2d 781, this court determined it would

not reverse a judgment of the trial egurt entered pre-

viously to the enactment of Laws 1963, Special Session,

chapter 9, page 103 (L. B. 17), because of the changes

made in that law. We think the rule in City of Hastings

v. Foxworthy, supra, should be adhered to and not ex-

tended. After the determination of the present case in this

court, the issuance of a mandate thereon, and a judgment

in the trial court pursuant to its command, we will not

thereafter review the questions determined by our previous

decision.

Midwest further assigns error to the trial court in

ordering it to’ refund the downpayments of $2,243.45 and

interest to the plaintiffs. This aspect of the case was left

for the determination by the trial court in our supple-

mental opinion. The statute determinative of this matter

as it existed prior to its amendment by Laws 1963, Special

Session, chapter 9, section 2, page 108 (L. B. 17), was

section 45-138, R. R: S. 1943. The portion setting forth

the effect of a violation of the provisions thereof reads

as follows: ‘‘Any contract of loan made in violation of

this section, either knowingly or without the exercise of

due care to prevent the same, shall be void and the licensee

shall have no right to collect or receive any principal,

interest, or charges on such loan.’’ It refers to the ‘‘loan’’

and provides that the loan shall be void and that the

licensee shall have no*right to collect or receive any

principal, interest, or charges ‘‘on such loan.’”’ Plaintiffs

contend the word ‘‘charges’’ included in this phrase means

any payment exacted or received by the seller and includes

the downpayment. We believe, however, it refers to

charges as used in section 45-139, R. R. S. 1943, which are

permitted to be included in an installment loan. It does

not mention the downpayment made on the purchase. The

downpayments in this instance were made in November

1959 and January 1960. The installment sales contract

was not signed until February 19, 1960. In Misle v. Miller,

176 Neb. 113, 125 N. W. 2d 512, this court said: ‘“‘A

penalty statute must be strictly construed. It will not be

applied to situations or parties not fairly or clearly within

its provisi mns.’’ We are referred to many cases where

certain j anti in the opinions are urged by the

respective parties herein as indicative of their desired

interpretation of the section. They appear to be obiter

dicta. We are referred to no case where the downpayment

was adjudged to bé invalid. Neither have we found such

a case. The reports are, however, replete with cases where

the principal, interest, and charges on the loan itself were

recovered and the downpayment was not mentioned. We

conclude the plain wording of section 45-138, R. R. S. 1943,

before its amendment by Laws 1963, Special Session, chap-

ter 9, section 2, page 108 (L. B. 17), rendered void only

the payments of principal, interest, and charges included

in the loan and did not affect a downpayment which was

no part thereof. We conclude the trial court erred in

ordering it returned to the plaintiffs in its judgment.

It follows that the judgment of the trial court should

be reversed and the cause remanded insofar as it provides

for the payment to the plaintiffs ‘of the $2,243.45 and

interest, and should be and is affirmed in all other

respects.

AFFIRMED IN PART, AND IN PART REVERSED

AND REMANDED. ‘

J UDGMENT

And afterwards, to wit, on the 28th day of May, 1965,

there was rendered by said Supreme Court of Nebraska

and entered of record upon Journal TTT thereof, at page

303, a certain Judgment in the words and figures follow-

ing, to wit:

This cause coming on to be heard upon appeal from

the district court of Lancaster County was argued by coun-

sel and submitted to the court; upon due consideration

whereof, the court finds error in that part of the judgment

of said district court which ordered defendant, Midwest

Laundry Equipment Corporation to refund to the plain-

tiffs the down payment of $2,243.45 and interest, and in

this respect said judgment is reversed and the cause re-

manded ,and in all other respects said judgment is af-

firmed; that appellant recover of and from plaintiff ap-

pellee its costs herein expended, taxed at $194.00; for all

of which execution.is hereby awarded and that a mandate

issue accordingly. - °

APPENDIX B

Nebraska Statutes

Section 45-138, R. R. S. 1943 (Reissue of 1960):

45-138. Installment loans; loans in excess of three

thousand dollars; preexisting debt; loan period; vio- .

lation. (1) No licensee shall directly or indirectly

charge, contract for, or receive a greater rate of

interest than nine per cent per annum upon any loan,

or upon any part of (sic) all of any aggregate in-

debtedness of the same_persen; in excess of three

thousand dollars.

(2) The prohibition contained in subsection (1)

of this section shall also apply to any licensee who

permits any person, as borrower or as endorser, guar-

antor, or surety for. any borrower, or otherwise, or

any husband and wife jointly or severally, to owe

directly, contingently, or both to the licensee at any

time a sum of more than three thousand dollars for

principal; Provided, that if a licensee shall acquire,

directly or indirectly, by purchase or discount, bona

fide obligations for goods or services owed by the

person who received such goods or services, then the

amount of such purchased or discounted indebtedness

tonthe licensee, referred to in subsections (1) and (3)

of this section, shall not be ificluded in computing“the

aggregate indebtedness of such borrower to the li-

censee for the purpose of the foregoing prohibitions;

and provided further, that if the proceeds of any loan

of three thousand dollars or less, referred to in sub-

sections (1) and (3) of this section, are used to dis-

charge a preexisting debt of the borrower for goods

or services owed direttly to the person who provided

such goods or services, the licensee may accept from

such person a guaranty of payment of the principal

of such loan, with interest at a-rate not exceeding that

which the licensee’could lawfully charge if he were

not licensed hereunder. The acceptance of one or

more of such guaranties in any aggregate amount

shall not affect the rights of- such licensee to make

the charges against the borrower authorized by section

45-137.

(3) No licensee shall enter into any contract of

loan, referred to in subsection (1) or (2) of this sec-

tion, under sections 45-114 to 45-155, under which the

borrower agrees to make any payment of principal

more than thirty-six calendar months from the date

of making such contract, referred to in subsection (1)

or (2) of this section, if such contract is not secured

by a bona fide duly recorded mortgage on real estate

owned by the borrower, or under which the borrower

ah lt

~~) , 39

agrees to make payment of principal more than thirty-

six calendar months from the date of making such

contract, if the contract of loan is secured by a bona

fide duly recorded mortgage on real estate owned by

the borrower. Every loan contract shall provide for

repayment of principal and charges in installments °

which shall be payable at approximately equal periodic

_intervals of time and so arranged that no installment

is substantially greater in amount than any preceding

installment. When necessary in order to facilitate

payment in accordance with the debtor’s principal

source of income, a debtor,’ whose principal source

of income is from agriculture, stock raising, or school

teaching, the payment schedule may reduce or omit «

installment payments, if at least one half of the credit

is to be repaid within the first half of the applicable

maximum maturity and if the other. payments are

increased in such manner that they will be susbstant-

ially equal or declining in amount and sufficient in the

aggregate to retire the loan in the period of thirty-six

months, as provided for in this subsection. Any

contract of loan made in violation of this section,

either knowingly or without the exercise of due care to

prevent the same, shall be void and the licensee shall

have no right to collect or receive any a in-

terest, or charges on such loan.

Section 45-138, R. S. Supp. 1963, Cumulative Pocket

Part Supplement, April, 1965:

45-138. Installment loans; loans in excess of three

thousand dollars; preexisting debt; loam period; vio-

lation. (1) No licensee shall directly or indirectly

charge, contract for, or receive a greater rate of in-

terest than nine per cent per annum upon any loan,

or upon any part of (sic) all of any aggregate indebt-

edness of the same person, in excess of three thousand

dollars.

(2) The prohibition contained in subsection (1)

of this section shall also apply to any licensee who per-

mits any person, as borrower or as endorser, guar-

antor, or surety for any borrower, or otherwise, or

any husband and wife jointly or severally, to owe

directly, contingently, or both to the licensee at any

time a sum of more than three thousand dollars for

principal; Provided, that if a licensee shall acquire,

directly or indirectly, by purchase or discount, bona

fide obligations for goods or services owed by the

person who received such goods or services, then the

amount of such purchased or discounted indebtedness

to the licensee, referred to in subsections (1) and (3)

of this section, shall not be included in computing the

aggregate indebtedness of such borrower to the li-

censee for the purpose of the foregoing prohibitions;

and provided further, that if the proceeds of any

loan of three thousand dollars or less, referred to

in subsections (1) and (3) of this section, are used

to discharge a preexisting debt of the borrower for

goods or services owed directly to the person who

provided such goods or services, the licensee may

accept from such person a guaranty of payment of the

principal of such loan, with interest at a rate not

exceeding that which the licensee could lawfully charge

if he were not licensed hereunder. The acceptance of

one or more of such guaranties in any aggregate

amount shall not affect the rights of such licensee to

make the charges against the borrower authorised by

section 45-137.

(3) No licensee shall enter into‘any contract of

loan, referred to in subsection (1) or (2) of this section.

under sections 45-114 to 45-155, urlf@er which the bor-

rower agrees to make any payment of principal more

than thirty-six calendar months from the date of

making such contract, referred to in subsection (1)

or (2) of this section, if such contract is not secured

by a bona fide duly recorded mortgage on real estate

owned by the borrower, or under which the borrower

agrees to make payment of principal more than thirty-

six calendar mon the from the date of making such

contract, if the contract of loan is secured by a bona

fide duly recorded mortgage on real estate owned by

the borrower. Every loan contract shall provide for

repayment of principal and charges in installments

which shall be payable at approximately equal periodic

intervals of time and so arranged that no installment

is substantially greater in amount than any preceding

installment. When necessary in order to facilitate

payment in accordance with the debtor’s principal

source of income a debtor, whose principal source of

income is from agriculture, stock raising, or school

teaching, the payment schedule may reduce or omit

installment payments, if at least one half of the credit

is to be repaid within the first half. of the applicable

maximum maturity and if the other payments are

increased in such manner that they will be substanti-

ally equal or declining in amount and sufficient in the

aggregate to retire the loan in the period of thirty-

six months, as provided for in this subsection. Any

contract of loan made in violation of this section,

either knowingly or without the exercise of due care

to prevent the same, shall not on that account be void,

but the licensee shall have no right to collect or receive

any interest or charges on such loan. If any interest

or other charges have been collected, the licensee shal]

forfeit and refund to the borrower all interest and

other charges collected on the loan involved.

Section 45-155, R. R. 8. 1943 (Reissue of 1960):

45-155. Licensees; violations; effect. Violation of

sections 45-114 to 45-155 in connection with any

indebtedness, however acquired, shall render such in-

debtedness void and uncollectible.

Section 45-155, R. S. Supp. 1963, Cumulative Pocket

Part Supplement, April, 1965:

45-155. LIncensees; violations; effect. Violation

of sections 45-114 to 45-155 in connection with any

indebtedness, however acquired, shall not render such

indebtedness void and uncollectible. If however, any

interest or other charges have been collected on such

indebtedness, all interest and other charges shall be

forfeited and refunded.

“ Section 45-155.01, R. S. Supp. 1963, Cumulative Pocket

Part Supplement, April, 1965:

45-155.01. Loan transactions prior to November

15, 1963; penalty provisions. Except as to those trans-

: actions on which an action at law or in equity has

. ; been reduced to a final judgment as of November 15,

# 1963, the penalty provisions of section 45-137, enacted

: by the Seventy-third Session of the Legislature of

if Nebraska and as further amended by this act and the

penalty provisions of sections 45-138, 45-154 and

45-155, shall apply to all transactions made prior to

November 15, 1963.

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