APPEAL from the Circuit Court of Cook County; the Hon. HARRY
H. MALKIN, Judge, presiding.
MR. JUSTICE ENGLISH DELIVERED THE OPINION OF THE COURT:
Defendants appeal from a $335 judgment entered against them for a deficiency due after repossession and resale of a used 1962 Oldsmobile.
On October 8, 1968, defendants entered into a retail installment contract with plaintiff for the purchase of a used 1962 Oldsmobile at a price of $630 less $100 down payment. The net balance of $530, plus a finance charge of $175 (totaling $705), was to be paid by defendants in 47 weekly installments of $15 each beginning October 12, 1968, and ending August 30, 1969. In June, 1969, defendants, who were behind in their payments, took the car to plaintiff's place of business and left it there for repairs because, according to Lee Johnson's uncontradicted testimony, it would not operate. He also testified that plaintiff told defendants that he would repair the automobile for them.
Plaintiff testified that on June 9, 1969, he mailed a notice of resale to defendant Lee Johnson via certified mail to his place of employment. No notice of resale was sent to defendant Rosa Johnson, and Lee Johnson denied receipt of the notice of resale. The post office receipt was signed by Irving Silverman at the address of defendant's employer, but there is no evidence that defendant in fact received the letter.
On April 15, 1970, plaintiff sold the 1962 Oldsmobile for $50. At the time of the sale, defendants had paid 13 installments totaling $195 and still owed $510.
On September 10, 1970, judgment was entered by confession in the amount of $579.02, which was the amount due under the contract, plus costs. On October 14, 1970, the court, sitting without a jury, confirmed the judgment by confession but only in the amount of $510, less $50 proceeds from the resale, less $175 finance charges, plus $50 attorneys' fees, for a total of $335. From that judgment defendants appeal.
Defendants argue that the retail installment contract upon which plaintiff's claim is based, is illegal and may not be enforced against defendants because it requires defendants to pay a time price differential in excess of that permitted by Section 21 of the Motor Vehicle Retail Installment Sales Act.
Ill. Rev. Stat. 1967, ch. 121 1/2, par. 562.9, defines time price differential as:
"the amount, however denominated or expressed, which a retail buyer contracts to pay or pays for the privilege of purchasing a motor vehicle in installments, exclusive of any amounts charged for insurance, official fees, delinquency charges, attorneys' fees, court costs, or collection expenses."
Under the terms of the contract in question, the time price differential is listed as a "finance charge" amounting to $175. Since the principal balance due after the down payment is $530 and $175 is charged in less than one year (47 weeks) for the privilege of buying in installments, the effective rate of interest on the sale is more than 36% per year.
Ill. Rev. Stat. 1967, ch. 121 1/2, par. 581, states:
"A retail installment contract may provide for, and the seller or holder may charge, collect and receive a time price differential computed on the entire principal balance as determined in accordance with this Act from the date of the contract to the due date of the final installment at not exceeding the following rates:
Class 4 Any used motor vehicle not in Class 2 or Class 3 and designated by the manufacturer by a year model more than 4 years prior to the year in which the sale is made $16 per $100 per year."
Since the automobile in the present case was six years old at the time of the sale, a time price differential of $36 per $100 clearly violates the statute. Beside constituting a misdemeanor, a person who draws the contract and thereby violates the act is barred from recovering any time price differential in connection with the ...