Court Opinion

ID: 7808436
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:09:28.156342+00
Date Added: 2024-06-11T16:30:23.847123
License: Public Domain

Kirby, J. (after stating the facts). It is contended that the court erred in directing a verdict and the contention must be sustained. In Whitlock v. Cohn, 72 Ark. 83, the court, in a suit upon a note executed in this State bearing a higher rate of interest than was allowed in the place designated for its payment, Illinois, where the rate of interest stipulated was usurious, said: “Where the intention of the parties is not otherwise more directly and definitely expressed in the contract, nor can be otherwise inferred, the place of payment will determine the law with reference to which parties have contracted; but parties will not be presumed to have contracted with reference to a law which will have the effect of annulling their contract for illegality in its very making, where another intention can be gathered, unless it be found that they were seeking in some way to avoid the force of the law, as in case of usury, for instance. The contract of the parties would be valid on its face under the laws of Arkansas, but not under the laws of Illinois. The presumption is against the contention that the parties contracted with reference to the laws of Illinois.” Under the laws of Tennessee of which this court takes judicial notice, the contract provides for a usurious rate of interest, and under the decisions of that State where commercial paper shows on its face that the contract is usurious, it cannot be enforced. Kirby’s Digest, Sec. 5389; Shannons Code, Tenn. Secs. 3493, 3499; Bank v. Walter, 104 Tenn. 11. If, however, the usury does not appear upon the face of' the paper and is not shown by the plaintiff’s pleadings, but the fact is developed by evidence aliunde, the contract will be enforced there to the extent of the loan with lawful interest, the excess of interest charged over the legal rate only not being collectible. Jackson v. Collins, 2 Heisk. (49 Tenn.) 491; Chaffin v. Lincoln Sav. Bank, 7 Heisk. (54 Tenn.) 500; Stephenson v. Landis, 14 Lea (82 Tenn.) 433; Bank v. Walter, 20 Pick. (104 Tenn.) 11; Richardson v. Brown, 9 Baxter (68 Tenn.) 245. The presumption being that the parties contracted with reference to the laws of the State where the note was made, under which it was valid, and the' testimony-excluded "tending to show that it was the intention of the lender of the money that the law of the domicile of the borrower, the makers of the note, should govern in determining its validity, as is also the general rule,' the court erred in excluding the testimony, which was competent to show that it was not done to evade the laws of Tennessee against usury. The court erred in directing a verdict and the judgment is accordingly reversed and the cause remanded for a new trial.