Court Opinion

ID: 9660975
Source: CourtListenerOpinion
Date Created: 2023-08-23 22:25:25.249183+00
Date Added: 2024-06-11T18:14:23.811220
License: Public Domain

Sam Robinson, Associate Justice, dissenting. Article 19, Sec. 13 of the Constitution of Arkansas provides: “All contracts for a greater rate of interest than ten per cent per annum shall be void, as to principal and interest, and the General Assembly shall prohibit the same by law; but when no rate of interest is agreed upon, the rate shall be six per centum per annum.” Notwithstanding the Constitution and the statutes implementing it, over a period of many years the practice of charging a usurious rate of interest had grown to the extent that in many instances interest was charged at a rate of more than 40 per cent per annum. In Hare v. General Contract Purchase Corp., 220 Ark. 601, 249 S. W. 2d 973, this Court gave a caveat to the effect that subsequent to the effective date of that decision the constitutional provision prohibiting usury would be enforced. Later, in several cases this Court made it clear that usury would not be tolerated. Sloan v. Sears Roebuck Co., 228 Ark. 464, and cases cited therein. In the case at bar the effect of those decisions is swept away. Henceforth, in my opinion, the practice of charging a usurious rate of interest will occur more frequently than it did before the Hare case. Now the penalty for charging usury can be avoided by merely charging more than the agreed price and basing the interest on the fraudulent charge. Then, if the seller gets caught making the usurious charge, he will not have to suffer the penalty the law provides for usury. Here it was found by the trial Court and by this Court that the purchaser bought an automobile for the agreed price of $1,095.00; that he paid $245.00 at the time of the purchase, leaving a balance of $850.00, payable in 24 equal monthly installments. Interest at the rate of ten per cent per annum would amount to approximately $95.00, but as shown on the face of the contract, the purchaser was charged $133.40 as interest, approximately 15 per cent per annum. But the majority in effect holds that no usurious rate of interest was charged because in addition to charging the unlawful rate of interest, an attempt was made to defraud the purchaser of an additional $300.00. I respectfully dissent.