Procedural Posture
Appellant, a beneficial owner of a financial corporation that had issued promissory notes, challenged a judgment entered by the Superior Court of San Mateo County, California, in favor of respondent lenders on appellant's derivative causes of action for usury after the trial court granted respondents' motion for judgment on the pleadings.
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The financial corporation was a member of a "class of persons authorized by statute" as exempt from the usury law, namely licensed financial lenders as provided under Fin. Code, § 22002. The court disagreed with appellant's assertion that, as a licensed financial lender, only the financial corporation's "loans and forbearances" were exempt from the usury restrictions, not its "obligations" to the noteholders. The court held that the phrase "any obligations of, loans made by, or forbearances" in Cal. Const., art. XV, § 1, did not apply solely to building and loan associations, but to all exempt classes that followed it. The language of the real estate exemption showed that the legislature, by choosing not to limit the class-based exemptions only to "loans," knew how to carve out a narrower, transaction-based exemption when it wished to do so. The financial corporation was neither a necessitous, impecunious borrower nor a helpless indigent. Rather, it was a licensed finance lender specializing in accounts-receivable lending. The class-wide exemption accorded to licensed finance lenders exempted from the usury law the financial corporation's obligations as well as its loans.
Outcome
The court affirmed the trial court's entry of judgment on the pleadings in favor of respondents.
Procedural Posture
Appellant, a beneficial owner of a financial corporation that had issued promissory notes, challenged a judgment entered by the Superior Court of San Mateo County, California, in favor of respondent lenders on appellant's derivative causes of action for usury after the trial court granted respondents' motion for judgment on the pleadings.
Overview: what is the minimum wage in san diego
The financial corporation was a member of a "class of persons authorized by statute" as exempt from the usury law, namely licensed financial lenders as provided under Fin. Code, § 22002. The court disagreed with appellant's assertion that, as a licensed financial lender, only the financial corporation's "loans and forbearances" were exempt from the usury restrictions, not its "obligations" to the noteholders. The court held that the phrase "any obligations of, loans made by, or forbearances" in Cal. Const., art. XV, § 1, did not apply solely to building and loan associations, but to all exempt classes that followed it. The language of the real estate exemption showed that the legislature, by choosing not to limit the class-based exemptions only to "loans," knew how to carve out a narrower, transaction-based exemption when it wished to do so. The financial corporation was neither a necessitous, impecunious borrower nor a helpless indigent. Rather, it was a licensed finance lender specializing in accounts-receivable lending. The class-wide exemption accorded to licensed finance lenders exempted from the usury law the financial corporation's obligations as well as its loans.
Outcome
The court affirmed the trial court's entry of judgment on the pleadings in favor of respondents.
