Leave to appeal denied, 386 Mich. 764.
R.B. BURNS, J.
This case was submitted to the trial judge on the basis of stipulated facts pursuant to GCR 1963, 111.10.
The plaintiffs purchased real estate from the defendants on land contract. Plaintiffs alleged that the interest charges on the land purchases were usurious and thus uncollectible. Plaintiffs further claimed that defendants attempted to disguise the interest charges by labeling them "time price differentials". The trial judge ruled that the transactions in question did not involve usury.
Plaintiffs were given the opportunity to either pay cash for the properties or to purchase them on credit. The difference between the higher time price and the cash price is referred to as a "time price differential." Plaintiffs, who elected to purchase the real estate on "time," claim that the time price differential is in effect illegally-charged interest.
Prior case law refutes plaintiffs' claims. This Court has previously determined that time price differentials are generally immune from usury laws:
"That a seller in Michigan may establish a credit price is not denied and indeed upheld in Attorney General v. Contract Purchase Corporation (1950), 327 Mich. 636, which points out that unless the sale and purchase of property is a mere pretense, the seller may charge a greater price for goods bought on credit than for cash without rendering the transaction
Prior to the Matthews case the Supreme Court had reached the same conclusion. Hartwick Lumber Co. v. Perlman (1928), 245 Mich. 3; Keefe v. Bush & Lane Piano Co. (1929), 247 Mich. 82.
Plaintiffs argue that by statute enacted subsequent to the Matthews opinion the legislature indicated that a time price differential, in effect and in substance, was interest. The usury statute plaintiffs refer to reads in part:
"That the interest of money shall be at the rate of $5.00 upon $100.00 for a year, and at the same rate for a greater or less sum, and for a longer or shorter time, except that in all cases it shall be lawful for the parties to stipulate in writing for the payment of any rate of interest, not exceeding 7% per annum. This act shall not apply to the rate of interest on any note, bond or other evidence of indebtedness issued by any corporation, association or person, the issue and rate of interest of which have been expressly authorized by the Michigan public service commission or the corporation and securities bureau of the department of commerce, or is regulated by any other law of this state, or of the United States, nor shall it apply to any time price differential which may be charged upon sales of goods or services on credit." (Emphasis supplied.) PA 1966, No 326 § 1 (MCLA 1971 Cum Supp § 438.31 [Stat Ann 1971 Cum Supp § 19.15(1)]).
Plaintiffs' claim that the legislature expressly indicated that a time price differential was in fact
The statutory language plaintiffs refer to merely confirms the prior case law's exemption of time price differentials from usury principles. The Legislature could have easily expressed its desire to include differentials in the usury statute if it had so desired; instead it expressly exempted such a classification from the purview of the statute. The time price differential exemption was probably expressed in order to avoid possible statutory confliction with the retail installment sales act's
Affirmed. Costs to defendants.