Knox v. Goodyear Stores, Inc., 5--5851

• Decision Date: 08 May 1972
• Docket Number: No. 5--5851,5--5851
• Citation: 252 Ark. 530,479 S.W.2d 875
• Parties: Lee KNOX, Appellant, v. GOODYEAR STORES, INC., Appellee.
• Court: Arkansas Supreme Court

Page 875

479 S.W.2d 875

252 Ark. 530

Lee KNOX, Appellant, v. GOODYEAR STORES, INC., Appellee.

No. 5--5851.

Supreme Court of Arkansas.

May 8, 1972.

Dan McCraw, Hot Springs, for appellant.

Curtis L. Ridgway, Jr., Hot Springs, for appellee.

JONES, Justice.

This is an appeal by Lee Knox from an adverse decision of the Garland County Circuit Court apparently on a summary judgment in favor of Goodyear Stores, Inc., in a replevin action. The appellee, Goodyear Stores, Inc., sold a television and a lawn mower to Knox under time payment contracts and retained a security interest in the merchandise. Knox defaulted a payments and Goodyear filed suit in replevin. The lawn mower could not be found but possession of the television was delivered to Goodyear under bond.

Knox filed an answer denying the validity of the contract and alleging usury as a defense. He also alleged that Goodyear failed to properly comply with terms of the Federal Truth-in-Lending Act. A pre-trial order was entered wherein the court, among other things, found:

'That the parties appeared by counsel for pre-trial and agreed to try the case before the court sitting as a jury.

That the parties stipulate that defendant may proceed by the filing of a Motion for summary judgment which if granted would permit defendant to recover the TV set or its value and if such Motion be not granted then plaintiff shall recover on its complaint and the possession of the merchandise sold defendant.'

This stipulation added nothing to Knox's right to file a motion for summary judgment, but in any event, he did file a motion for summary judgment without supporting affidavit. The motion alleged that the contract was usurious on its face; that the exhibited contract constituted the entire transaction between the parties and that there were no other material facts in controversy. The motion then contradicted itself with this statement:

'A further fact question is raised herein under the said Federal Law pertaining to the recovery by the defendant of a reasonable attorney's fee.'

Then follows an affidavit of Knox's attorney as to the services he had rendered his client.

In response to the motion for summary judgment, Goodyear filed an affidavit stating that its agent had made an error in calculating the interest on the contract, and that there were disputed questions of fact raised by the pleadings and to be determined by the court. Goodyear then filed an affidavit of Ed Hogaboom, a public accountant, stating that an attached report of an examination of the Knox account for Goodyear is correct to the best of affiant's knowledge and belief. The report to Goodyear was to the effect that all of the Knox contracts had been examined by Mr. Hogaboom and after giving credit for unearned finance charge in the amount of $58.25, there was less than 10% interest actually charged Mr. Knox on his account.

It would appear from this affidavit and report that Hogaboom had examined all items in the account of Knox with Goodyear over a considerable period of time and concluded that when the finance charges on all the purchases were averaged out and proper credit given for unearned finance charges, the overall interest charges on all the purchases amounted to less than ten per centum per annum.

Hogaboom did not testify and Knox filed a motion to 'quash' the affidavit together with the attached report. Upon this state of the record the trial court entered judgment as follows:

'On this 3rd day of August, 1971, defendant's Motion to Quash and defendant's Motion for summary judgment came on to be heard upon the pleadings and other matters and things, from which the court finds:

1. That defendant's Motion to Quash plaintiff's response to defendant's Motion for Summary Judgment should be overruled and denied.

2. That plaintiff's contract with defendant was not usurious.

3. That defendant's Motion for Summary Judgment should not be granted.

IT IS, THEREFORE, ordered and adjudged that plaintiff be and is hereby entitled to possession of the GE color T.V., M923EMP, 0036 14867, taken under Writ of Replevin issued herein and that the plaintiff is the lawful owner thereof.'

The appellant Knox designated the following points for reversal:

'The court erred in overruling the appellant's motion to quash appellee's response to appellant's motion for summary judgment.

The court erred in finding that the contract was not usurious.

The court erred in not giving relief to the appellant under the Truth-In-Lending Law.'

Goodyear argues that its contract with the appellant was not usurious, and that even if one isolated sales contract may appear on its face to be usurious, usury cannot be charged unless an illegal interest rate was intentionally imposed. Goodyear then argues as follows:

'The appellant attempts to single out one transaction from many transactions between Goodyear Stores, Inc. and the appellant, Lee Knox to support his position that the transaction in question was usurious. The case in the lower Court was decided upon Motion for Summary Judgment with supporting affidavits, and the appellee calls the Court's particular attention to the Affidavit of Hogaboom and Keck, Certified Public Accountants, contained in T.37 through T.40. According to this analysation, Mr. Ed Hogaboom, after careful examination of the various contracts executed between Lee Knox and the said Goodyear Stores, Inc. found that Mr. Knox was not in fact charged a rate of interest which was in excess of ten percent of the unpaid principal balance.

We must assume...