_____________ No. 95-1819EA

_____________ Venture Properties, Inc., * * Appellant, * * Appeal from the United States v. * District Court for the Eastern * District of Arkansas. First Southern Bank, * * Appellee. *

_____________ Submitted: November 17, 1995 Filed: March 7, 1996

_____________ Before RICHARD S. ARNOLD, Chief Judge, HENLEY, Senior Circuit Judge, and FAGG, Circuit Judge.

_____________ FAGG, Circuit Judge.

Venture P roperties, Inc. (Venture) appeals following a jury verdict in favor of First Southern Bank (First Southern) on Venture's usury claim. We affirm.

Venture owed a total of about $2 million on two promissory notes
. Aft er the notes came due and Venture was unable to pay, the creditor s holding the notes offered to accept $1.3 million in full satisfaction of the debts i f Venture could make the payment by the end of the year
. Because Venture did n ot have $1.3 million available, Venture worked out a special arrangement with First Southern, an Arka nsas bank. First Southern bought the promissory notes from Venture's creditors for $1.3 million
. Venture agreed to make three monthly payments of $20,000 to First Southern and then purchase the notes for about $1.34 million. Although Venture mad e the monthly payments as agreed, Venture had not raised enough money

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to purchase the notes from First Southern at the end of the three months. First Southern then imposed some financial penalties on Venture, an d Venture protested. I n the following weeks Venture was able to raise some capital, the parties reached a compromise about how much Venture owed, and First Southern accepted about $1.4 million as payment in full.

Vent ure then brought this lawsuit, contending the financia l arrangement with First Southern was in essence a usurious $1.3 million loa n from First Southern to Venture. Based on all th e payments Venture made to First Southern, Ventu re calculated the "loan" had an annual interest rate of almost 30% that greatly exceeded the maximum interest rate permitted by federal usury law. See 12 U.S.C. § 1831d (1994). First Southern argued its arrangement with Venture was not a loan, but a legitimate purchase and sale agreement not subject to usury restrictions. First Southern als o raised several affirmative defenses. A jury ret urned a general verdict in favor of First Southern and the district court entered judgment on th e verdict.

On appeal, Venture argues the district court should have grante d Venture's motion for judgment as a matter of law. We disagree. Because First Southern is located in Arkansas, 12 U.S.C. § 1831d allowed Firs t Southern to charge the maximum interest rate that Arkansas law would permi t on the t ransaction with Venture, and § 1831d requires us to appl y Arkansas's entire substantive law of usury to determine what that rate was
. See First Nat'l Bank v. Nowlin , 509 F.2d 872, 87 6 (8th Cir. 1975) (holding 12 U.S.C. § 85 incorporates state substantive us ury law); Greenwood Trust Co. v . Massachusetts , 971 F.2d 818, 826-27 (1st Cir. 1992) (stating 1 2 U.S.C. § 1831d parallels 12 U.S.C. § 85 and shou ld be interpreted the same way), cert. denied , 506 U.S. 1052 (1993). Under Arkansas law, purchase an d sale agreements are not subject to any usury restrictions unless th e agreeme nts are merely disguised loans. General Elec. Credit Corp. v
. Robbins , 414 F.2d 208, 209-210 (8th

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Cir. 1969); Estate of Traylor v. Harmon , 576 S.W.2d 201, 202-03 (Ark
. 1979) (en banc); Haley v. Greenhaw , 360 S.W.2d 753, 756-57 (Ark. 1962). Whether a purchase agreement is actually a disgu ised loan is a question of fac t, Haley , 360 S.W.2d at 758, and First Southern presented sufficien t evidence for a reason able jury to conclude the agreement in this case was not a loan and thus was not usurious. For example, First Souther n officials testified they refused Venture's reque st for a loan and proposed the purchase and sale agreement as an alternative. See Geominerals Corp. v. Grace , 338 S.W.2d 935, 938 (Ark. 1960). First Southern also presented evidence that neither Venture nor First Southern treated the transaction
as a loan in their financial records. See id. at 938-39. In our view, th e district court properly denied Venture's motion for judgment as a matter of law and allowed the jury to determine the transaction's true nature.

Vent ure also challenges several of the district court's jur y instructions. After carefully reviewing Arkansa s usury cases, we conclude the district court correctly instructed the jury that Venture was required to prove usury by clear and convincing evidence. See Renfro v. Swif t Eckrich, Inc. , 53 F.3d 1460, 1466 (8th Cir. 1995) (citing Smith v. MRC C Partnership , 792 S.W.2d 301, 305 (Ark. 1990)). Venture cannot shift the burden of proof to First Southern because the tr ansaction was not usurious
on its face. Medford v. Wholesale Elec. Supply Co. , 691 S.W.2d 857, 858-5 9 (Ark. 1985). Moreover, the district court did n ot abuse its discretion in framing the jury instruction about discounting or by rejecting Venture's proposed instruction about profit, because the jury instructions as a whol e fai rly and adequately explain the applicable law. See Resolution Trus t Corp. v. Eason , 17 F.3d 1126, 1132 (8th Cir. 1994).

We also reject Venture's contention that the district court shoul d not ha ve instructed the jury to consider First Southern's affirmativ e defenses of compromise and settlement, accord and

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satisfaction, and estoppel. Unlike Venture, we believe the record would allow a reasonable jury to conclude Venture settled its usury claim agains t First Southern when Venture negotiated the final "payment in full" for the notes, and then Venture changed its position and filed a usury claim
. Thus, the district court correctly submitted the affirmative defenses to the jury.
Venture also claims the district court violated Federal Rule of Civil Proced ure 39 and abused its discretion by granting First Southern' s untime ly request for a jury trial. We need not consider whether th e district court committed a procedural error because any error would b e harmless. See Fed. R. Civ. P. 61. Venture has not asserted it wa s prejudiced by the district court's decision to c onduct a jury trial rather than a bench trial, and the record does not reveal any prejudice. Id. Having de cided Venture received a fair trial in the district court, we affirm the judgment for First Southern.
A true copy.

Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.