#### American Farm Mortgage Company v. Ingraham.

Opinion delivered June 27, 1927.

*582 Robert A. Zebold and Rose, Hemingway, Cantrell & Loughborough, for appellant.

John Baxter, R. W. Wilson and W. W. Grubbs, for appellee. ' *

Kirby, J.,

(after stating the facts). While we think the preponderance of the testimony shows that the loan was, in fact, made by the Rutland Trust Company, at its offices in Vermont, under its agreement with the Virgil R. Coss Mortgage Company upon its presentation of the application and the papers there, it is undisputed that the principal notes for the $4,500 loan were payable to the Virgil R. Coss Mortgage Company, at its office in Muskogee, Oklahoma, and that they only bear 7 per cent, interest, which is not usurious either in Arkansas or Oklahoma, and that, if the whole transaction can be considered as but one, necessarily the place of performance of the principal contract, the payment of the notes, must be controlling so far as the application of the law is concerned, since such a contract is not usurious under the laws of that State.

It is expressly declared in the mortgages that there is no intention to exact usury, and if there is an excessive charge of interest it is made inadvertently and will be credited upon the indebtedness. The testimony shows no intention to charge or take excessive interest for the use of the loan, unless it can be inferred from considering all the notes and mortgages one transaction.'

This court has repeatedly held that, in order to constitute usury, there must be an intent knowingly to take excessive interest, proved by clear and satisfactory evidence. Gregory v. Buley, 9 Ark. 22; Jordan v. Mitchell, 25 Ark. 258; Citizens’ Bank v. Smith, 83 Ark. 31, 102 S. W. 697; Jones v. Phillips, 135 Ark. 578, 206 S. W. 40; and Briant v. CarlLee Bros., 158 Ark. 62, 249 S. W. 577.

The parties will be presumed to have contracted with reference to the place of payment, where the obligation is valid under the laws of that jurisdiction, land, the notes being payable in Oklahoma, it must be held to be an Oklahoma contract, controlled by its laws. Dupree v. Virgil *583 R. Coss Mortgage Co., 167 Ark. 18, 267 S. W. 586, 1119; Whitlock v. Cohn, 77 Ark. 83, 80 S. W. 141; 39 Cyc. 891; 2 Wharton’s Conflict of Laws, § 510D, and 39 Cyc. 899-902.

This case is ruled by the opinion in Smith v. Brokaw, supra, where it is held that, under the laws of Oklahoma, the rule for testing a contract for usury requires computing the interest for the entire time the-loan has to run, if the contract is performed, and that, if the whole amount reserved or exacted as interest for use of the money, spreading the payments over the entire time of the contract, does not exceed a charge of 10 per cent, for the amount loaned, the contract or note is not usurious.

Since the amount reserved or exacted in this case, both for interest and commissions, regarding the whole transaction as one, does not exceed the 10 per cent, interest on the loan for the entire time, it is not usurious, and, even if the whole contract could be regarded as usurious under the laws of that State, the undisputed testimony shows the Rutland Trust Company an innocent purchaser of the principal note, bearing only 7 per cent, interest and the mortgage securing same, and its rights could be in no wise affected by any taint of usury in the entire transaction. Boston Mutual Life Insurance Co. v. Newton, .ante p. 547.

It follows that the'chancellor in holding otherwise erred, and the decree will be reversed and the cause remanded, with directions to enter judgment for the parties at interest for the amounts due them respectively, with foreclosure of the mortgages for payment thereof and priority of payment out of the proceeds realized from the sale of the lands of the claim of the Rutland Trust Company, under its first mortgage and the amount of the taxes paid by it, necessary to the protection of its lien, and for further proceedings according to the principles of equity and not inconsistent with this opinion. It is so ordeted. ' .