Perryman v. Hackler

Richard PERRYMAN and Mae Perryman v. Lee
HACKLER

95-788                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
               Opinion delivered February 19, 1996


1.   Appeal & error -- review of chancery cases -- when reversed. -
     - Chancery cases are reviewed de novo, and the court does not
     reverse the chancellor's factual findings unless they are
     clearly erroneous; chancellors have broad powers to fashion
     any remedy that is reasonable and justified by the proof. 

2.   Contracts -- appellants contention in error -- authority cited
     by appellants inapplicable. -- Appellants' contention that, in
     addition to recovering twice the amount of interest they paid
     under the contract to appellee, they were also entitled to
     recover twice the amount of interest paid by their assignors,
     was in error; of the two authorities relied upon by
     appellants, Ark. Code An.  4-57-107 was repealed by
     implication in 1982 by Amendment 60 to the Arkansas
     Constitution and Bailey v. Commerce Union Bank, 223 Ark. 686,
     269 S.W.2d 314 (1954) was likewise not controlling since
     Bailey was based on Act 39 of 1887; even if section 4-57-107
     and Bailey were applicable, they would not support appellants'
     argument that they were entitled to recover twice the interest
     paid by their assignors; section 4-57-107 and Bailey provided
     nothing more than a rule of law establishing that an assignee
     has standing to sue for recovery of usurious interest paid
     under a contract that was assigned.

3.   Usury -- cause of action for usury not assignable -- no error
     in trial court's limiting appellants' award to twice the
     amount of interest they paid. -- Although it is well-settled
     that an executory contract for the sale of land is assignable,
     Ark. Code Ann.  4-5-102 (1987), and that the assignor need
     not be a party, Ark. Code Ann.  16-61-112 (1987), it is not
     the law that a cause of action for usury is assignable;
     appellants cited no authority supporting their argument;
     accordingly, the court could not say the trial court erred in
     limiting appellants' award to twice the amount of interest
     they paid.  

4.   Appeal & error -- sanctions requested by appellee declined --
     no authority cited for such sanctions. -- Although appellee
     accused appellants of libel regarding the "fruits of the
     crime" statements made in their brief and requested sanctions
     from the court, the court declined to do so where appellee
     cited no authority for the court to impose any sanctions on
     appellants concerning the contents of their brief.

5.   Usuary -- usury voids the contract only to the extent of
     unpaid interest. -- Although former law voided the entire
     contract if it exceeded the maximum rate of lawful interest,
     the express intent of Amendment 60 was that the taint of usury
     voids the agreement only to the extent of unpaid interest.

6.   Usury -- appellants had defaulted, acceleration and forfeiture
     provisions were triggered -- relationship of landlord-tenant
     existed pursuant to the terms of the contract. -- Where it was
     undisputed that appellants were in default when they filed
     suit, the acceleration and forfeiture provision of the
     contract was triggered notwithstanding the usurious interest,
     and pursuant to the express terms of the contract, the
     landlord-tenant relationship arose; the trial court did not
     err in concluding that the relationship of landlord-tenant
     existed pursuant to the terms of the contract.

7.   Contracts -- judgment for unpaid rent proper -- evidence
     supported chancellor's finding. -- Appellants' contention that 
     the trial court erred in awarding appellee judgment for unpaid
     rent because, due to the amount of usurious interest paid by
     them under the contract, they did not owe appellee anything at
     the time suit was filed, was entirely without merit;
     appellants cited absolutely no authority that their right
     under Article 19, Section 13 to recover twice the interest
     paid arose without proceedings in law or equity and there was
     evidence to support the chancellor's finding that the fair
     rental value of the home was $330.00 per month; the chancellor
     awarded judgment to appellee based on twice that amount
     consistent with the unlawful detainer law; on this record, the
     court could not say the chancellor was clearly erroneous.

8.   Contracts -- contract for sale terminated by its own terms --
     denial of appellants' request for reformation proper. --    
     Given the proof that appellants defaulted on their payments
     prior to their discovery of the usurious rate of interest, the
     chancellor was not clearly erroneous in concluding the
     contract for sale terminated by its own terms and in
     consequently denying appellants' request for reformation.

9.   Appeal & error -- arguments made without argument or citation
     to authority -- arguments not considered. -- Where appellants'
     allegations were made succinctly, without convincing argument
     or citation to authority for the altered results requested and
     it was not apparent without further research that these
     arguments were well-taken, the court did not consider them.

10.  Appeal & error -- court requested to disregard cross-appeal if
     no error found in rulings on direct appeal -- arguments not
     addressed. -- Where appellee introduced his arguments on
     cross-appeal with the statement that the court disregard his
     cross-appeal if the court found no error in the rulings on
     direct appeal, the court did not address the arguments raised
     on cross-appeal.  


     Appeal from Crawford Chancery Court, Division IV; Mark Hewett,
Chancellor; affirmed on direct appeal; cross-appeal deemed moot.
     Thurman Ragar, Jr., for appellants.
     Bagby Law Firm P.A. , by:  Philip A. Bagby, for appellee.

     Donald L. Corbin, Justice.Associate Justice Donald L.
Corbin, 2-19-96 *ADVREP7*





RICHARD PERRYMAN and MAE
PERRYMAN,
                   APPELLANTS/
              CROSS-APPELLEES,

V.

LEE HACKLER,
                     APPELLEE/
              CROSS-APPELLANT,



95-788



APPEAL FROM THE CRAWFORD COUNTY
CHANCERY COURT, DIVISION IV,
NO. E-94-330 (IV),
HON. MARK HEWETT, CHANCELLOR,



AFFIRMED ON DIRECT APPEAL;
CROSS-APPEAL DEEMED MOOT.




     Appellants, Richard and Mae Perryman, appeal and appellee, Lee
Hackler, cross-appeals from the judgment of the Crawford County
Chancery Court that found the contract of sale for real property
between appellants as purchasers and appellee as seller to be
usurious; awarded appellants $6,696.28, twice the amount of
interest they paid; awarded appellee $6,224.52, comprised of
$284.52 in principal accrued up to the time appellants defaulted
and $5,940.00 in rent accrued after appellants defaulted; found
that the net judgment in favor of appellants, $471.76, could be
satisfied by allowing appellants to remain in possession of the
property for twenty-two additional days; directed appellants to
vacate the property no later than the twenty-second day; and
ordered both sides to pay their own costs and attorneys' fees. 
This case presents questions about usury.  Jurisdiction is
therefore properly in this court pursuant to Ark. Sup. Ct. R. 1-
2(a)(13).  We find no error and affirm.
                       PROCEDURAL HISTORY
     Pursuant to the contract at issue dated March 6, 1992,
appellee sold to Paul and Tina Akin, Lot 145, Royal Oaks Addition
to the City of Van Buren, Arkansas.  The terms of the contract were
a purchase price of $32,145.00, to be financed at twelve percent
per annum with $500.00 down and monthly installments of $330.65
until liquidation of the debt.  The contract stated it was not to
be assigned without appellee's written consent, that failure to
make any installments would result in forfeiture to appellee, and
that upon forfeiture, the relationship of landlord and tenant would
arise between appellee and the purchasers.  The contract was signed
by appellee, Paul Akin, and Tina Akin.  On the reverse side of the
one-page contract, on February 8, 1993, Paul and Tina Akin assigned
all their "right, title, and interest in this contract over to
Richard and Mae Perryman."
     Appellants filed suit on May 9, 1994, claiming the contract
was usurious and void as to interest due, seeking recovery of
$13,853.58 as twice the total interest paid under the contract,
seeking reformation of the contract to provide for monthly
installments on the amount of principal owed, and seeking restraint
of appellee's actions against appellants for non-payment of rent. 
     Appellee moved to dismiss the complaint for failure to state
facts upon which relief could be granted, arguing that usury is an
affirmative defense rather than a cause of action, that, due to the
lack of appellee's written consent, there was not a valid
assignment of the contract from the Akins to appellants, that the
Akins are necessary parties to this action, that there is a pending
case between these parties in municipal court on appellee's
complaint for unlawful detainer, and that appellants should respond
in that court.  The trial court denied the motion to dismiss,
ruling appellants had stated sufficient facts to permit the court's
denial of the motion.
     After a bench trial in which the only witnesses were appellee
and appellants, the trial court announced its ruling from the
bench.  The written judgment and decree was entered in accordance
with that ruling.  Appellants raise five points for reversal on
direct appeal.  Appellee, as cross-appellant, raises four points on
cross-appeal should we reverse on direct appeal.  We affirm on
direct appeal and do not reach the contingent cross-appeal.
                       STANDARD OF REVIEW
     We review chancery cases de novo, and do not reverse the
chancellor's factual findings unless they are clearly erroneous. 
Lotz v. Cromer, 317 Ark. 250, 878 S.W.2d 367 (1994).  Chancellors
have broad powers to fashion any remedy that is reasonable and
justified by the proof.  Id.
                          DIRECT APPEAL
     As their first point for reversal, appellants contend that, in
addition to recovering twice the amount of interest they paid under
the contract to appellee, they are also entitled to recover twice
the amount of interest paid by their assignors, Paul and Tina Akin. 
Appellants cite Ark. Code Ann.  4-57-107 (Repl. 1991) as giving an
assignee of a contract standing to obtain relief from a usurious
contract.  Appellants also rely on Bailey v. Commerce Union Bank,
223 Ark. 686, 269 S.W.2d 314 (1954), a pre-Amendment 60 case which
held that, pursuant to Act 39 of 1887, of which section 4-57-107
was a part, the defense of usury was not personal to the original
borrower and could therefore be raised by the borrower's assignee.
     Appellants rely upon such authority in error.  Section 4-57-
107 was repealed by implication in 1982 by Amendment 60 to the
Arkansas Constitution.  Henslee v. Madison Guar. Sav. and Loan
Ass'n, 297 Ark. 183, 760 S.W.2d 842 (1988).  In addition, since
Bailey, 223 Ark. 686, 269 S.W.2d 314, was based on Act 39 of 1887,
later codified in part as section 4-57-107, Bailey is likewise not
controlling here.  We observe that, even if section 4-57-107 and
Bailey were applicable to this case, they would not support
appellants' argument that they are entitled to recover twice the
interest paid by their assignors.  Section 4-57-107 and Bailey
provided nothing more than a rule of law establishing that an
assignee has standing to sue for recovery of usurious interest paid
under a contract that was assigned.
     Although it is well-settled that an executory contract for the
sale of land is assignable, Ark. Code Ann.  4-5-102 (1987) and
Corcorren v. Sharum, 141 Ark. 572, 217 S.W. 803 (1920), and that
the assignor need not be a party, Ark. Code Ann.  16-61-112
(1987), it is not the law that a cause of action for usury is
assignable.  See National Fire Ins. Co. v. Pettit-Galloway Co., 157
Ark. 333, 248 S.W.2d 262 (1923).  In short, appellants have cited
no authority supporting their argument.  Accordingly, we cannot say
the trial court erred in limiting appellants' award to twice the
amount of interest they paid.  
     While arguing this point in their brief, appellants contend
that one who knowingly charges a usurious interest rate should not
be allowed to "keep the fruits of his crime."  Although Article 19,
Section 13 of the Arkansas Constitution provides the General
Assembly with authority to enact legislation providing punishment
for one who knowingly charges a usurious rate of interest, the
General Assembly has not done so.  Appellee has accused appellants
of libel regarding the "fruits of the crime" statements made in
their brief and has requested sanctions from this court.  We
decline to do so.  Appellee has cited no authority for this court
to impose any sanctions on appellants concerning the contents of
their brief.  The only authority for sanctioning comments in a
brief is when the comments are disrespectful to a trial court. 
Ark. Sup. Ct. R. 1-5.
     The trial court found that the contract of sale terminated in
April 1994 due to appellants failure to make their installment
payments, and thereupon reverted to a month-to-month lease pursuant
to the following terms of the contract:
          And it is hereby further covenated [sic] and agreed
     by and between the parties hereto, that immediately upon
     failure to pay any of the installments above mentioned,
     or the annual interest on the balance, from year to year
     when due, all previous payments shall be forfeitured
     [sic] to the party of the First part, and the relation of
     landlord and tenant shall arise between the parties
     hereto, and in the event of failure or refusal of the
     Second party to deliver possession of said premises to
     the First party, after three days' notice and demand, in
     writing, for the same, the First party shall have the
     right to proceed by Writ of Possession, as in the cases
     of unlawful Detainer.
For their second point for reversal, appellants contend this
finding was erroneous because the amount due them on their claim
for usury offset any amount that was due under the contract for the
period that they did not make payments.  Testimonies from both
appellants revealed that they continued to live in the house
without making any payment to appellee from April 1994, one month
prior to when the present suit for usury was filed, until January
1995, when the suit was tried.  Appellants explain that their non-
payment was an effort to mitigate damages by reducing the amount of
interest they could recover as usuriously paid.  
     The short answer to this argument is that the current usury
law only voids the contract as to "unpaid interest."  Art. 19,
 13(a)(ii).  As this court observed in Henslee, 297 Ark. 189, 760 S.W.2d 842, when distinguishing Amendment 60's change to the usury
law, although former law voided the entire contract if it exceeded
the maximum rate of lawful interest, "[t]he express intent of
Amendment 60 is that the taint of usury voids the agreement only to
the extent of unpaid interest[.]"  Id. at 189, 760 S.W.2d  at 845.
     It is undisputed that appellants were in default when they
filed suit.  Therefore, the acceleration and forfeiture provision
of the contract was triggered notwithstanding the usurious
interest, and pursuant to the express terms of the contract, the
landlord-tenant relationship arose.  The trial court did not err in
concluding that the relationship of landlord-tenant existed
pursuant to the terms of the contract.
     As their third point for reversal, appellants contend the
trial court erred in awarding appellee judgment for unpaid rent
because, due to the amount of usurious interest paid by them under
the contract, they did not owe appellee anything at the time suit
was filed.  This argument is entirely without merit.  Appellants
cite absolutely no authority that their right under Article 19,
Section 13 to recover twice the interest paid arose without
proceedings in law or equity.  There was evidence to support the
chancellor's finding that the fair rental value of the home was
$330.00 per month.  The chancellor awarded judgment to appellee
based on twice that amount consistent with the unlawful detainer
law.  See Ark. Code Ann.  18-60-309 (1987).  On this record, we
cannot say the chancellor was clearly erroneous in this regard.
     As their fourth point for reversal, appellants challenge the
chancellor's denial of their request to reform the contract to
provide that the principal due be paid in equal monthly
installments over the term of the contract.  Appellants rely on
Lotz, 317 Ark. 250, 878 S.W.2d 367, in which this court affirmed,
as modified, the reformation of a usurious installment sales
contract for real property.  Appellant's reliance on Lotz is wholly
misplaced.  Lotz did not involve defaulting purchasers such as the
present case does, and is therefore not controlling.  In fact, the
purchasers in Lotz continued to make payments under the contract
even after they filed suit.  In addition, there is no indication in
Lotz that the contract terminated by operation of its terms such as
in the present case.  
     Given the proof that appellants defaulted on their payments
prior to their discovery of the usurious rate of interest, we
cannot say the chancellor was clearly erroneous in concluding the
contract for sale terminated by its own terms and in consequently
denying appellants' request for reformation.
     As their final point on direct appeal, appellants cite Winn v.
Chateau Cantrell Apartment Co., 304 Ark. 146, 801 S.W.2d 261
(1990), and request this court to alter the results of the case on
de novo review.  There are only two allegations made under this
point that were not made previously:  one, that this court should
set aside the writ of assistance entered in favor of appellee to
assist him in taking possession of the property and issue a writ in
favor of appellants; and two, that this court should award
appellants their attorneys' fees and costs.  Appellants'
allegations are made succinctly, without convincing argument or
citation to authority for the altered results requested.  It is not
apparent without further research that these arguments are well-
taken; therefore, we do not consider them.  Thomson v. Littlefield,
319 Ark. 648, 893 S.W.2d 788 (1995).
                          CROSS-APPEAL
     Appellee introduces his arguments on cross-appeal with the
statement that this court disregard his cross-appeal if we find no
error in the rulings on direct appeal.  Therefore, consistent with
appellee's request, we do not address the arguments raised on
cross-appeal.  Farm Credit Bank v. Miller, 316 Ark. 388, 872 S.W.2d 376 (1994); John Cheeseman Trucking, Inc. v. Dougan, 313 Ark. 229,
853 S.W.2d 278 (1993); Kulbeth v. Purdom, 305 Ark. 19, 805 S.W.2d 622 (1991).  
     The chancellor's judgment and decree is affirmed on direct
appeal.  The contingent cross-appeal is rendered moot consistent
with appellee's request.  John Cheeseman Trucking, 313 Ark. 229,
853 S.W.2d 278.