Page:Hare v. General Contract Purchase Corp., 220 Ark. 601 (1952).pdf/3

Rh II. That the contract price of the truck was increased from $1,750 for a cash sale, to $2,039.13, because it was a credit sale.

III. That the difference between the face of the note ($1,439.13) and the balance of the truck trade ($1,150) represented two items: one being $148.24, which was the amount of insurance premium, and the other being $140.89, which was not only for interest but for service charge; and that such service charge has been approved by this Court.

The Chancery Court refused Hare's plea of usury, and entered a decree for General Contract Purchase Corporation; and from that decree. Hare has appealed. We discuss the defenses of General Contract Purchase Corporation in the order listed.

I. Bona Fide Holder. This defense is without merit. If the note be in fact usurious, then transferring it to a bona fide purchaser would not improve the situation. Our Constitution (Art. 19, § 13) provides:

"All contracts for a greater rate of interest than ten per cent per annum shall be void, as to principal and interest, and the General Assembly shall prohibit same by law; …"

In the case of German Bank v. DeShon, 41 Ark. 331, this Court held that a note usurious in the hands of the payee is also usurious in the hands of a subsequent purchaser, though he purchased in good faith, before maturity of the note, and without any notice of the usury; and that the reason for such holding is that the Constitution makes a usurious note void, and therefore, it can gain no validity by circulation. The case of German Bank v. DeShon is an outstanding decision in our reports, and has been consistently followed. Under that holding—which we now reaffirm—the defense of bona fide holder, for value, without notice, is without merit against the plea of usury.

II. Increased Selling Price Because of Credit Sale. Appellee says that the price of the truck was increased