Robert H. Dudley, Justice.
Donald E. Hutcherson, appellee, purchased a Lincoln Mark V automobile from Union Lincoln Mercury of Little Rock. The parties executed a level payment installment sales contract that provided for the financing of $12,700 at 10% per annum, payable in 48 equal monthly installments of $322.09, with the total finance charge stated as $2,760.32. The figures for the amounts of the monthly installments and of the finance charge were taken from ordinary interest tables supplied by Ford Motor Credit Company, the appellant, to whom Union Lincoln Mercury subsequently assigned the contract.
The contract was executed on July 17,1978, and the first payment was due August 10, 1978, a period of only 24 days, or 6 days less than an ordinary interest month or 7 days less than an exact day interest month. See Thorndike Encyclopedia of Banking and Financial Tables (1980) p. XVI. Each of the succeeding consecutive monthly installments was due on the tenth day so that Hutcherson never would be afforded a full 48 months of 30 days each under the ordinary interest tables, nor would he be afforded four full years of exact day interest. Thus, the contract charged Hutcherson 10% interest for 4 years, or 48 months, while giving him use of that money for only 3.95 years or 47 months and 24 days.
Hutcherson tendered the first payment under protest claiming that the contract was usurious. Ford Credit recomputed the finance charge using exact day interest, or a 365-day year, and tendered Hutcherson a check to cover the excess finance charge but he refused it. He made two more payments under protest and then stopped paying altogether.
Ford Credit filed suit to replvy the automobile for nonpayment of the debt to which Hutcherson pleaded usury. The Chancellor found the contract was usurious. We affirm. In addition, the Chancellor held that Hutcherson was not entitled to a refund of the money he paid under protest. Hutcherson cross-appeals and we also affirm on that issue. Jurisdiction is vested in this Court by Rule 29 (4).
The Arkansas Constitution provides that all contracts for a greater rate of interest than 10% per annum shall be void as to principal and interest. Art. 19, § 13. In Martin’s Mobile Homes v. Moore, 269 Ark. 375, 601 S.W.2d 838 (1980), the only Arkansas case discussing modes of computation of interest, we set out the four main possibilities for computing simple interest as discussed in the Thorndike Encyclopedia of Banking and Financial Tables (rev. ed. 1980) p. VII. Each method may give a different amount of interest, and yet, each would be correct for that particular mode.
Exact day interest is the method which counts each day in the interest period. The basis year to compute interest is 365 or 366 days. We have always approved this method as a non-usurious method of calculating interest when the interest rate is 10% or less. According to the testimony in this case, 10% interest using this method amounts to $2,734.42. Since the contract called for $2,760.30 in interest it was usurious according to this mode of computation.
Ordinary interest counts months and days in the interest period. The basis year is always 360 days and a month is always 30 days. We approved the 360-day rule of computing ordinary interest when the interest rate is 10% or less to allow a practical solution to the virtual impossibility of preparing a standard form of contract that would yield 10% interest per annum on an exact day basis when monthly payments are being made. Ordinary interest allows the striking of a reasonable average as a practical means of reconciling erratic values. It contains no intent to avoid our usury law. We pointed out in Martin that there was nothing insidious about ordinary interest because annual payments of 10% interest upon a $1,000 debt are $100, the same as exact day interest. The only difference arises when interest payments are to be made monthly, quarterly, or semi-annually and we held that months of a standard length can be used because of history and reason.
According to Lake’s Monthly Installment and Interest Tables (6th ed. 1970), an authoritative work we have relied on in many cases, a charge in excess of 10% ordinary interest was made in this case. According to Lake’s tables the interest on $12,700 for 24 days was $85.67. In accordance with Ark. Stat. Ann. § 68-606 (Repl. 1979) the payment is first applied to interest and the balance to principal. Thus $84.67 of the first $322.09 payment is applied to interest and the remaining $237.42 applied to principal leaving $12,462.58 to be financed over 47 months. The maximum monthly payments at 10% ordinary interest were $321.96 and thus the monthly payments contracted for were greater than 10% ordinary interest. This contract was based on ordinary interest and is usurious by its own terms and it is for that reason we affirm.
Ford Credit’s attorneys in an excellent brief contend that the contract does not exceed 10% banker’s interest. That contention is correct. Banker’s interest has a basis year of 360 days but interest is charged on the exact number of calendar days in the interest period. Thorndike, supra, p. XXV and Thorndike Yearbook (1981) p. 45. Thus in any period the interest computed equals 365/360 more than the stated annual interest rate, which would amount to 10.14% annual interest on the three 365 day years involved and 10.16% annual interest on the 366 day year involved. However, the contract at issue was not based on banker’s interest; instead it was based on Ford Credit’s ordinary interest tables. Therefore we do not find it necessary to decide whether a contract which calls for 10% to be computed by the banker’s interest method is usurious. See generally: Comment, Usury: Issues in Calculation, 34 Ark.L.J. 442 (1980).
Appellant Ford Credit next contends that there was no intent to charge excessive interest because Union Lincoln Mercury’s employees had no idea that a change in the first payment date would affect the finance charge. The fact that a clerk did not understand an interest formula does not mean that Ford Credit does not understand the formula.
We have held that the intent required is the intent to charge a certain amount and that if the amount exceeds 10%, there was an intent to charge a usurious rate of interest. Superior Improvement Co. v. Mastic Corp., 270 Ark. 471, 604 S.W.2d 950 (1980). In cases involving manual precalculated interest tables we have stated that an honest error of fact in calculation is not sufficient intent to render a contract usurious. In Sammonds-Pennington Co. v. Norton, 241 Ark. 341, 408 S.W.2d 487 (1966) the creditor looked to an expert for advice on the computation of interest. The expert used “Lake’s Monthly Installment and Interest Tables” but the interest was usurious. We held this to be a mistake of fact as there was no intent on the part of the creditor to charge any amount other than that he was told amounted to 10%. A similar mistake of fact occurred when the chart prepared by Financial Publishing Company of Boston, Massachusetts was in error. Davidson v. Commercial Credit Equipment Corp., 255 Ark. 127, 499 S.W.2d 68 (1973).
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Robert H. Dudley, Justice.
Donald E. Hutcherson, appellee, purchased a Lincoln Mark V automobile from Union Lincoln Mercury of Little Rock. The parties executed a level payment installment sales contract that provided for the financing of $12,700 at 10% per annum, payable in 48 equal monthly installments of $322.09, with the total finance charge stated as $2,760.32. The figures for the amounts of the monthly installments and of the finance charge were taken from ordinary interest tables supplied by Ford Motor Credit Company, the appellant, to whom Union Lincoln Mercury subsequently assigned the contract.
The contract was executed on July 17,1978, and the first payment was due August 10, 1978, a period of only 24 days, or 6 days less than an ordinary interest month or 7 days less than an exact day interest month. See Thorndike Encyclopedia of Banking and Financial Tables (1980) p. XVI. Each of the succeeding consecutive monthly installments was due on the tenth day so that Hutcherson never would be afforded a full 48 months of 30 days each under the ordinary interest tables, nor would he be afforded four full years of exact day interest. Thus, the contract charged Hutcherson 10% interest for 4 years, or 48 months, while giving him use of that money for only 3.95 years or 47 months and 24 days.
Hutcherson tendered the first payment under protest claiming that the contract was usurious. Ford Credit recomputed the finance charge using exact day interest, or a 365-day year, and tendered Hutcherson a check to cover the excess finance charge but he refused it. He made two more payments under protest and then stopped paying altogether.
Ford Credit filed suit to replvy the automobile for nonpayment of the debt to which Hutcherson pleaded usury. The Chancellor found the contract was usurious. We affirm. In addition, the Chancellor held that Hutcherson was not entitled to a refund of the money he paid under protest. Hutcherson cross-appeals and we also affirm on that issue. Jurisdiction is vested in this Court by Rule 29 (4).
The Arkansas Constitution provides that all contracts for a greater rate of interest than 10% per annum shall be void as to principal and interest. Art. 19, § 13. In Martin’s Mobile Homes v. Moore, 269 Ark. 375, 601 S.W.2d 838 (1980), the only Arkansas case discussing modes of computation of interest, we set out the four main possibilities for computing simple interest as discussed in the Thorndike Encyclopedia of Banking and Financial Tables (rev. ed. 1980) p. VII. Each method may give a different amount of interest, and yet, each would be correct for that particular mode.
Exact day interest is the method which counts each day in the interest period. The basis year to compute interest is 365 or 366 days. We have always approved this method as a non-usurious method of calculating interest when the interest rate is 10% or less. According to the testimony in this case, 10% interest using this method amounts to $2,734.42. Since the contract called for $2,760.30 in interest it was usurious according to this mode of computation.
Ordinary interest counts months and days in the interest period. The basis year is always 360 days and a month is always 30 days. We approved the 360-day rule of computing ordinary interest when the interest rate is 10% or less to allow a practical solution to the virtual impossibility of preparing a standard form of contract that would yield 10% interest per annum on an exact day basis when monthly payments are being made. Ordinary interest allows the striking of a reasonable average as a practical means of reconciling erratic values. It contains no intent to avoid our usury law. We pointed out in Martin that there was nothing insidious about ordinary interest because annual payments of 10% interest upon a $1,000 debt are $100, the same as exact day interest. The only difference arises when interest payments are to be made monthly, quarterly, or semi-annually and we held that months of a standard length can be used because of history and reason.
According to Lake’s Monthly Installment and Interest Tables (6th ed. 1970), an authoritative work we have relied on in many cases, a charge in excess of 10% ordinary interest was made in this case. According to Lake’s tables the interest on $12,700 for 24 days was $85.67. In accordance with Ark. Stat. Ann. § 68-606 (Repl. 1979) the payment is first applied to interest and the balance to principal. Thus $84.67 of the first $322.09 payment is applied to interest and the remaining $237.42 applied to principal leaving $12,462.58 to be financed over 47 months. The maximum monthly payments at 10% ordinary interest were $321.96 and thus the monthly payments contracted for were greater than 10% ordinary interest. This contract was based on ordinary interest and is usurious by its own terms and it is for that reason we affirm.
Ford Credit’s attorneys in an excellent brief contend that the contract does not exceed 10% banker’s interest. That contention is correct. Banker’s interest has a basis year of 360 days but interest is charged on the exact number of calendar days in the interest period. Thorndike, supra, p. XXV and Thorndike Yearbook (1981) p. 45. Thus in any period the interest computed equals 365/360 more than the stated annual interest rate, which would amount to 10.14% annual interest on the three 365 day years involved and 10.16% annual interest on the 366 day year involved. However, the contract at issue was not based on banker’s interest; instead it was based on Ford Credit’s ordinary interest tables. Therefore we do not find it necessary to decide whether a contract which calls for 10% to be computed by the banker’s interest method is usurious. See generally: Comment, Usury: Issues in Calculation, 34 Ark.L.J. 442 (1980).
Appellant Ford Credit next contends that there was no intent to charge excessive interest because Union Lincoln Mercury’s employees had no idea that a change in the first payment date would affect the finance charge. The fact that a clerk did not understand an interest formula does not mean that Ford Credit does not understand the formula.
We have held that the intent required is the intent to charge a certain amount and that if the amount exceeds 10%, there was an intent to charge a usurious rate of interest. Superior Improvement Co. v. Mastic Corp., 270 Ark. 471, 604 S.W.2d 950 (1980). In cases involving manual precalculated interest tables we have stated that an honest error of fact in calculation is not sufficient intent to render a contract usurious. In Sammonds-Pennington Co. v. Norton, 241 Ark. 341, 408 S.W.2d 487 (1966) the creditor looked to an expert for advice on the computation of interest. The expert used “Lake’s Monthly Installment and Interest Tables” but the interest was usurious. We held this to be a mistake of fact as there was no intent on the part of the creditor to charge any amount other than that he was told amounted to 10%. A similar mistake of fact occurred when the chart prepared by Financial Publishing Company of Boston, Massachusetts was in error. Davidson v. Commercial Credit Equipment Corp., 255 Ark. 127, 499 S.W.2d 68 (1973). However in cases such as the one before us, we have held that the creditor made a mistake of law in misapplying a formula. For example, in Holland v. Doan, 228 Ark. 340, 307 S.W.2d 538 (1957), the car dealer used a chart furnished by General Motors Acceptance Corporation and apparently charged interest on the basis of one year, or 52 weeks, when the payments were to be made over only 48 weeks. We held the mistake was one of law in applying the wrong formula because the creditor intended to receive a rate of interest that proved to be usurious. The case now before us is the same. The Chancellor held that in charging 10% interest for a 4-year period while the money was actually loaned for only 3.95 years the appellant intended to receive an amount of interest which proved to be usurious and this, in turn, constitutes intent to charge a usurious rate. We cannot state that the holding of the Chancellor was clearly in error.
Ford Credit next argues that the trial court erred in refusing to estop Hutcherson from asserting the defense of usury.
For eight years Hutcherson, a college graduate, had served as an assistant bank examiner. Only two months before he purchased the car he had attended a seminar on the subject of checking the accuracy of annual percentage rates on consumer loans. He was aware of the Arkansas usury law. A clerk for Union Lincoln Mercury testified that on July 17, she first prepared a non-usurious contract which was never executed. In it, she had a first payment period of 45 days. She then prepared a second contract, the one before us, at the direction of the Union Lincoln Mercury salesman. She did not know the reason for the change. The salesman had a stroke before the trial and was unable to testify. Hutcherson testified that he knew of only one contract. He testified that he did not see the automobile until July 16 and he purchased it on July 17, and signed the only contract he saw on that date. He said he wanted the contract to be payable on the 10th, but he had nothing to do with the interest rate or computing the amounts of the payments. Those items were computed by Union Lincoln Mercury’s title clerk who never talked to Hutcherson.
A debtor may be estopped from asserting the defense of usury when the debtor created the infirmity in the contract in order to take advantage of the creditor. Blanks v. American Southern Trust Co., 177 Ark. 832, 9 S.W.2d 310 (1928).
However, here the trial court did not find that estoppel should be applied. While the circumstances here are suspicious, we must consider the evidence in the light most favorable to the appellee and affirm unless the trial court’s decision is clearly erroneous. ARCP Rule 52. We cannot say the Chancellor was clearly in error.
We find no merit in Ford Credit’s final point that the trial court erred in refusing to reform the contract. Usurious written instruments are subject to reformation where there is mutual mistake, or where there has been a mistake on the part of the lender and fraud or other inequitable conduct on the part of the borrower. Turney v. Roberts, 255 Ark. 503, 501 S.W.2d 601 (1973). There was no mutual mistake in this case and the Chancellor did not find fraud or inequitable conduct on the part of Hutcherson and we cannot state that he was clearly in error. We affirm on this issue.
In his cross-appeal, appellee contends that the court erred in allowing Ford Credit to keep the three payments he made under protest. The Chancellor was correct. There are no statutes on the subject. See Ark. Stat. Ann. Title 68, Chapter 6 (Repl. 1979 and Supp. 1981). The common law rule which we adopted is that only excessive interest is recoverable while principal and lawful interest are not. The reasons are brilliantly set out by Justice Hemingway in Josey v. Davis, 55 Ark. 318, 18 S.W. 185 (1892). There is no showing in this case that any of the money actually paid went to excessive interest. Therefore cross-appellant Hutcherson has not shown he is entitled to a refund.
Affirmed on both appeal and cross-appeal.
Hickman, Purtle and Hays, JJ., dissent.