O.C.G.A. § 7-4-2 — Gallagher v

McKinnon, 273 Ga. App. 727, 615 S.E.2d 746, 2005 Ga. App. LEXIS 378 (2005), cert. denied, No. S05C1740, 2005 Ga. LEXIS 745 (Ga. Oct. 24, 2005). Applicability to national banks of state laws regulating interest rate. — See Cooper v. National Bank, 21 Ga. App. 356, 94 S.E. 611 (1917), cert. denied, 246 U.S. 670, 38 S. Ct. 423, 62 L. Ed. 931 (1918), aff’d, 251 U.S. 108, 40 S. Ct. 58, 64 L. Ed. 171 (1919). See also 12 USC §§ 85 and 86, and annotations relating thereto . Federal savings and loan association subject to usury laws. — Federal savings and loan association doing business in this state is subject to usury laws and in making loans must comply with provisions thereof. However, such association may require borrower to pay necessary initial charges in connection with making of loan. First Fed. Sav. & Loan Ass’n v. Norwood Realty Co., 212 Ga. 524, 93 S.E.2d 763, 1956 Ga. LEXIS 434 (1956). Construction of Industrial Loan Act (see now Georgian Installment Loan Act, O.C.G.A. § 7-3-1 et seq.) and former Code 1933, § 57-101 (see now O.C.G.A. § 7-4-2) as to pawn-brokers. — See Wall v. Lewis, 192 Ga. 652, 16 S.E.2d 430, 1941 Ga. LEXIS 544 (1941). Installment Loan Act operates in same manner generally as usury statute. — Industrial Loan Act (see now Georgia Installment Loan Act, O.C.G.A. § 7-3-1 et seq.) operates generally upon entire class of subjects with which it deals, uniformly throughout the state and in the same manner generally as the usury statute. Talley v. Sun Fin. Co., 223 Ga. 419, 156 S.E.2d 55, 1967 Ga. LEXIS 547 (1967). Acts 1912, p. 144 (see now O.C.G.A. § 7-4-10(a)) was not invalid as special law for which provision had been made by former Civil Code 1910, §§ 3426 and 3436 (see now O.C.G.A. § 7-4-2). South Ga. Mercantile Co. v. Lance, 143 Ga. 530, 85 S.E. 749, 1915 Ga. LEXIS 511 (1915). Section not repealed by §§ 36-11-3 through 36-11-6. — Former Code 1933, § 23-1605 (see now O.C.G.A. §§ 36-11-3 697 General Consideration (Cont’d) through 36-11-6) did not expressly or impliedly repeal former Code 1933, §§ 57-101 and 57-110 (see now O.C.G.A. §§ 7-4-2, 7-4-15), and former Code 1933 § 14-207 (see now O.C.G.A. § 11-3-108). They all were to be considered together, and when so considered, the sections ﬁrst mentioned contemplate administrative action by county officers in regard to the order in which lawful county orders should be paid. Marion County v. First Nat’l Bank, 193 Ga. 263, 18 S.E.2d 475, 1942 Ga. LEXIS 375 (1942). Floating interest rates under P.L. 93-501. — The 1975 amendments to former Code 1933, § 57-101 (see now O.C.G.A. § 7-4-2) were not intended to supersede ﬂoating interest rates permitted by Public Law 93-501. Kennedy v. Brand Banking Co., 245 Ga. 496, 266 S.E.2d 154, 1980 Ga. LEXIS 832 (1980). Liquidated damages for nonpayment of money cannot exceed lawful interest. — No damages for mere nonpayment of money can ever be so liquidated between parties as to evade provisions of law which ﬁx rate of interest. Clark, Austin & Smith v. Kay, 26 Ga. 403, 1858 Ga. LEXIS 329 (1858). Lender may recover annual interest payments when due, whether principal is due or not. — Maker of note having expressly contracted to pay interest annually, holder is entitled to recover interest when due, whether principal is due or not. Calhoun v. Marshall, 61 Ga. 275, 1878 Ga. LEXIS 101 (1878); Ray v. Pease, 97 Ga. 618, 25 S.E. 360, 1895 Ga. LEXIS 538 (1895). Underwriting is not an agreement to loan money. Stewart v. G. L. Miller & Co., 161 Ga. 919, 132 S.E. 535, 1926 Ga. LEXIS 363 (1926). Liability of guarantors when no rate stated. — When guaranty, entered into by separate instrument, does not contain stipulated interest rate, guarantors are liable only for legal rate of 7 percent annually. FDIC v. Willis, 497 F. Supp. 272, 1980 U.S. Dist. LEXIS 17238 (S.D. Ga. 1980). Promise to pay 5 percent for attorney fees should suit arise. — Promissory note contained the promise to 7-4-2 pay 7 percent interest and 5 percent for attorneys fees, if the note should be collected by suit. The promise to pay the attorneys fees is a part of the principal debt. Baxter v. Bates, 69 Ga. 587, 1882 Ga. LEXIS 268 (1882). Facts substantially complying with section. — See Tribble v. Anderson, 63 Ga. 31, 1879 Ga. LEXIS 119 (1879); Green v. Equitable Mtg. Co., 107 Ga. 536, 33 S.E. 869, 1899 Ga. LEXIS 107 (1899); Stewart v. Slocumb, 120 Ga. 762, 48 S.E. 311, 1904 Ga. LEXIS 701 (1904). Objection to statutory rate of interest rather than lower contract rate waived. — Parties waived any objection to the statutory rate of seven percent by failing to object to the rate in the trial court, although the parties’ contract provided for a lower rate. Sovereign Healthcare v. Mariner Health Care Mgmt. Co., 329 Ga. App. 782, 766 S.E.2d 172, 2014 Ga. App. LEXIS 782 (2014), cert. denied, No. S15C0566, 2015 Ga. LEXIS 210 (Ga. Mar. 30, 2015). Class action certiﬁcation. — In a suit challenging the bank’s overdraft fees, the trial court did not abuse the court’s discretion in certifying the class because the legality of fees required the examination of a common set of terms in identical form contracts that applied to all members of the putative class as the claims arising from an interpretation of form agreements were classic cases for treatment as a class action. SunTrust Bank v. Bickerstaff, 349 Ga. App. 794, 824 S.E.2d 717, 2019 Ga. App. LEXIS 214 (2019), cert. denied, No. S19C1080, 2019 Ga. LEXIS 862 (Ga. Dec. 23, 2019). Interest and Other Charges Method of expressing interest rate. — Requirement that the rate of interest be expressed in simple interest terms does not mandate numerical terminology but the requirement is met by the expression of the method of computation of interest by reference to “prime” or other indices such as “base.” 1600 Capital Co. v. Bankers First Fed. Sav. & Loan Ass’n, 187 Ga. App. 504, 370 S.E.2d 668, 1988 Ga. App. LEXIS 739 (1988). Note must state the rate of interest in simple interest terms. Orix Credit 698 Alliance, Inc. v. CIT Group/Equipment Fin., Inc., 230 B.R. 213, 1998 Bankr. LEXIS 1803 (Bankr. M.D. Ga. 1998). Computation of interest on loans for less than or longer than a year. — See Patton v. Bank of La Fayette, 124 Ga. 965, 53 S.E. 664, 1906 Ga. LEXIS 676 (1906), overruled, Sharpe v. DOT, 267 Ga. 267, 476 S.E.2d 722, 1996 Ga. LEXIS 723 (1996). Former Civil Code 1895, § 2886 (see now O.C.G.A. § 7-4-2) spoke of years and not of months. A legal year is 365 days. Patton v. Bank of La Fayette, 124 Ga. 965, 53 S.E. 664, 1906 Ga. LEXIS 676 (1906), overruled, Sharpe v. DOT, 267 Ga. 267, 476 S.E.2d 722, 1996 Ga. LEXIS 723 (1996). Lender’s charge for service not rendered or to be rendered is interest. — Lender’s charge for service which was not in fact rendered or to be rendered the borrower is a charge for use of money advanced and is therefore interest. Williams v. First Bank & Trust Co., 154 Ga. App. 879, 269 S.E.2d 923, 1980 Ga. App. LEXIS 2428 (1980). Interest on liquidated demand not part of debt. — When purchase price of machinery for necessary improvement of public roads becomes a liquidated demand, as by issuance of county warrant drawn on county treasurer by county commissioners, payable to vendor for purchase price, interest which may thereafter lawfully accrue upon warrant is incidental, and is not to be counted as part of debt for which warrant was issued. Marion County v. First Nat’l Bank, 193 Ga. 263, 18 S.E.2d 475, 1942 Ga. LEXIS 375 (1942). Prepayment penalty clause was permissible under O.C.G.A. § 7-4-21(a)(1) since the clause was in reality a charge and use of the term “interest” in the clause was merely a device for determining the amount of the charge. In re Curtis, 83 B.R. 853, 1988 Bankr. LEXIS 863 (Bankr. S.D. Ga. 1988). Escrow account charges in a loan for the purchase of real property did not amount to a disguised interest charge since there was a realistic correspondence between the monthly escrow deposit and the annual tax liability and insurance 7-4-2 premium covering the property. In re Curtis, 83 B.R. 853, 1988 Bankr. LEXIS 863 (Bankr. S.D. Ga. 1988). Lender need not pay interest on funds escrowed for a valid business reason. — There is no requirement as a matter of law for the lender to pay the borrower interest on funds escrowed for valid business reasons such as a reserve for replacement of deteriorating equipment. Knight v. First Fed. Sav. & Loan Ass’n, 151 Ga. App. 447, 260 S.E.2d 511, 1979 Ga. App. LEXIS 2569 (1979). Lease late charge provision. — While a landlord can recover unpaid rent and is also entitled to recover the legal rate of interest on the unpaid rental money, it does not follow that an agreement in a lease providing for a late charge when the rent is not timely paid must comply with O.C.G.A. § 7-4-2. Krupp Realty Co. v. Joel, 168 Ga. App. 480, 309 S.E.2d 641, 1983 Ga. App. LEXIS 2818 (1983). Prejudgment interest. — Having found there was no jury issue as to whether the buyers owed the earnest money payment plus interest to sellers under the contract, as well as under principles of promissory estoppel, the trial court erred in failing to award such interest for the period money was due until ﬁnal judgment. Ware v. Renfroe, 231 Ga. App. 529, 499 S.E.2d 907, 1998 Ga. App. LEXIS 493 (1998). Because the defendant neither ﬁled a compulsory counterclaim nor pled a set-off as an affirmative defense, there was no error in the trial court’s failure to provide for a set-off for lease deposits prior to calculating pre-judgment and post-judgment interest. American Med. Transp. Group, Inc. v. Glo-An, Inc., 235 Ga. App. 464, 509 S.E.2d 738, 1998 Ga. App. LEXIS 1543 (1998). In an action in which the lenders demanded payment of a loan to the debtor before the date of trial, and after a date set by the debtor that the debtor would repay the loan, the lenders were entitled to prejudgment interest up and until the day of trial on the unpaid loan balance at the legal rate of interest. Gray v. King, 270 Ga. App. 855, 608 S.E.2d 320, 2004 Ga. App. LEXIS 1623 (2004). 699 Interest and Other Charges (Cont’d) Trial court erred when the court imposed a ﬁxed rate of interest on a judgment obtained by a class of retirees in their action against the Teachers Retirement System of Georgia, arising from their claims that the retirees were not paid the appropriate amounts for their retirement beneﬁts, as there was no preor post-judgment interest rate established by the written contract between the parties that governed those payments, such that the statutory rates of seven percent and prime plus three percent should have been applied pursuant to O.C.G.A. §§ 7-4-2(a)(1)(A) and 7-4-12(a); another interest rate that was set by the System in a regulation was not applicable to the instant matter. Teachers Ret. Sys. v. Plymel, 296 Ga. App. 839, 676 S.E.2d 234, 2009 Ga. App. LEXIS 172 (2009). Unpublished decision: Because the defendant’s damages on the defendant’s suit on account counterclaim were ﬁxed, certain, and ascertainable making the damages liquidated (plaintiff conceded that the plaintiff received and never paid for $1,017,551 worth of GPS units from the defendant), the district court erred in failing to award the defendant pre-judgment interest at the legal rate established by O.C.G.A. § 7-4-2. Discrete Wireless, Inc. v. Coleman Techs., Inc., 422 Fed. Appx. 777, 2011 U.S. App. LEXIS 7043 (11th Cir. 2011). In breach-of-contract actions in all cases when an amount ascertained would be the damages at the time of the breach, it may be increased by the addition of legal interest from that time until the recovery. Goody Prods. v. Dev. Auth. of Manchester, 320 Ga. App. 530, 740 S.E.2d 261, 2013 Ga. App. LEXIS 229 (2013). In a condemnation action, the property owner was properly awarded prejudgment interest on the purchase price on a second parcel because the price was ﬁxed, certain, and ascertainable under the terms of the parties’ contract such that the debt owed by the county was liquidated and subject to prejudgment interest under O.C.G.A. § 7-4-15. Gwinnett County v. Old Peachtree Partners, LLC, 329 Ga. 7-4-2 App. 540, 764 S.E.2d 193, 2014 Ga. App. LEXIS 688 (2014), cert. denied, No. S15C0517, 2015 Ga. LEXIS 214 (Ga. Mar. 30, 2015). Prejudgment interest in excess of statutory amount. — When the claim was undisputed, the defendant was entitled to prejudgment interest at the rate of seven percent per annum from the date the debt became due and the trial court’s judgment of prejudgment interest of 18% per annum was in excess of the statutorily required amount. Turner Constr. Co. v. Electrical Distribs., Inc., 202 Ga. App. 726, 415 S.E.2d 325, 1992 Ga. App. LEXIS 164 (1992). Trial court erred in awarding the prevailing party in a contract dispute prejudgment interest at the rate of 12 percent per annum; instead, the legal rate of interest of only seven percent per annum pursuant to O.C.G.A. § 7-4-2(a) was appropriate. Murray v. Barrett, 257 Ga. App. 438, 571 S.E.2d 448, 2002 Ga. App. LEXIS 1185 (2002), cert. denied, No. S03C0157, 2002 Ga. LEXIS 1079 (Ga. Nov. 25, 2002). Prejudgment interest on damages exceeded recovery amount authorized by evidence. — Pursuant to instructions from the trial court, while the jury was authorized under O.C.G.A. § 13-6-13 to increase the $24,698.39 in breach of contract damages by adding prejudgment legal interest to damages at the rate of seven percent per annum simple interest from the date of the breach, the jury’s general verdict on the breach of contract claim in amount of $42,690.05 was in excess of any recovery authorized by the evidence; as a result, the judgment entered on the verdict had to be reversed and the case remanded for new trial. Chacon v. Holcombe, 290 Ga. App. 767, 660 S.E.2d 851, 2008 Ga. App. LEXIS 408 (2008). Deposits in court not subject to prejudgment and postjudgment interest. — In a contract action, a party was not entitled to prejudgment and postjudgment interest when deposits were made pursuant to the requirements of O.C.G.A. § 9-11-67. Sacha v. Coffee Butler Serv., Inc., 215 Ga. App. 280, 450 S.E.2d 700 704, 1994 Ga. App. LEXIS 1221 (1994), cert. denied, No. S95C0456, 1995 Ga. LEXIS 464 (Ga. Feb. 23, 1995). No writing necessary for interest when admission by debtor. — Trial court did not err in awarding a creditor a money judgment, plus interest, because the interest owed was established by the debtor’s own admission on the stand; in a case when the interest owed is established by a party’s own admission on the stand, no writing is necessary. Allen v. Santana, 303 Ga. App. 844, 695 S.E.2d 314, 2010 Ga. App. LEXIS 422 (2010). Interest rate not in excess of maximum. — Trial court did not err by rejecting a debtor’s argument that a lender’s temporary acceptance of lowered payments without waiving full payment transformed the loan into a usurious transaction because the interest rate of the loan was not in excess of the maximum applicable legal rate of 5 percent per month under O.C.G.A. § 7-4-18(a). Latimore v. Vatacs Group, Inc., 317 Ga. App. 98, 729 S.E.2d 525, 2012 Ga. App. LEXIS 567 (2012). Compounding interest. — In this breach of contract action, it was error to compound the interest because the parties’ agreement stated that late amounts under the contract would “be subject to interest at the lesser of 1.5% per month or the maximum allowed by applicable law.” Caradigm USA LLC v. PruittHealth, Inc., 964 F.3d 1259, 2020 U.S. App. LEXIS 21368 (11th Cir. 2020). Usury 1. In General Usury deﬁned. — Usury is excess over legal interest charged by lender for use of the lender’s money. Sledd v. Pilot Life Ins. Co., 52 Ga. App. 326, 183 S.E. 199, 1935 Ga. App. LEXIS 159 (1935). Effect of criminal usury. — Loan violative of the criminal usury statute is illegal with the result that the lender forfeits the interest but may collect the principal. Norris v. Sigler Daisy Corp., 260 Ga. 271, 392 S.E.2d 242, 1990 Ga. LEXIS 223 (1990). Intent required. — Under law of Georgia, intent to circumvent usury laws 7-4-2 is prerequisite to existence of usury. Camilla Cotton Oil Co. v. Spencer Kellogg & Sons, 257 F.2d 162, 1958 U.S. App. LEXIS 4460 (5th Cir. 1958). Four elements of usurious transaction. — There are four elements of a usurious transaction under Georgia law: (1) loan or forbearance of money, either express or implied; (2) upon understanding that principal shall or may be returned; and that (3) for such loan or forbearance a greater proﬁt than is authorized by law shall be paid; and (4) that contract was made with intent to violate the law. Element of intent may be implied if all other elements are expressed upon face of contract. Bank of Lumpkin v. Farmers State Bank, 161 Ga. 801, 132 S.E. 221, 1926 Ga. LEXIS 336 (1926); Duderwicz v. Sweetwater Sav. Ass’n, 595 F.2d 1008, 1979 U.S. App. LEXIS 14500 (5th Cir. 1979); Hershiser v. Yorkshire Condominium Ass’n, 201 Ga. App. 185, 410 S.E.2d 455, 1991 Ga. App. LEXIS 1292 (1991). Substance of transaction examined in determining whether usurious. — In determining whether contract is usurious, substance of transaction will be critically inspected and analyzed; for name by which transaction is denominated is altogether immaterial if it appears that a loan of money was the basis of agreement which is under consideration. Bank of Lumpkin v. Farmers State Bank, 161 Ga. 801, 132 S.E. 221, 1926 Ga. LEXIS 336 (1926). Court must look not at form and words, but at substance of transaction; and as, on the one hand, it should not pay attention to words of transaction, or manner in which the transaction was negotiated, if substance of it went to defeat the statute against usury, so, on the other hand, it ought not to rely upon words or form of transaction, if in substance such transaction was legal. Murdock Acceptance Corp. v. Wagnon, 587 F.2d 764, 1979 U.S. App. LEXIS 17643 (5th Cir. 1979). Usurious interest violates section. — Usury being an excess of legal interest, it was a violation of former Code 1933, § 57-101 to reserve and take usury or to contract to reserve and take usury. Newcomb v. Niskey’s Lake, Inc., 190 Ga. 701 Usury (Cont’d) 1. In General (Cont’d) 565, 10 S.E.2d 51, 1940 Ga. LEXIS 531 (1940). It was a violation to reserve and take usurious interest, or to contract to reserve and take usurious interest. Duderwicz v. Sweetwater Sav. Ass’n, 595 F.2d 1008, 1979 U.S. App. LEXIS 14500 (5th Cir. 1979). Effect of repealing usury limit. — In the absence of a savings clause, repeal of a usury limit operates retroactively to lift the penalty for usury. Doyle v. Southern Guar. Corp., 795 F.2d 907, 1986 U.S. App. LEXIS 27236 (11th Cir. 1986). When defense of usury was not raised until after the 1983 amendment of O.C.G.A. § 7-4-2 became effective, the interest rates at issue are legal so long as those rates conform to the limits contained in § 7-4-2(a)(1). Ward v. Hudco Loan Co., 254 Ga. 294, 328 S.E.2d 729, 1985 Ga. LEXIS 688 (1985). Lender’s 49 percent economic interest. — In a class action suit seeking to hold a lender liable for payday loans, the trial court did not err in concluding that genuine issues of material fact existed as to whether the lender was the true lender of the loans made after May 14, 2004, because evidence was presented sufficient to create a genuine issue of material fact regarding whether the lender actually received only a 49 percent economic interest for the lender’s services and even if the lender did so, whether the lender nevertheless, by contrivance, device, or scheme, attempted to avoid the provisions of O.C.G.A. § 16-17-2(a). Ga. Cash Am. v. Greene, 318 Ga. App. 355, 734 S.E.2d 67, 2012 Ga. App. LEXIS 914 (2012), cert. denied, No. S13C0436, 2013 Ga. LEXIS 165 (Ga. Feb. 18, 2013). Amortization of initial charges. — Initial charges in the form of discount points and other interest charges during the ﬁrst month of the loan should be amortized over the life of the loan to calculate what interest rate was charged “per month.” Johnson v. Fleet Fin., Inc., 785 F. Supp. 1003, 1992 U.S. Dist. LEXIS 2586 (S.D. Ga. 1992). Actual declining principal balance method should be used in determining 7-4-2 whether irregularly amortized loan is usurious because usury on a particular loan can only be determined by proper reference to the actual outstanding principal balance on that loan. Southern Fed. Sav. & Loan Ass’n v. Lyle, 249 Ga. 284, 290 S.E.2d 455, 1982 Ga. LEXIS 805 (1982). Actual performance of usurious agreement not required. — Taint of usury results not from payment of usurious interest, but from agreement to do so, whether performed or unperformed. Duderwicz v. Sweetwater Sav. Ass’n, 595 F.2d 1008, 1979 U.S. App. LEXIS 14500 (5th Cir. 1979). Terms of contract rather than actual turn of events are to be used in computing usury. Knight v. First Fed. Sav. & Loan Ass’n, 151 Ga. App. 447, 260 S.E.2d 511, 1979 Ga. App. LEXIS 2569 (1979). Usurious contracts unlawful only as to usurious interest. — Contracts to pay usury are unlawful, but only as to the usurious interest; but mere illegality in consideration is not sufficient to defeat rights of an innocent holder. Weed v. Gainesville, Jefferson & S.R.R., 119 Ga. 576, 46 S.E. 885, 1904 Ga. LEXIS 292 (1904). Substance of transaction controls. — Law recognizes a seller’s right to make a difference in the seller’s cash price and the seller’s time price for the seller’s property; and, though in a given instance this difference may exceed the maximum allowable rate, usury laws are not applicable. If, however, property is sold at a cash price, and time is given by vendor to purchaser upon a portion of the purchase money, and a greater rate of interest than that allowed by law is charged on such deferred payments, the contract is usurious. Murdock Acceptance Corp. v. Wagnon, 587 F.2d 764, 1979 U.S. App. LEXIS 17643 (5th Cir. 1979). While it is lawful and not usurious to charge one price for property sold for cash and a higher price for same property if sold on credit, if contract is that property be sold at cash valuation, and that certain payments are to be deferred in consideration of a greater rate of interest than that allowed by law, such contract is usurious. Irvin v. Mathews, 75 Ga. 739, 1885 Ga. LEXIS 219 (1885); Rushing v. Worsham & 702 Co., 102 Ga. 825, 30 S.E. 541, 1898 Ga. LEXIS 770 (1898); Ozmore v. Coram, 133 Ga. 250, 65 S.E. 448, 1909 Ga. LEXIS 201 (1909); Plastics Dev. Corp. v. Flexible Prods. Co., 112 Ga. App. 460, 145 S.E.2d 655, 1965 Ga. App. LEXIS 741 (1965). Section inapplicable to note outside provisions. — Defendant did not prevail on defendant’s claim of usury because the amount of the note, $2.3 million, is outside the provisions of Georgia’s usury statute. Barton v. Marubeni Am. Corp., 204 Ga. App. 346, 419 S.E.2d 342, 1992 Ga. App. LEXIS 817 (1992). Parol evidence rule inapplicable to usurious contracts. — While it is well established that parol evidence cannot be used to add to or change terms of valid written contract, the rule does not apply to contract which is usurious and, therefore, invalid. Pickens Inv. Co. v. Jones, 82 Ga. App. 850, 62 S.E.2d 753, 1950 Ga. App. LEXIS 1223 (1950). Parol promise found valid. — When a promissory note on the note’s face bore interest at 6 percent, and, after the note fell due and was unpaid, the makers in consideration of the holders delaying to enforce collection agreed in parol to pay 8 percent interest thereon and for two years interest was paid at this rate, such payments were valid, and interest in excess of 6 percent could neither be recovered, nor thereafter applied as a credit on the principal of the note. Strickland v. Bank of Cartersville, 141 Ga. 565, 81 S.E. 886, 1914 Ga. LEXIS 57 (1914). Showing required when loan made at less than maximum rate. — When loan had been made at less than maximum rate of interest, the debtor must prove that escrow arrangement was a device to exact interest in excess of the lawful rate, and the debtor must show the exact amount of claimed excess and how the excess was computed. Knight v. First Fed. Sav. & Loan Ass’n, 151 Ga. App. 447, 260 S.E.2d 511, 1979 Ga. App. LEXIS 2569 (1979). To purge contract of usury it must be wholly abandoned or cancelled, and a new obligation undertaken containing no part of the usury. Duderwicz v. Sweetwater 7-4-2 Sav. Ass’n, 595 F.2d 1008, 1979 U.S. App. LEXIS 14500 (5th Cir. 1979). Lender cannot unilaterally purge transaction of taint. — Allegedly usurious loan transaction cannot be purged of usurious taint through unilateral action of lender. Duderwicz v. Sweetwater Sav. Ass’n, 595 F.2d 1008, 1979 U.S. App. LEXIS 14500 (5th Cir. 1979). Under the look-through rule, a hypothetical coercive claim was the basis for federal jurisdiction over the petitioner bank’s Federal Arbitration Act petition, but petitioner payday loan companies’ arbitration petition was precluded by a related underlying state court judgment holding the companies in contempt and, striking the companies’ arbitration defenses under O.C.G.A. § 9-11-37(b)(2) to respondent borrower’s suit alleging violations of Georgia’s usury statute, O.C.G.A. § 7-4-1 et seq., Georgia’s Industrial Loan Act, O.C.G.A. § 7-3-1 et seq.; and Georgia’s Racketeer Inﬂuenced and Corrupt Organizations statute, O.C.G.A. § 16-14-1 et seq. Cmty. State Bank v. Strong, 651 F.3d 1241, 2011 U.S. App. LEXIS 17767 (11th Cir. 2011), cert. denied, 568 U.S. 813, 133 S. Ct. 101, 184 L. Ed. 2d 22, 2012 U.S. LEXIS 7369 (2012). 2. Transactions Held Usurious Only when prepaid sums and stipulated interest together exceed lawful interest is a transaction usurious. Scheil v. Georgia Fed. Sav. & Loan Ass’n, 154 Ga. App. 714, 269 S.E.2d 881, 1980 Ga. App. LEXIS 2353 (1980). Taking or reserving of maximum interest in advance is usurious. — Taking or reserving in advance of interest at highest legal rate, whether in short or long term loan, is usurious. Haley v. Covington, 19 Ga. App. 782, 92 S.E. 297, 1917 Ga. App. LEXIS 355 (1917); Kent v. Hibernia Sav., Bldg. & Loan Ass’n, 190 Ga. 764, 10 S.E.2d 759, 1940 Ga. LEXIS 567 (1940). Deed to secure usurious loan is void. — Reserving of interest in advance at highest legal rate on a loan, whether it be a short or long-term loan, is usurious; and deed to land given to secure 703 Usury (Cont’d) 2. Transactions Held Usurious (Cont’d) promissory note for such a loan is void on account of usury. Loganville Banking Co. v. Forrester, 143 Ga. 302, 84 S.E. 961, 1915 Ga. LEXIS 408 (1915); Reese v. Bloodworth, 146 Ga. 355, 91 S.E. 120, 1917 Ga. LEXIS 303 (1917). Commission deducted from loan is usurious. — Charge by lender as a commission, deducted from a loan evidenced by bonds of the borrower, which carry full rate of lawful interest was usury. Newcomb v. Niskey’s Lake, Inc., 190 Ga. 565, 10 S.E.2d 51, 1940 Ga. LEXIS 531 (1940). Combining loans to reach usury limit prohibited. — Former § 7-4-7, which removed the former nine percent rate ceiling on loans exceeding $100,000 in certain situations, was not applicable when there were eleven separate loans and notes, none of which amounted to $100,000, although the total principal balance was over $100,000, and although the borrower paid the interest on all eleven notes with one check. Henson v. Columbus Bank & Trust Co., 770 F.2d 1566, 1985 U.S. App. LEXIS 23187 (11th Cir. 1985) (decided under former § 7-4-7). Escrow fund used as device to extract excess interest is usurious. — Escrow fund is usurious only when the lender’s requirement that the borrower maintain such a deposit is in fact merely a scheme or device by which the intent to extract excess interest is concealed. Knight v. First Fed. Sav. & Loan Ass’n, 151 Ga. App. 447, 260 S.E.2d 511, 1979 Ga. App. LEXIS 2569 (1979). Stipulation to pay taxes on bonds is usurious. — Stipulation in bonds to pay, in addition to lawful interest, a percentage of federal income taxes that might be imposed upon the bonds is usurious. Newcomb v. Niskey’s Lake, Inc., 190 Ga. 565, 10 S.E.2d 51, 1940 Ga. LEXIS 531 (1940). Petition sufficiently pleading usury. — Petition alleging: (1) sum upon which paid; (2) time when contract was made; (3) when payable; and (4) amount of usury agreed upon, sufficiently pleads 7-4-2 usury. Pickens Inv. Co. v. Jones, 82 Ga. App. 850, 62 S.E.2d 753, 1950 Ga. App. LEXIS 1223 (1950). Condition precedent to loan charging maximum rate that borrower pay another’s debt. — When lender requires, as condition precedent to making loan upon which full legal rate of interest is expressly charged, that the borrower shall assume and pay off a promissory note held by the lender against one who is known by the lender to be insolvent, and whose debt the borrower is under no obligation to pay, the transaction is usurious. Bishop v. Exchange Bank, 114 Ga. 962, 41 S.E. 43, 1902 Ga. LEXIS 848 (1902). Indeﬁnite amount. — Portion of the judgment awarding interest at a rate greater than the seven percent was vacated and the case was remanded to the trial court for recalculation of the interest at the correct rate because with an indeﬁnite rate expressed in the subdivision declaration, the seven percent per year rate mandated by O.C.G.A. § 7-4-2(a)(1)(A) governed the rate of interest allowed by the declaration. Lend A Hand Charity, Inc. v. Ford Plantation Club, Inc., 338 Ga. App. 594, 791 S.E.2d 180, 2016 Ga. App. LEXIS 504 (2016). 3. Transactions Held Not Usurious Excess over legal rate paid for other considerations not usurious. — When excess over legal interest is paid for other good and valuable considerations beyond mere use of money, it is not usury. Sledd v. Pilot Life Ins. Co., 52 Ga. App. 326, 183 S.E. 199, 1935 Ga. App. LEXIS 159 (1935). Minor mistake held not usury. — Contract not usurious when by mistake a few cents more than legal rate is charged. Rushing v. Willingham, 105 Ga. 166, 31 S.E. 154, 1898 Ga. LEXIS 471 (1898); Loganville Banking Co. v. Forrester, 143 Ga. 302, 84 S.E. 961, 1915 Ga. LEXIS 408 (1915). Interest charged on interest due is not usurious. — Contract to pay maximum rate of interest per annum semi-annually, with interest on semi-annual payments of interest after due, did not constitute usury. Pendergrass 704 v. New York Life Ins. Co., 163 Ga. 671, 137 S.E. 36, 1927 Ga. LEXIS 45 (1927). Interest not usurious based on principal. — When the principal amount of the homeowners’ mortgage was $61,850 with accrued interest at the rate of 13 percent per year, this interest was not in violation of O.C.G.A. § 7-4-2. English v. Liberty Mtg. Corp., 205 Ga. App. 141, 421 S.E.2d 286, 1992 Ga. App. LEXIS 1078 (1992). Interest rate based upon a daily charge. — Interest rate based upon a daily charge equal to the annual rate divided by 360 is not usurious per se. Mom Corp. v. Chattahoochee Bank, 203 Ga. App. 847, 418 S.E.2d 74, 1992 Ga. App. LEXIS 564 (1992). Interest from maturity upon principal and lawful interest not usurious. — It is lawful to include in a promissory note amount of interest at legal rate, which will be due at its maturity, and to provide that sum represented by principal and such interest shall bear interest at maximum rate per annum from maturity. McCrary v. Woodard, 122 Ga. 793, 50 S.E. 941, 1905 Ga. LEXIS 328 (1905). Note covering loan, lawful interest, and antecedent debt not usurious. — When debtor who has been adjudicated bankrupt, but who has not obtained a discharge, arranges with one of the debtor’s creditors for a loan of money on condition that the debtor will execute a note to cover the loan, with lawful interest and also amount of the debtor’s previous indebtedness to creditor, such transaction is a valid and enforceable renewal of an antecedent debt, and a note is not usurious because the note contains a promise to pay the antecedent debt. Cameron v. Meador-Pasley Co., 39 Ga. App. 712, 148 S.E. 309, 1929 Ga. App. LEXIS 534 (1929). Compensation for professional services by lender not usurious. — If sum was paid bona ﬁde by way of compensation for professional services rendered by a lender, and did not enter into consideration moving lender to make loan, the transaction was not usurious. Sanders v. Nicolson, 101 Ga. 739, 28 S.E. 976, 1897 Ga. LEXIS 312 (1897). Charge for insurance on security for debt not usurious. — When 7-4-2 property is conveyed to secure a debt, a stipulation that the borrower shall, in addition to legal interest, pay insurance premiums thereon is not usurious. New England Mtg. Sec. Co. v. Gay, 33 F. 636, 1888 U.S. App. LEXIS 2031 (C.C.D. Ga. 1888), cert. dismissed, 145 U.S. 123, 12 S. Ct. 815, 36 L. Ed. 646, 1892 U.S. LEXIS 2125 (1892). Premium for insurance required on collateral security for loan not counted as part of interest. Sledd v. Pilot Life Ins. Co., 52 Ga. App. 326, 183 S.E. 199, 1935 Ga. App. LEXIS 159 (1935). Forfeiture of Interest Usury works forfeiture of all interest under the law. Newcomb v. Niskey’s Lake, Inc., 190 Ga. 565, 10 S.E.2d 51, 1940 Ga. LEXIS 531 (1940). Effect of device by which lender exacts usurious interest. — If agreement is a mere device or subterfuge by which one party was permitted to charge a higher than lawful rate of interest for a loan of money, the agreement would be usurious, and the lender can collect no interest at all. Stewart v. G. L. Miller & Co., 161 Ga. 919, 132 S.E. 535, 1926 Ga. LEXIS 363 (1926). Interest not forfeited when claim amended to legal rate. — Plaintiff did not forfeit any right to interest on an open account for seeking a higher interest rate than that allowed by law since, before trial, the plaintiff amended the plaintiff’s pleadings to seek the statutorily permitted rate of interest on commercial accounts. Belvin v. Houston Fertilizer & Grain Co., 169 Ga. App. 100, 311 S.E.2d 526, 1983 Ga. App. LEXIS 2993 (1983). Written Contract Absent speciﬁcation in writing, interest exceeding seven percent per annum may not be collected. Cosby v. A.M. Smyre Mfg. Co., 158 Ga. App. 587, 281 S.E.2d 332, 1981 Ga. App. LEXIS 2324 (1981). Portion awarding interest in a foreclosure judgment was vacated and the case remanded for recalculation of the interest rate pursuant to O.C.G.A. § 7-4-2 because § 7-4-2 governed the rate of interest in contracts when the interest rate was not 705 7-4-2 Written Contract (Cont’d) speciﬁed and since the maximum legal rate speciﬁed in the declaration was not deﬁnite and ascertainable, the trial court erred in awarding 18 percent interest rather than the seven percent provided for by § 7-4-2. Northside Bank v. Mountainbrook of Bartow County Homeowners Ass’n, 338 Ga. App. 126, 789 S.E.2d 378, 2016 Ga. App. LEXIS 449 (2016). Writing requirement applies only to executory promises. — Former Civil Code 1910, § 3426, which provided that a contract to pay interest in excess of seven percent must be in writing, applied only to a contract containing an executory promise to pay such excess interest, and did not apply to a contract when such excess interest had been actually paid and accepted in consideration of a promise to extend time of payment of the principal sum. Lewis v. Citizens’ & S. Bank, 31 Ga. App. 597, 121 S.E. 524, 1924 Ga. App. LEXIS 83 (1924), aff’d, Citizens’ & Southern Bank v. Lewis, 159 Ga. 551, 126 S.E. 392, 1925 Ga. LEXIS 17 (1925). Designation of interest rate in terms of “prime” was “in writing” and thereby complied with laws of usury. Stewart v. National Bank, 174 Ga. App. 892, 332 S.E.2d 19, 1985 Ga. App. LEXIS 1990 (1985). Speciﬁcation of interest in handwriting of debtor, signed by creditor, is sufficient. Wofford v. Wyly, 72 Ga. 863, 1884 Ga. LEXIS 334 (1884). One seeking eight percent interest on alleged note must sue upon written instrument providing therefor. Ramsey v. Langley, 86 Ga. App. 544, 71 S.E.2d 863, 1952 Ga. App. LEXIS 1003 (1952). interest on accelerated balance was limited to seven percent per annum, rather than nine percent which was sought, since there was no language in the note authorizing the collection of a higher rate upon declaration of default. Atlantic Bank & Trust Co. v. Fox, 157 Ga. App. 673, 278 S.E.2d 474, 1981 Ga. App. LEXIS 1961 (1981). Interest after Maturity Rate of interest speciﬁed in contract runs after maturity as well as before. Silvey v. McCool, 86 Ga. 1, 12 S.E. 175, 1890 Ga. LEXIS 166 (1890); Neal v. Brockhan, 87 Ga. 130, 13 S.E. 283, 1891 Ga. LEXIS 109 (1891). Post-maturity interest rate not penalty when same as loan interest rate. — Post-maturity interest rate on outstanding balance does not constitute penalty or compensation for delay when rate is the same as interest rate of loan itself. Whitﬁeld v. Termplan, Inc., 651 F.2d 383, 1981 U.S. App. LEXIS 11143 (5th Cir. 1981). Interest called for will extend only if contracted for. — When promissory note contained a promise to pay principal, with interest from date at eight percent, in the absence of agreement, such rate will not extend beyond maturity of note, unless terms of the note itself expressly so provide. Sherwood v. Moore, 35 F. 109, 1888 U.S. App. LEXIS 2422 (C.C.D. Ga. 1888). Attorney Fees Reasonable fee to lender’s attorney for title examination was not considered commission for negotiation of loan. McCall v. Herring, 118 Ga. 522, 45 S.E. 442 (1903). Acceleration Jury/Court Determinations By accelerating payment on notes payable on or before maturity, maker avoids paying unearned interest. Garner v. Sisson Properties, Inc., 198 Ga. 203, 31 S.E.2d 400, 1944 Ga. LEXIS 381 (1944). Interest on accelerated balance limited to seven percent absent authorization. — In suit to recover balance on promissory note, award of Unless apparent on face of contract, question of usury is for jury. — Question of whether one intends to exact usury by a contrivance or device or whether the alleged charge is bona ﬁde for actual services is for the determination of the jury. Bank of Lumpkin v. Farmers State Bank, 161 Ga. 801, 132 S.E. 221, 1926 Ga. LEXIS 336 (1926). 706 If it is apparent on the face of the contract, the court may declare it to be usurious, but if doubtful question must be resolved by the jury. Pickens Inv. Co. v. Jones, 82 Ga. App. 850, 62 S.E.2d 753, 1950 Ga. App. LEXIS 1223 (1950). It is incumbent upon one attacking loan to show jury that it is in fact usurious; intent of lender to charge and collect more than legal rate of interest in violation of law is a question for the jury. Knight v. First Fed. Sav. & Loan Ass’n, 151 Ga. App. 447, 260 S.E.2d 511, 1979 Ga. App. LEXIS 2569 (1979). Claim that transaction is a device to cover up usury raises jury issue. — When a transaction is not per se usurious, if it is claimed to be a device to cover up a charge of usury, a question of fact as well as a question of law is raised and the question should be submitted to the jury. Knight v. First Fed. Sav. & Loan Ass’n, 151 Ga. App. 447, 260 S.E.2d 511, 1979 Ga. App. LEXIS 2569 (1979). Section 7-4-12 inapplicable to awards of special master preceding judgment. — Twelve percent rate of O.C.G.A. § 7-4-12 applies only to judgments; any interest accruing under O.C.G.A. § 22-2-113 for that period of 7-4-2 time following an award of the special master until the jury verdict and entry of ﬁnal judgment is to be at legal interest rate established by § 7-4-2. City of Atlanta v. Wright, 159 Ga. App. 809, 285 S.E.2d 250, 1981 Ga. App. LEXIS 2824 (1981). Court orders to pay money bear interest at seven percent. — Orders absolute given by inferior courts of this state for payment of money to other persons in liquidation of debts due by those courts draw interest just as other liquidated demands do, that is, those when sum is ﬁxed, ascertained, and agreed to be paid bear interest at the rate of seven percent per annum. State ex rel. Greer v. Speer, 33 Ga. 93 (1864). Award of prejudgment interest in federal court. — Admiralty courts have discretion in awarding prejudgment interest so federal rather than state law controls, and there is no abuse of discretion in a federal court’s award of ten percent prejudgment interest. The fact that the suit was brought under the court’s diversity jurisdiction does not affect this conclusion. Kilpatrick Marine Piling v. Fireman’s Fund Ins. Co., 795 F.2d 940, 1986 U.S. App. LEXIS 27750 (11th Cir. 1986).