Aldrich v. McClay

McCurroct-i, J., (after stating the facts.) Upon no theory deducible from the facts of this case can a plea of usury be sustained. Computing interest, according to stipulation, upon those of the Starbuck notes containing the stipulation for compounding interest at maturity, it makes the amount of that debt $476. If that method of computation be discarded, and the total'be thereby reduced to $464, as claimed by appellants, the preponderance of the testimony establishes a mistake on the part of appellee. He was told by Aldrich that the amount of the debt and interest aggregated $475, and he testifies that he accepted that statement as true without computing the interest. The reservation of excessive interest through mistake of fact on the part of the lender does not render the contract usurious. Garvin v. Linton, 62 Ark. 370; Jarvis v. Southern Grocery Co., 63 Ark. 225; Johnson v. Shattuck, 67 Ark. 159. Appellants contend, however, that appellee had no right to require them to pay more on the Starbuck debt than the amount he paid Mrs. Starbuck, regardless of the correct amount of that debt and interest. But appellee was not acting as their agent in the purchase of the Starbuck debt, and had the right to demand of them the full amount of the debt and interest; and if he labored under an honest mistake caused by a statement made to him by appellants concerning the amount of the debt, the transaction would not be usurious. Aldrich testified positively that appellee procured the Starbuck and Burrough notes without any previous understanding or agreement between them that he should do so. Even if appellee had procured those notes as agent of appellants, and imposed upon them by reserving out of the loan more than the amount he had paid, that would be such a fraud as a court of equity would correct by reduction of the mortgage debt pro tanto, but it would not render the entire debt void, unless it was found to be a mere device for cloaking usury. The decree is affirmed.