Court Opinion

ID: 9778139
Source: CourtListenerOpinion
Date Created: 2023-08-29 20:33:53.672448+00
Date Added: 2024-06-11T07:33:04.012477
License: Public Domain

George Rose Smith, Justice, concurring. The majority opinion holds the contract to have been usurious because the interest rate, calculated in accordance with the unambiguous language of the note, was more than 10% per annum for 18 successive months (October 1, 1973, through March 1, 1975). I would affirm the decree not on that broad ground but on the narrower ground that, as of the filing of the complaint on October 19, 1976, the contract as written had already provided for interest that exceeded the legal 10% maximum by $2,-553.24. A plaintiff’s cause of action is to be determined as of the date the complaint is filed, regardless of any later change in the facts. Massey v. Tyra, 217 Ark. 970, 234 S.W. 2d 759 (1950); Pearce v. Hollis Construction Co., 212 Ark. 434, 206 S.W. 2d 15 (1947); Vandergriff v. Vandergriff, 211 Ark. 848, 202 S.W. 2d 967 (1947). Contrary to the opening sentence in the dissenting opinion, I think this case is tailor-made for a summary judgment. The controlling facts are absolutely without dispute. There is nothing for the court to do except to apply simple mathematics and unquestioned rules of law to the uncontradicted facts. When that is done, the contract is undeniably usurious. The debtor, J. B. Kramer Grocery Company, agreed to pay $171,000 in 60 equal monthly installments of $2,850, with interest at the specified Boston prime rate plus 1 3/4%, the rate to be adjusted as of the last day of each calendar quarter. As an appendix to this concurring opinion I am attaching a calculation of the interest that would have accrued from the date of the note down to and including the date of the last installment that was payable before suit was filed. It will be seen that the interest, according to the terms of the note, would have been more than $2,500 in excess of the maximum permissible total. No matter how “capital-hungry” the State of Arkansas may be — a matter about which I know next to nothing — the law is perfectly clear. Contracts calling for more than 10% interest per annum are void as to principal and interest. Ark. Const., Art. 19, § 13 (1874). Contingent contracts are to be enforced according to their terms, when the contingency is not within the control of the borrower. Sosebee v. Boswell, 242 Ark. 396, 414 S.W. 2d 380 (1967), cert. den. 389 U.S. 953 (1967). (There the majority rejected a dissenting opinion making the same arguments that are now repeated in dissent.) It seems to me to be utterly futile to attempt to raise the specter of a question of fact about the parties’ intent. The language of the contract, by incorporation by reference, adopted the Boston rate plus 1 3/4% as positively and as unmistakably as if the figures set out in the appendix to this opinion had been written into the contract. Neither party had the power to change the terms that had been agreed upon. It makes no difference that the appellant might have offered to parade into court a hundred expert witnesses ready to testify that the increase in the Boston rate was unexpected and unprecedented. Such evidence would directly contradict the language of the agreement and would therefore be inadmissible under the parol evidence rule — a rule of substantive law. Hoffman v. Late, 222 Ark. 395, 260 S.W. 2d 446 (1953). Thus the trial judge was demonstrably and unquestionably correct in granting the appellee’s motion for summary judgment. APPENDIX Due Date of Each Payment Principal Balance Int. Rate Interest to Interest to be charged be charged at 10% 1973 May 1 171,000 8.25 $ 695.70 $ 843.30 Tune 168,150 8.25 1.156.03 1.401.25 July 165,300 9.50 1,308.62 1.377.50 Aug. 162,450 9.50 1,286.06 1.353.75 Sept. 159,600 9.50 1,263.50 1,330.00 Oct. 156,750 11.75 1,534.84 1.306.25 Nov. 153,900 11.75 1,506.93 1.282.50 Dec. 151,050 11.75 1.479.03 1.258.75 1974 Tan. 148,200 11.50 1,420.25 1.235.00 Feb. 145,350 11.50 1,392.93 1.211.25 March 142,500 11.50 1.365.62 1.187.50 April 139,650 11.00 1,280.12 1.163.75 May 136,800 11.00 1,254.00 1.140.00 June 133,950 11.00 1.227.87 1.116.25 July 131,100 13.50 1.474.87 1.092.50 Aug. 128,250 13.50 1,442.81 1.068.75 Sept. 125,400 13.50 1,410.75 1.045.00 Oct. 122,550 13.50 1,378.68 1.021.25 Nov. 119,700 13.50 1.346.62 997.50 Dec. 116,850 13.50 1,314.56 973.75 Due Date of Principal Each Payment Balance Tnt. Rate to be charged Interest to be charged Interest at 10% 1975 Tan. 114,000 12.25 1,163.75 950.00 Feb. 111,150 12.25 1,134.65 926.25 March 108,300 12.25 1,105.56 902.50 April 105,450 9.25 812.84 878.75 May 102,600 9.25 790.87 855.00 Tune 99,750 9.25 768.90 831.25 July 96,900 8.75 706.56 807.50 Aug. 94,050 8.75 685.78 783.75 Sept. 91,200 8.75 665.00 760.00 Oct. 88.350 9.75 717.84 736.25 Nov. 85,500 9.75 694.68 712.50 Dec. 82,650 9.75 671.53 688.75 1976 Tan. 79,800 9.00 598.50 665.00 Feb. 76,950 9.00 577.12 641.25 March 74,100 9.00 555.75 617.50 April 71,250 8.50 504.68 593.75 May 68,400 8.50 484.50 570.00 Tune 65,550 8.50 464.31 546.25 July 62,700 9.00 470.25 522.50 Aug. 59,850 9.00 448.87 498.75 Sept. 57,000 9.00 427.50 475.00 Oct. 54,150 8.50 383.56 451.25 41,372.79 38,819.55