Burr v. Renewal Guaranty Corp.

Decision Date29 April 1970
Docket NumberNo. 9828,9828
Citation105 Ariz. 549,468 P.2d 576
PartiesJames H. BURR and Kathryn Burr, his wife, Appellants, v. RENEWAL GUARANTY CORPORATION, a Colorado corporation, Appellee.
CourtArizona Supreme Court

Wade Church, Phoenix, for appellants.

Holman, Lewis, MacArthur & Carver, by John D. Lewis, Tempe, for appellee.

LOCKWOOD, Chief Justice.

Plaintiff, Renewal Guaranty Corporation, hereinafter referred to as 'the lender' sued James H. Burr and his wife, hereinafter referred to as 'Burr', on a promissory note. The defense was usury. The trial court, sitting without a jury, gave judgment for the lender, and Burr appealed.

The facts are not in dispute. The lender is a Colorado corporation, duty registered under the Money Lender's Act of Colorado, which permits it to charge 24% Per year interest on loans. It specializes in loans to life insurance salesmen secured by commissions earned by them but not yet due from their companies. The lender advertises in trade journals and other periodicals which are read nationwide by life insurance salesmen, including those residing in Arizona.

Burr read one of the lender's ads, and applied for a loan. The lender checked Burr's credit, and assured itself that Burr had future commissions coming. A note was prepared in Colorado and sent to Burr, together with an assignment of his commissions. Burr signed both documents in Arizona, and returned them to the lender, which then mailed its check to Burr. The note was for $4,800, bore interest at the rate of 1 1/2% Per month, was specifically made payable at the lender's office in Denver, Colorado, in installments, and provided that 'the construction and enforcement of this note shall be governed by the laws of the State of Colorado.' Burr defaulted on his payments.

The parties agree that if the maximum permissible interest rate is governed by the laws of Arizona, the note is usurious but if it is governed by the laws of Colorado, then it is not. The issue, therefore, involves principles of conflict of laws.

Burr contends that since the contract was made in Arizona, it must be interpreted by Arizona law. However, we believe otherwise. It is true that Burr signed the note in this state, but the note was prepared in Colorado and sent here for him to sign. When signed, it was returned to the lender. When the latter received it, there was not yet a contract. The lender could not sue on the note, for it had not yet parted with the consideration. The note became an enforceable promise to pay when the lender sent its check to Burr. We believe that the contract, evidenced by the note, was made in Colorado.

In Seeman v. Philadelphia Warehouse Co., 274 U.S. 403, 47 S.Ct. 626, 71 L.Ed. 1123 the United States Supreme Court said in 1927:

'Respondent, a Pennsylvania corporation having its place of business in Philadelphia, could legitimately lend funds outside the state, and stipulate for repayment in Pennsylvania in accordance with its laws, and at the rate of interest there lawful, even though the agreement for the loan were entered into in another state, where a different law and a different rate of interest prevailed. In the federal courts, as was said in Andrews v. Pond, 13 Pet. 65, 77--78 (10 L.Ed. 61): 'The general principle in relation to contracts made in one place, to be executed in another, is well settled. They are to be governed by the law of the place of performance, and if the interest allowed by the laws of the place of performance is higher than that permitted at the place of the contract, the parties may stipulate for the higher interest, without incurring the penalties of usury."

Seeman, supra, is cited in Pioneer Credit Corporation v. Carden, 127 Vt. 229, 245 A.2d 891 (1968) as authority for the statement that:

'Absent a...

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7 cases
  • Cardon v. Cotton Lane Holdings, Inc.
    • United States
    • Arizona Supreme Court
    • September 24, 1992
    ...(App.1985) (Arizona courts follow Restatement to determine choice of law questions in contract actions), citing Burr v. Renewal Guaranty Corp., 105 Ariz. 549, 468 P.2d 576 (1970); Herma Hill Kay, Theory into Practice: Choice of Law in the Courts, 34 Mercer L.Rev. 521, 556 & n. 223 (1983) (a......
  • Estate of Levine, Matter of
    • United States
    • Arizona Court of Appeals
    • January 4, 1985
    ...look to the Restatement (Second) of Conflict of Laws, to determine which jurisdiction's law applies. See Burr v. Renewal Guaranty Corporation, 105 Ariz. 549, 468 P.2d 576 (1970). The Restatement provides that the law of the state chosen by the parties to govern their contractual rights and ......
  • Garza v. Gama
    • United States
    • Arizona Court of Appeals
    • July 12, 2016
    ...of Conflict of Laws (1971) ("Restatement") to determine which state's substantive law applies to a claim. Burr v. Renewal Guar. Corp. , 105 Ariz. 549, 550, 468 P.2d 576, 577 (1970).¶ 17 Swift has standard form contracts with roughly 1,000 owner/operators that contain a provision requiring a......
  • R. C. Allen Business Machines, Inc. v. Acres
    • United States
    • New Hampshire Supreme Court
    • July 29, 1971
    ...and proved by the defendant. Automotriz Del Golfo De Cal. v. Resnick, 47 Cal.2d 792, 306 P.2d 1 (1957); Burr v. Renewal Guarantee Corp., 105 Ariz. 549, 551, 468 P.2d 576, 578 (1970); 20 C.J.S. Corporations § 1910 (1940); 18 Fletcher Cyc. Corp. (perm. ed.) s. 8621 (1969); see Dairy Equipment......
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