The opinion of the court was delivered by: WEBER
This is an action under the Truth in Lending Act, 15 U.S.C. § 1601 et seq. by a plaintiff who co-signed a judgment note with her daughter and son-in-law, Mr. and Mrs. Lynch, which created a security interest in plaintiff's real property, the place of residence. The note was entered in judgment but no execution is pending thereon, although payments are in default by the principal debtors. Plaintiff seeks declaratory, injunctive and monetary relief on several counts of the complaint.
Subsequently the plaintiff moved for judgment on the pleadings on the Truth in Lending Count. The court ordered the Truth in Lending Count severed for separate consideration, and ordered an evidentiary hearing on this count. We now proceed to consider this count.
Plaintiff testified that when she signed the original documents the finance charges and annual percentage rate were not disclosed to her, nor was she provided with copies of documents which she signed. She also denies receiving copies of a notice of her right of recission as required by Regulation Z, 12 CFR Sec. 226.9(b).
From the testimony of the witnesses it appears that plaintiff and her daughter went to the office of defendant Credit Union on October 2, 1973 where they discussed the loan with defendant's agent. There they signed the note, with their signatures witnessed by defendant's agent. While defendant's agent testified that he explained to them the finance charges, the annual percentage rate, and the total repayment rate, plaintiff denies ever seeing the Z-1 form and her signature acknowledging receipt of same is not contained on the exhibit. The Z-1 form also does not contain the annual percentage rate.
Plaintiff admits signing the note and the Regulation Z-3 form, the notice of right to rescind, but she denies that she was given a copy to retain.
Plaintiff testifies that she took the note and a long form (presumably the Z-3 form) home for signature by her ex-husband, the co-owner of the real estate pledged as security. His signature appears on the note witnessed by his wife (the plaintiff here) and on a separate copy of the Regulation Z-3 Notice of Recission form.
Plaintiff testified that her daughter took all papers back with her.
Defendant's agent testified that his belief is that both Mr. and Mrs. Lynch and plaintiff appeared before him on October 2, 1973 when the note was signed, but his belief is derived only from his customary practice and not from any independent recollection. His belief is fortified by his personal witnessing of the signatures of Mr. and Mrs. Lynch and plaintiff. However, it is completely consistent with his having witnessed the signature of Mr. Lynch on October 3, 1974 when the loan transaction papers were returned to his office. This conclusion is fortified by the evidence that only the signature of Joseph R. Lynch appears on the Regulation Z-1 form, the Disclosure Form, acknowledging receipt of said form on October 3, 1974.
While the signed acknowledgment of receipt of the Z-3 form (Notice of Recission) creates only a rebuttable presumption, plaintiff's testimony fails to rebut this presumption as to the receipt of the Notice of Recission form. On the other hand, plaintiff's testimony of non-receipt of the Disclosure Form stands uncontradicted and is consistent with the exhibit and her other testimony concerning the transaction.
We, therefore, find that:
1. This is a transaction governed by 12 CFR 226.8(a) which requires a written statement containing the required disclosures ...