Court Opinion

ID: 9648539
Source: CourtListenerOpinion
Date Created: 2023-08-23 14:25:49.809251+00
Date Added: 2024-06-11T18:12:02.658496
License: Public Domain

ON REHEARING George Rose Smith, J., on rehearing. In its brief on rehearing the appellee does not question the correctness of our interpretation of Act 39 of 1887. Instead, it is now contended that the appellant’s right to plead usury should be determined by the law of Tennessee, where the original contract of sale was made, and that by Tennessee law the plea is not available to an assignee of encumbered property. This conflict of laws question was not seriously argued in the original briefs. There the appellant somewhat indirectly suggested that the Tennessee law was favorable to him, while the appellee insisted that the law of Arkansas should govern and that the case of Hiner v. Whitlow was controlling. Since we have overruled the Miner case — a step that the appellee could not reasonably have been expected to anticipate — simple fairness requires that the appellee now be permitted to raise an issue that was not essential to its argument as long as the doctrine of the Miner case remained unimpaired. This contract of sale was made in Chattanooga, Tennessee, and it is not intimated that there was any effort on the part of the contracting parties to evade the law of Arkansas. (See Williston on Contracts [Rev. Ed.], § 1792.) Rather, this was apparently a tona fide Tennessee sale, pursuant to which the purchaser’s interest was later assigned to the appellant. The present question is whether his right to attack the contract for usury should be determined by Tennessee law or by Arkansas law. We think the Tennessee law governs. It has been pointed out that the assignment of a contractual right “may give the transferee, as between the parties to the transfer, the benefit of the right and authority to enforce it without necessarily in any other way putting him into the transferor’s position with regard to the other contracting parties.” Whether the assignment in fact has that effect is to be determined by the law of the place of contracting. Best., Conflict of Laws, § 348. Again, “whether any rights, and if so what rights, of the assignor are transferable are determined by the law of the place where the contract is made.” Ibid., § 350. In Tennessee it has long been the rule that the defense of usury is personal to the debtor and cannot be asserted by one who purchases property encumbered by a usurious debt. Nance v. Gregory, 6 Lea 343, 40 Am. Rep. 41; Parker v. Bethel Hotel Co., 96 Tenn. 289, 34 S. W. 209, 31 L. R. A. 706; Deitch v. Staub, 6th Cir., 115 F. 309. This being true, the circuit court was right in striking the plea of usury. The petition for rehearing is granted, and the judgment is affirmed.