Cheairs v. McDermott Motor Co.

Hart, C. J., (after stating the facts). The main reliance of the defendants for a reversal of the judgment is that the transaction was, in effect, a device to cover a loan and to exact a greater rate of interest than that allowed by law. We do not agree with counsel in this contention. The law is well settled in this State that usury can only attach to a loan of money or to the forbearance of a debt, and that, on a contract for the sale of property, the contracting parties may agree upon one price if cash be paid, and upon a large addition to the cash price, as may suit themselves, if credit be given. Where the facts show that the transaction is in reality a sale, and the agreement is not made in consideration of the loan or forbearance of money, the charge of usury is not sustained. Ford v. Hancock, 36 Ark. 248; Brakefield v. Halpern, 55 Ark. 265, 15 S. W 190; Ellenbogen v. Griffey, 55 Ark. 268, 18 S. W. 126; Blake Bros. v. Askew, 112 Ark. 514, 166 S. W. 965; Smith v. Kaufman, 145 Ark. 548, 224 S. W. 978; and Standard Motor Finance Co. v. Mitchell Auto Co., 173 Ark. 875, 293 S. W. 1026. The cash price of the automobile was $600.31, and the credit price, including certain extra equipment, was $743.81. The added charge was not a mere device to evade the statute against usury, but it represented the credit price of the car as distinguished from its cash price, and the circuit court properly held that the sale was valid and free from any taint of usury. The facts did not show this to be a case where property was sold at a cash valuation and certain payments were deferred in consideration that a greater rate of interest than allowed by law be paid by the purchaser. The transaction was neither a loan nor a forbearance of a debt, but was simply a contract to pay a greater sum for the purchase price of the automobile on a credit than would have been paid had the sale been for cash. It is next insisted that the contract is usurious because the memorandum on the face of the note and sales contract, as signed by Ima Mae Cheairs, was “Insurance and interest,” instead of “Insurance and carrying charge,” as it now appears. The sum under this item was $76, and, under the facts disclosed'by the record, though it was in the original contract called ‘ ‘ interest, ’ ’ if was not paid for a loan of money, but was a part of the purchase price which the defendant at the time agreed to pay for the automobile. There.is no evidence whatever that the transaction was intended as a cover for a loan. Parker v. Coburn, 10 Allen (Mass.) 82. Hence the alteration in the contract was an immaterial one, and there is no ground whatever for the suggestion of the defendants that the contract was usurious. Therefore the judgment will be affirmed.