# Petition for Writ of Certiorari — Midwest Laundry Equipment Corp. v. Berg > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385602_0991%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1966 - **Citation:** 382 U.S. 974 ## Text Office-Supreme Court, U.S. FILED LIBRARY: r = SUPREME COT RY 64 JOHN F. DAVIS, CLERK In The Supreme Court of the United States ra’ Vv October Term, 1965 4. Vv MIDWEST LAUNDRY EQUIPMENT CORP., Petitioner, Vs. MAURICE BERG AND JUNE BERG, | Respondents. rat PETITION FOR WRIT OF CERTIORARI TO THE SUPREME COURT OF NEBRASKA i) 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 o i 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 ii 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. ra Vv PETITION FOR WRIT OF CERTIORARI TO THE SUPREME COURT OF NEBRASKA ra Vv | 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. , —— Vw 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. 7 Vv 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’ ae 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. 3 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. re ae © STATEMENT OF THE OASE 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 4 ,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- ¥ d 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. st “ EE ees 6 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 7 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 “<> 8 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 9 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. 10 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 11 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 a 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. : 12 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. ww 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. x Jooaais E. Dean, Je. - Post Office Box 2077 Milwaukee, Wisconsin Counsel for Petitioner. 13 . 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 14 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. QO 15 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. a ‘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 ’ . 17 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, ee 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 19 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, 20 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 21 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 < a 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 23 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