Textron, Inc. v. Whitener, 5--5312
| Decision Date | 28 September 1970 |
| Docket Number | No. 5--5312,5--5312 |
| Citation | 249 Ark. 57,458 S.W.2d 367 |
| Parties | TEXTRON, INC., Appellant, v. Billy Ray WHITENER, Appellee. |
| Court | Arkansas Supreme Court |
Murphy, Arnold & Blair, Batesville, for appellant.
Darrell Hickman, Searcy, for appellee.
This is an action to recover $12,969.52 which is the balance due on a promissory note executed by appellee to appellant as part of a poultry financing arrangement. The trial court, sitting as a jury, found the transaction usurious. The evidence disclosed that after some verbal negotiations, the parties entered into a written contract whereby appellant was to finance the purchase of 10,800 pullets by appellee. Pursuant to one of the terms of the written contract, appellee executed a note to appellant on October 20, 1966 for $16,740.00, the purchase price of the pullets, plus a 4% service charge equaling $669.60. The total amount of $17,409.60 was, according to the face of the form note, due 'on demand, but in no event later than _ _.' In the blank space, appellant had inserted 'December 20, 1966.'
By way of defense, appellee asserted that the promissory note sued upon was usurious. On this issue appellee, the party asserting usury, had the burden of proof. Nineteen Corporation v. Guarantee Financial Corp., 246 Ark. 393, 438 S.W.2d 685 (1969); Wallace v. Hamilton, 238 Ark. 406, 382 S.W.2d 363 (1964). Here, however, the note itself constituted a prima facie case for appellee since it was usurious on its face--i.e., the price of the pullets plus a 4% service charge was due upon demand and no later than two months after the execution of the note; this would render a per annum service charge of 24% which is clearly in excess of the 10% maximum allowed by law. See Andrews v. Martin, 245 Ark. 1010, 436 S.W.2d 285 (1969); Peoples Loan & Inv. Co. v. Booth, 245 Ark. 146, 431 S.W.2d 472 (1968). Furthermore, in addition to the 4% 'service charge' inserted in the note, this standard form provided that the maker agrees that: 'Interest at the highest rate permissible by law shall be paid hereon after maturity or default, until paid.' Also, appellee testified that he considered and understood the note as being his 'total' and 'legal' obligation.
Appellant introduced parol evidence to the effect that the parties had verbally agreed to spread the payment of the note over an eight-month period, thus bringing the 4% service charge within the legal limit for interest charges. Appellant also directed the trial court's attention to one of the printed conditions on the reverse side of the written contract which provided for payment in eight monthly installments. The face of the contract was also shown to state, as part of the agreement between the parties, that: 'Upon payment of said note(s), Beacon (a division of appellant) will refund to Feeder a sum equal to that portion of the service charge, if any, included in the amount thereof which, due to time of payment, would be in excess of that permitted by law.' Similarly, in bolder faced type, the contract contained several notices to the buyer, one of which stated: 'Under the law you have a right to pay off in advance the full amount due, and under certain circumstances to obtain a partial refund of the time (service) charge.'
At the conclusion of all the evidence, the trial court requested that appellant submit a brief as to the propriety of considering the 'side agreements,' which were admitted into evidence, in the determination of this case. Appellant and appellee both submitted briefs on the issues and applicable law. Appellant also submitted a reply brief. After a consideration of these memoranda, the trial court found the promissory note to be usurious, dismissed appellant's complaint and entered judgment for appellee. This appeal follows.
Appellant's first contention for reversal is: 'The trial court erred in not considering parol evidence concerning the entire agreement of the parties.' It is clearly the law that in determining the issue of usury, all attendant circumstances germane to the transaction in question should be considered. Guaranty Financial Corp. v. Harden, 242 Ark. 779, 416 S.W.2d 287 (1967); Sammons-Pennington Co. v. Norton...
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McCoy Farms, Inc. v. J & M McKee, 77-201
...is admissible on the issue of usury. American Physicians Insurance Co. v. Hruska, 244 Ark. 1176, 428 S.W.2d 622; Textron v. Whitener, 249 Ark. 57, 458 S.W.2d 367. It was error to exclude this evidence and we consider all such proffered evidence on trial de novo. Price v. Price, 258 Ark. 363......
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...Co., supra. In examining the transaction, the court must look to the whole transaction and all the circumstances. Textron, Inc. v. Whitener, 249 Ark. 57, 458 S.W.2d 367; Ragge v. Bryan, 249 Ark. 164, 458 S.W.2d 403. The intent of the lender to exact more than the legal rate of interest must......
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...that appellee contracted for, extracted or received usurious interest. Poole v. Bates, 257 Ark. 764, 520 S.W.2d 273; Textron, Inc. v. Whitener, 249 Ark. 57, 458 S.W.2d 367. We have said that the plainest principles of justice require that the defense of usury be clearly shown. Arkansas Real......
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...the lender intended to charge more than the 10% limit, Bunn v. Weyerhaeuser Co., 598 S.W.2d 54, 56 (Ark.1980); Textron, Inc. v. Whitener, 249 Ark. 57, 458 S.W.2d 367 (1970), and that intent cannot be presumed when the opposite result can "fairly and reasonably be reached." Key v. Worthen Ba......