Imperial Corp. of America v. Frenchman's Creek Corp.

GODBOLD, Circuit Judge:

This diversity suit concerns a claim of usury under Texas law in connection with a large construction loan.

Defendants proposed to build near the campus of a Texas university a dormitory to be owned by them. They secured from an insurance company a commitment for long term permanent financing, and negotiated with plaintiff Imperial for short term financing to provide funds for construction. On August 31, 1966 defendants and Imperial entered into a lengthy and detailed written Loan Agreement providing that Imperial agreed to lend to defendants during the period ending…