Court: Supreme Court of Arkansas; May 13, 1968; Arkansas; State Supreme Court
Lyle Brown, Justice, addresses the appeal in Guaranty Financial Corp. v. Harden regarding a trial court decree that deemed a note and mortgage void due to usury related to a construction contract for a shell house. Following the court's mandate, Guaranty Financial Corporation sought a foreclosure decree based on an entitlement to judgment for the contract amount minus $1,000 for correcting deficiencies. The appellees contested this, demanding rescission of the construction contract unless the defects were fixed. Initially resisting the trial court's requirement to remedy the defects, Guaranty later agreed to do so. At the final hearing, Guaranty claimed to have rectified the issues, but appellees argued otherwise, highlighting unresolved problems, particularly with the sheetrock and picture window.
To resolve the conflicting claims, the chancellor personally inspected the property and concluded that while it was not as bad as the appellees claimed, it still had significant issues. Consequently, the chancellor denied the foreclosure and allowed Guaranty thirty days to either remedy the defects or remove the house. Guaranty appealed, arguing that since the uncontested parts of the original decree had become final, the trial court erred in its refusal to enforce the decree. Additionally, Guaranty claimed the chancellor’s findings regarding the defects were not supported by the preponderance of evidence.
The original trial court ruling established that the note and mortgage were usurious and void, while the construction contract was valid. It determined that $1,000 was necessary to correct deficiencies and mandated that Guaranty or its assignor remedy the defects within thirty days or face contract voidance, with the option to remove the house in lieu of repairs. The decree also incorporated the prior court opinion in its entirety, reiterating the findings of fact and orders.
The court orders Guaranty Financial Corporation, or its assignor Joe-Lee Homes, Inc., to rectify defects within thirty days to the satisfaction of defendants James Harden and Erma Lee Harden. If defects are not remedied within this timeframe, the contract will be voided, releasing both parties. Alternatively, the plaintiff or assignor may remove the house from the lot within the same period. The court also mandates that the plaintiff bear all costs associated with the action. The previously appealed portion of the decree does not affect remaining obligations, and the trial court correctly refrained from issuing a foreclosure decree until the plaintiff complied with the construction contract. The court emphasizes that the chancellor's factual findings, especially in cases of contradictory testimony, carry significant weight on appeal, and in this instance, the findings are upheld. The ruling is affirmed, with Judge Fogleman disqualified from participation and Judge George Rose Smith dissenting.
