Pacific Finance Corp. v. Slayton

The question is whether a contract for the loan of money, admittedly usurious, was discharged by action of the parties when a new obligation was incurred by the borrower in circumstances claimed by the lender to have been wholly independent of the outstanding debt. The second note does not show upon its face (nor is such fact reflected by the contract) that the vice now complained of was brought forward. As an aid in purchasing a used Plymouth car, Jack E. Slayton procured of appellant a loan of $675 February 15, 1952. Installment payments were $45 over a fifteen-month period. General Motors Acceptance Corporation was paid $478.19. Added to interest of $42.19 was $39 identified by the single word ""charges"" - the two items amounting to $81.19. Other deductions were: Fire and theft insurance, $8.75; group installment credit disability certificate, $33.75; insurance premium on car, $66.25; differential paid the borrower in cash, $6.87. 1