Sleeper v. Sweetser

• Decision Date: 27 October 1969
• Docket Number: No. 5--4999,5--4999
• Citation: 247 Ark. 477,446 S.W.2d 228
• Parties: W. J. SLEEPER and Otto Gage, d/b/a Cameo Jewelry and Engraving Shop, Appellants, v. Bob SWEETSER, Appellee.
• Court: Arkansas Supreme Court

Page 228

446 S.W.2d 228

247 Ark. 477

W. J. SLEEPER and Otto Gage, d/b/a Cameo Jewelry and Engraving Shop, Appellants, v. Bob SWEETSER, Appellee.

No. 5--4999.

Supreme Court of Arkansas.

Oct. 27, 1969.

Ball & Gallman, Fayetteville, for appellants.

Estes & Storey, Fayetteville, for appellee.

HOLT, Justice.

This appeal results from granting appellee's motion for a summary judgment based upon the following transaction. The appellants gave $50 to appellee for a man's nine-diamond ring. Appellants received a standard bill of sale from appellee. As a part of the same transaction, appellants then signed and delivered to the appellee an option to repurchase agreement. By its terms the appellee retained the right to repurchase the same ring for $55 within ten days upon presentation of the written option. Within this ten-day period the appellee gave appellants a $5 check for the purpose of having the option extended for an additional ten days. When appellee tendered $55 to appellants for the return of this diamond ring, the offer was refused by appellants with the explanation that appellee's $5 check had been returned due to insufficient funds and, therefore, the time had expired for appellee to exercise his option to repurchase.

In appellee's complaint as amended he alleged that although the agreements on their face appear to be a bill of sale and an option to repurchase, they are in effect merely a pawn-loan agreement by which he pawned his ring for $50 with the right to redeem it within ten days for an additional $5; that $5 of the $55 repurchase price provided in the option to repurchase constituted a usurious rate of interest in that it amounts to 10% for ten days, or 1% per day; that the contract should be rescinded and the diamond ring returned to appellee, or in lieu thereof, he be awarded $500 as the alleged value of the ring and that appellee was entitled to damages of $500 for appellants' unlawful detention of the ring. Appellants responded with a general denial. In answering appellee's request for admission of facts, appellants admitted the bill of sale agreement and option to repurchase agreement and denied that the option to repurchase had been extended for an additional ten days since appellee had given an insufficient funds check. Appellants also admitted that 70% of their inventory, based upon valuation, was used merchandise.

Appellee then filed a motion for summary judgment supported by his affidavit that he had entered into the sale and repurchase agreement; that the value of the diamond ring was $500; that, 'I retained an option to repurchase the ring mentioned above for $50 plus an additional $5 interest within ten days from the execution of the bill of sale agreement dated January 10, 1968. I understood the entire transaction to be a pawn-loan agreement'; that he gave appellants his $5 check for a ten-day extension to repurchase his ring; that later his tender of $55 to appellants for the return of his ring was refused on the basis that he had not exercised his option in the repurchase agreement within the agreed extension of time since his $5 check was returned unpaid due to insufficient funds. The appellants did not file a counter affidavit.

In granting the summary judgment the trial court found:

'That the defendants did not file any counter affidavits or pleadings in response to plaintiff's Motion for Summary Judgment and as a result thereof, there is no genuine issue as to any material fact.'

The court further found that the transaction between the parties is a 'shift or device for usurious loan of money;' that as a result the appellee is entitled to the return of the diamond ring or its value in the sum of $500 and the further sum of $500 as damages for appellants' wrongful detention of the ring. Appellee now concedes that the record does not support an award of $500 as damages for the unlawful detention of the ring and offers a remittitur in that amount.

For reversal the appellants, through their present counsel, contend that the bill of sale and repurchase agreement on their face constitute a fact issue. Appellants say that: 'The Bill of Sale agreement in question reflects on its face that the appellee made a bona fide sale of a diamond ring to appellants. The Option to Repurchase agreement reflects on its face that a bona fide right was vested in appellee to repurchase the ring within the option period for the stated amount. There is no language in either of these agreements reflecting that the transaction between the parties was one of borrowing and lending of money as alleged by the appellee and the lower court erred in finding the latter to be the case as a matter of law.'

Appellee takes the position that the pleadings, appellants' answers to appellee's request for admission of facts, and appellee's uncontroverted affidavit present a transaction which was a mere shift or device for a usurious loan of money. He cites Sparks v. Robinson, 66 Ark. 460, 51 S.W. 460 (1899). There we held that a sale and an option to repurchase based upon written instruments in a transaction similar to the one at bar constituted 'a shift for a usurious loan of money.' We said:

'The instrument itself, and the sale ticket given with it, show that the grantor had the privilege of redeeming in thirty days, by paying the principal and not exceeding ten per cent., and the proof shows that at the end of each month the eighty cents, or ten per cent. per month, was collected, and another sale ticket was issued granting the same privilege. And this might be continued ad infinitum. The law shells the covering, and extracts the kernel. Names amount to nothing when they fail to designate the facts. We are of the opinion that the court was justified in concluding that the papers called 'bill of sale' and 'sale tickets' were nothing more or less than a shift for a usurious loan of money.'

A 1967 amendment to our summary judgment statute provides in pertinent part:

'(e) * * * Defense Required. * * * When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.' Ark.Stat.Ann. § 29--211 (Supp.1967).

In Deam et al. v. O. L. Puryear & Sons, Inc., 244 Ark. 18, 423 S.W.2d 554 (1968), we said:

'* * * The opposition to the motion cannot always successfully take his stand on the content of his pleading alone. If the movant makes a case for summary judgment the opponent must come from behind 'the shielding cloak of formal allegations and demonstrate a genuine issue.''

See, also, Douglas et al. v. Citizens Bank of Jonesboro, 244 Ark. 168, 424 S.W.2d 532 (1968), and Epps v. Remmel, 237 Ark. 391, 373 S.W.2d 141 (1963).

We recently had occasion to consider the effect of a failure to respond to an affidavit supporting a motion for summary judgment in Ashley v. Eisele, 247 Ark. ---, 445 S.W.2d 76 (1969). There we said that the failure to file counter affidavits does not in itself entitle the moving party to a summary judgment. However, the effect is to leave the facts asserted in the uncontroverted affidavit supporting the motion for summary judgment accepted as true for purposes of the motion.

In the case at bar appellee's complaint asserted a pawn-loan arrangement with an illegal rate of interest. Appellants responded with a general denial. In a request for admissions appellants admitted that 70% of the value of their inventory consisted of used goods. Thereafter, appellee's uncontroverted affidavit, which must be accepted as true, asserted that this was a pawn-loan transaction with a usurious rate of interest. In our view when the established law is applied, the appellee has met the burden of demonstrating that no material issue of fact exists since his affidavit stands uncontroverted. The trial court did not err in granting a summary judgment in favor of the appellee.

With exception of the award of $500 for damages for wrongful detention of the nine-diamond ring, conceded by appellee as error, the judgment is affirmed.

FOGLEMAN and JONES, JJ., dissent.

FOGLEMAN, Justice.

I respectfully dissent, because I think the court is departing from its previous position on summary judgments. I do not believe that the summary judgment procedure has been properly utilized in this case. This very wholesome process for eliminating claims and defenses without merit and thus expediting the disposition of litigation was not intended to be a vehicle for bypassing jury trials or for early prediction of the outcome of litigation, however obvious it might seem. We have always been very strict in resolving every doubt against a summary judgment. See, e.g., Russell v. City of Rogers, 236 Ark. 713, 368 S.W.2d 89; Wirges v. Hawkins, 238 Ark. 100, 378 S.W.2d 646; Deam v. O. L. Puryear & Sons, Inc., 244 Ark. 18, 423 S.W.2d 554.

I cannot subscribe to the very cursory manner in which two written documents have been held to be something...