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Kingzio v Bank of Hawaii [1975] TTLawRp 28; 7 TTR 343 (4 December 1975)

7 TTR 343

HUMIKO KINGZIO and EICHI MOBEL, Plaintiffs-Appellees

v.

THE BANK OF HAWAII, KOROR BRANCH, KOROR, PALAU, Defendant-Appellant

Civil Appeal No. 109

Appellate Division of the High Court

Palau District

December 4, 1975

Action to recover interest charged at rate in excess of lawful limit on loans of more than $300. The Appellate Division of the High Court, Williams, Associate Justice, held that it was improper for District Court to grant summary judgment to plaintiffs where lending bank used "Block/Add on" method of computation and charged rates of interest varying from 6% to 12%, depending on type of loan and when loan was made, and where there were many instances where actual rate of interest specified in original loan contract was higher than 1% per month on balance due but none of loans in question exceeded usury rate of 2% per month on balance due prohibited by statute.

1. Usury—Money Had and Received—Recovery

Common law action for money had and received is available in an appropriate case to recover usurious interest paid; however, availability of this common law remedy exists only if it is declared illegal to collect excess interest or statute provides that contract to collect excess interest above stated rate is void in whole or in part.

2. Usury—Money Had and Received—Recovery

Where statute setting legal interest limit does not impose criminal sanctions or declare contract above stated rate void, but merely prohibits courts from lending their aid to enforcement of contracts for more than stated rate, common law right to maintain action to recover interest in excess of stated rate does not exist. (33 TTC § 251)

3. Usury—Money Had and Received—Recovery

Trial court erred in granting borrowers summary judgment to recover interest paid in excess of 1% per month on loans exceeding $300 where lending bank used "Block/Add on" method of computation and charged rates of interest varying from 6% to 12%, depending on type of loan and when loan was made, and where there were many instances where actual rate of interest specified in original loan contract was higher than 1% per month on balance due but none of loans in question exceeded usury rate of 2% per month on balance due. (33 TTC §§ 251, 253)

Before BURNETT, Chief Justice, HEFNER,