                               _____________

                               No. 95-1819EA
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Venture Properties, Inc.,            *
                                     *
                 Appellant,          *
                                     *   Appeal from the United States
     v.                              *   District Court for the Eastern
                                     *   District of Arkansas.
First Southern Bank,                 *
                                     *
                 Appellee.           *
                               _____________

                       Submitted:   November 17, 1995

                         Filed: March 7, 1996
                               _____________

Before RICHARD S. ARNOLD, Chief Judge, HENLEY, Senior Circuit
      Judge, and FAGG, Circuit Judge.
                              _____________


FAGG, Circuit Judge.


     Venture Properties, Inc. (Venture) appeals following a jury verdict
in favor of First Southern Bank (First Southern) on Venture's usury claim.
We affirm.


     Venture owed a total of about $2 million on two promissory notes.
After the notes came due and Venture was unable to pay, the creditors
holding the notes offered to accept $1.3 million in full satisfaction of
the debts if Venture could make the payment by the end of the year.
Because Venture did not have $1.3 million available, Venture worked out a
special arrangement with First Southern, an Arkansas bank.    First Southern
bought the promissory notes from Venture's creditors for $1.3 million.
Venture agreed to make three monthly payments of $20,000 to First Southern
and then purchase the notes for about $1.34 million.    Although Venture made
the monthly payments as agreed, Venture had not raised enough money
to purchase the notes from First Southern at the end of the three months.
First Southern then imposed some financial penalties on Venture, and
Venture protested.     In the following weeks Venture was able to raise some
capital, the parties reached a compromise about how much Venture owed, and
First Southern accepted about $1.4 million as payment in full.


      Venture   then    brought   this    lawsuit,   contending   the   financial
arrangement with First Southern was in essence a usurious $1.3 million loan
from First Southern to Venture.    Based on all the payments Venture made to
First Southern, Venture calculated the "loan" had an annual interest rate
of almost 30% that greatly exceeded the maximum interest rate permitted by
federal usury law.     See 12 U.S.C. § 1831d (1994).      First Southern argued
its arrangement with Venture was not a loan, but a legitimate purchase and
sale agreement not subject to usury restrictions.          First Southern also
raised several affirmative defenses.      A jury returned a general verdict in
favor of First Southern and the district court entered judgment on the
verdict.


      On appeal, Venture argues the district court should have granted
Venture's motion for judgment as a matter of law.         We disagree.    Because
First Southern is located in Arkansas, 12 U.S.C. § 1831d allowed First
Southern to charge the maximum interest rate that Arkansas law would permit
on   the   transaction with Venture, and § 1831d requires us to apply
Arkansas's entire substantive law of usury to determine what that rate was.
See First Nat'l Bank v. Nowlin, 509 F.2d 872, 876 (8th Cir. 1975) (holding
12 U.S.C. § 85 incorporates state substantive usury law);         Greenwood Trust
Co. v. Massachusetts, 971 F.2d 818, 826-27 (1st Cir. 1992) (stating 12
U.S.C. § 1831d parallels 12 U.S.C. § 85 and should be interpreted the same
way), cert. denied, 506 U.S. 1052 (1993).      Under Arkansas law, purchase and
sale agreements are not subject to any usury restrictions unless the
agreements are merely disguised loans.          General Elec. Credit Corp. v.
Robbins, 414 F.2d 208, 209-210 (8th




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Cir. 1969);     Estate of Traylor v. Harmon, 576 S.W.2d 201, 202-03 (Ark.
1979) (en banc);    Haley v. Greenhaw, 360 S.W.2d 753, 756-57 (Ark. 1962).
Whether a purchase agreement is actually a disguised loan is a question of
fact, Haley, 360 S.W.2d at 758, and First Southern presented sufficient
evidence for a reasonable jury to conclude the agreement in this case was
not a loan and thus was not usurious.               For example, First Southern
officials testified they refused Venture's request for a loan and proposed
the purchase and sale agreement as an alternative.           See Geominerals Corp.
v. Grace, 338 S.W.2d 935, 938 (Ark. 1960).          First Southern also presented
evidence that neither Venture nor First Southern treated the transaction
as a loan in their financial records.     See id. at 938-39.       In our view, the
district court properly denied Venture's motion for judgment as a matter
of law and allowed the jury to determine the transaction's true nature.


     Venture     also   challenges   several   of    the    district   court's   jury
instructions.    After carefully reviewing Arkansas usury cases, we conclude
the district court correctly instructed the jury that Venture was required
to prove usury by clear and convincing evidence.               See Renfro v. Swift
Eckrich, Inc., 53 F.3d 1460, 1466 (8th Cir. 1995) (citing Smith v. MRCC
Partnership, 792 S.W.2d 301, 305 (Ark. 1990)).             Venture cannot shift the
burden of proof to First Southern because the transaction was not usurious
on its face.    Medford v. Wholesale Elec. Supply Co., 691 S.W.2d 857, 858-59
(Ark. 1985).    Moreover, the district court did not abuse its discretion in
framing the jury instruction about discounting or by rejecting Venture's
proposed instruction about profit, because the jury instructions as a whole
fairly and adequately explain the applicable law.             See Resolution Trust
Corp. v. Eason, 17 F.3d 1126, 1132 (8th Cir. 1994).


     We also reject Venture's contention that the district court should
not have instructed the jury to consider First Southern's affirmative
defenses of compromise and settlement, accord and




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satisfaction, and estoppel.   Unlike Venture, we believe the record would
allow a reasonable jury to conclude Venture settled its usury claim against
First Southern when Venture negotiated the final "payment in full" for the
notes, and then Venture changed its position and filed a usury claim.
Thus, the district court correctly submitted the affirmative defenses to
the jury.


     Venture also claims the district court violated Federal Rule of Civil
Procedure 39 and abused its discretion by granting First Southern's
untimely request for a jury trial.       We need not consider whether the
district court committed a procedural error because any error would be
harmless.   See Fed. R. Civ. P. 61.      Venture has not asserted it was
prejudiced by the district court's decision to conduct a jury trial rather
than a bench trial, and the record does not reveal any prejudice.    Id.


     Having decided Venture received a fair trial in the district court,
we affirm the judgment for First Southern.


     A true copy.


            Attest:


                 CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




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