Jorge Arrospide Sr gave his son Jorge Arrospide Jr power
Jorge Arrospide Sr. gave his son, Jorge Arrospide Jr., power of attorney to act on his behalf. To pay his father’s medical bills, Jorge Jr. borrowed $ 4,000 on behalf of his father from Carboni, giving Carboni a secured note. There was no other source of funding available. Carboni said, “ Take it or leave it.” Carboni added on interest at the rate of 200 percent per year. ( This loan was exempt from the usury laws in California because Carboni was a licensed real estate broker.) The 200 percent interest rate was ten times the interest rate then prevailing in the credit market for similar loans. Carboni also advanced additional funds to Jorge Sr. When Jorge Sr. failed to make any payments on the note after demand, Carboni sought to foreclose on Jorge Sr.’ s real property. By this time, the amount of the debt with interest was 100 times the original debt. Jorge Sr. argued that the loan agreement was unconscionable and that the original debt should be re- formed to reflect a lower rate of interest. Carboni argued that the loan was legitimate and that Jorge Sr., should not have borrowed the money if he could not pay. What do you think the outcome should be?
Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
Relevant Tutors available to help