*1 792 BANK
FIRST AMERICAN NATIONAL Nashville, Tennessee McCLURE CO. et al CONSTRUCTION 550 2d 78-334 551 S.W. delivered Opinion May (InBanc) [Rehearingdenied 1979.] June Barrett, Wheatley, Reasoner, Deacon, Smith & by: Stephen Marshall, Brown, Winchester, Charlton, Leake& Huggins, by: M. for Stanley appellant. Huggins, E. Rhine, Robert Young, Rhine & by: appellees. Young, *2 from This is an a Hickman, appeal Darrell Justice. the decided Greene County Chancery foreclosure action by The First issue Court. The appellant, usury. Nashville, Tennessee, of American sought National Bank notes, three and foreclosure on accompanying promissory land, it had of on Greene by deeds trusts acquired County The McClure Construction Company, assignment. appellee, of instruments. Other had assumed the par- obligations in but not to trial are ties were proceedings parties joined this appeal. to the raised the defense of appellant’s
McClure He found action the chancellor held the notes usurious. and Co., 261 his decision was controlled BoyleMortgage 437, (1977). Ark. 549 S.W. 2d the chancellor was First American arguing appeals interest, 10%, of over because admittedly wrong fact, error, and, therefore, was due to a mistake of or a clerical was not usurious. and reverse the We legally agree chancellor’s decree. lender, The
The facts are original virtually undisputed. Tennessee, Nashville, made three Co. of Guaranty Mortgage in to Watkins construction loans money August, John $57,700.00. three notes on their and his wife The totalling face rate 10% First showed an interest annum. per when
matter? Yes, were,
A. in fact I about they inquired borrowing monies from them and were not interested other they in Arkansas because could not in they loaning money more than 10%. charge that a billed these accounts using computer
Guaranty com- and interest a calculated 360-day year quarterly using was un- loans. It which is for Tennessee pounding, customary interest rate the effective charged disputed statements was 10.531% annum. There was evidence that per had a nor First American neither policy comput- Guaranty Arkansas loan. interest the same way any ing result of statements were the The argues appellant intended to error; it was never an honest mistake or clerical constitution, of the Arkansas violate the strict usury provision Art. 13. ARK. CONST. § relies, did, on our deci- The as the chancellor appellee Co., where we found sion in v. supra, Cagle Boyle Mortgage in a similar situation. usury Co., similar,
The case of supra, Cagle Boyle to conclude it con- a of it could lead one and cursory reading in similarities are that both decision in this case. The trols the face; com- not usurious on their instances the notes were to in- 360-day year compute statements puterized using received; interest was compounded terest were mailed and case; case, in interest this in the monthly quarterly annum; 10% statements exceeded on the per charge or interest. on were never made principal In However, with these facts. similarities end Cagle, with a in Arkansas had an office the Tennessee corporation in Arkan- the lender did business branch manager; regularly notes, for all sas; lender used the 360-day year regularly Tennessee; the borrower com- made in or whether Arkansas the Arkansas and to excessive manager plained charge interest, with he he had do to nothing replied computing had it came out Most lender all significantly, Memphis. collectedthe interest from trans- Boyle companion illegal mistake, no We there been honest and action. concluded had usurious interest. there was intent to reserve collect offered that neither In this case the appellant proof nor First American did business Guaranty regularly Arkansas; interest knew could not they they using loan; on an year, they 360-day compounded avoid violat- offered the lender wanted to undisputed proof this the Arkansas law. McClure corroborated ing we related. There was no evidence offered as have proof, evidence; refute the that leaves the existence appellant’s an intent the statements themselves as evidence of interest. chancellor did not usurious The make *4 intent an instead make unlawful charge; specific finding he found case stands “on all fours with simply case at bar. The Court is unable to basic distinguish any facts.” or un-
There must be an intent to
reserve
receive
Linton, 62
lawful interest to constitute
Garvin v.
Ark.
usury.
370,
one
(1896).
ment Corp.,supra; (1927). distinction, one, sometimes fine
There is a although lender who between a mistake of fact and one of law. A makes mistake of law is not excused as one who makes a mistake (1957); fact. Brooksv. 228 Ark. 306 2d 104 S.W. Burgess, Catalani, 561, 383 2d 99 Ford Motor Co. v. 238 Ark. S.W. (1964).
We found the intent to make an unlawful requisite Co., v. for the reasons we supra, charge Cagle BoyleMortgage have enumerated above. Most of those facts do not significant exist in this case and we conclude the preponderance evidence there was no intent to make an unlawful instead, the unlawful was a result of a mistake charge; of fact.
We find no merit to appellees’ argument appellant failed to abstract the record to Rule 9(d), properly according Court Rules. Supreme
We reverse the chancellor’s decree and remand the cause consistent with this proceedings opinion. Reversed and remanded.
Purtle, concurs. J., Purtle, I. I concur in the Justice, concurring. John results However, reached I would state we majority. Co., are Ark. overruling Cagle Boyle S.W. 2d 474 (1977), and other cases the same line of along I cannot the facts Like trial judge reasoning. distinguish in the case from those in present Cagle.
In both cases there was a note and mortgage bearing stated interest rate of 10%. In each case it was that the argued the schedule of computer printout was containing *5 error an interest rate 10%. above charging The fact that in one it was case done once and the other it had been done on other occasions is not sufficient to for me. This is similar to the cases very argu- distinguish be little bit If one ment that one pregnant. may just usurious, If usurious, one not so is the other. cases is we call In should neither is the other. spade my opinion stands, it As and overrule lawyers Cagle, supra. spade which case we decide will at the courts have may just guess to follow.
Alan
ROUW v.
Wayne
STATE
79-15
Opinion (In Banc) American was notes Guaranty, assigned their division First became wholly-owned subsidiary, or interest were ever American. No on principal made on notes. were Tennessee and First American Guaranty primarily in Arkan- neither had an office located companies; agent no did business in sas. There was evidence either regularly Arkansas. McClure, stockholder and Gary president principal had to to assume the notes. to go Memphis appellee, He testified: to to Guaranty I was Memphis ... go required notes. and to cosign Office in Memphis 10% note me that this was instructed that time At they of 10% in Arkansas. in excess not could they the law me were aware informed that they They that could the most they this was of 10% and that, it would that above if they charged penny be usury. matter of on the usury? did So they you speak Q. Yes, sir. A. law on aware of the Arkansas were And they Q,