General Contract Corp. v. Dodge, 5-380

• Decision Date: 12 April 1954
• Docket Number: No. 5-380,5-380
• Citation: 266 S.W.2d 816,223 Ark. 476
• Parties: GENERAL CONTRACT CORP. v. DODGE.
• Court: Arkansas Supreme Court

Page 816

266 S.W.2d 816

223 Ark. 476

GENERAL CONTRACT CORP. v. DODGE.

No. 5-380.

Supreme Court of Arkansas.

April 12, 1954.

Rector, Cockrill, Limerick & Laser, Little Rock, for appellant.

John K. Shamburger, Little Rock, for appellee.

HOLT, Justice.

This is a case of alleged usury and arises out of a Conditional Sales Contract for the purchase of a Pontiac automobile by appellee, Dodge, on May 9, 1952, from the Dutch O'Neal Motors, Inc.,--not a party here. The transaction occurred prior to the effective date of the caveat (June 30, 1952) in the case of Hare v. General Contract Purchase Corporation, 220 Ark. 601, 249 S.W.2d 973.

Appellee alleged in his complaint, in effect, that on May 9, 1952, he purchased the car in question from Dutch O'Neal Motors, Inc. for $2200, on which he made a down payment of $767, leaving an unpaid balance of $1433, that at the time he signed a Conditional Sales Contract under which he was supposed to pay 5% on the unpaid balance, that later, after receiving a copy of the contract, he learned that a purchase price of $2400 with an interest charge of $395 was stated therein, and an insurance premium charge of $162 on which appellant received a commission as agent and that the transaction was usurious and fraudulent. He asked that the sales contract and note be cancelled and title to the automobile vested in him.

O'Neal Motors answered separately with a general denial, specifically pleaded that the contract was a true time sales transaction and pleaded stare decisis as a complete defense. A nonsuit was taken as to it. General Contract Corporation answered with a general denial and also alleged it was a true time sales contract and stare decisis as a complete bar. In a cross complaint, appellant, General Contract Corporation, alleged default in making monthly payments by appellee, that it was the owner of the car of the value of $2000, and prayed for judgment for its possession or value.

Trial resulted in a decree for appellee, Dodge. The decree recited: 'The court further finds as a matter of fact that $2200 was the selling price of the Pontiac automobile. That there was credited on the $2200, $767, as a down payment, leaving a balance of $1433; that an insurance policy was issued protecting plaintiff and defendants for collision or upset; the cost of insurance being $162, leaving a balance to be financed of $1595; that plaintiff was charged on such balance of $1595 interest far in excess of 10% per annum.

'That actually this transaction was a loan of money from General Contract Corporation to plaintiff and a sale of personal property by Dutch O'Neal Motors, Inc. to plaintiff and that the contract showing a total price of $2795 was a device to cover usury, and a fraud as to plaintiff. That there was no bona fide credit price or time sale and that the whole scheme was one to evade and avoid the constitutional mandate against usury.

'That the note and contract should be declared...