PARTY STORE ENTERPRISES INC V MAZIN JABERO
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STATE OF MICHIGAN
COURT OF APPEALS
PARTY STORE ENTERPRISES, INC.,
UNPUBLISHED
October 10, 1997
Plaintiff-Appellant,
v
No. 196489
Genesee Circuit Court
LC No. 96-044069 CK
MAZIN JABERO,
Defendant-Appellee.
Before: Markey, P.J., and Neff and Smolenski, JJ.
MEMORANDUM.
Plaintiff appeals by right summary disposition in favor of defendant, the circuit court having
effectively ruled that the promissory note between the parties, calling for an 8% interest rate, is usurious.
Plaintiff relies on the “business entity” exception to the general usury statute, MCL 438.61(1) and (3);
MSA 19.15(71)(1) and (3). This case is being decided without oral argument pursuant to MCR
7.214(E).
Defendant is a natural person. As such, where as here defendant has received “an extension of
credit” from plaintiff, and plaintiff is not a “state or nationally chartered bank, insurance carrier, or
finance subsidiary of a manufacturing corporation,” in order for an interest rate greater than 7% to be
valid, defendant must have furnished to plaintiff “a sworn statement in writing specifying the type of
business and business purpose for which the proceeds of the loan or other extension of credit will be
used. … .” Defendant never furnished any such sworn statement, and accordingly the 8% interest rate
is usurious. Holland v Michigan National Bank, 166 Mich App 245, 259; 420 NW2d 173 (1988).
Plaintiff ’s reliance on authority from other states is unpersuasive, as phraseological differences
between the Michigan statute at issue and statutes in other states make such decisions inapposite. The
statute here applies not just to loans but to extensions of credit additionally, and there can be no
question but that the promissory note signed by defendant represents an extension of credit to him. As
the statute creates an exception to the general application of the usury laws, compliance with all its
requirements is necessary to invoke its benefits. Grand Rapids Independent Publishing Co v City of
Grand Rapids, 335 Mich 620; 56 NW2d 403 (1953).
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Affirmed.
/s/ Jane E. Markey
/s/ Janet T. Neff
/s/ Michael R. Smolenski
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