Ralls v. First Federal Sav. and Loan Ass'n of Andalusia

Citation422 So.2d 764
PartiesJohn G. RALLS v. FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF ANDALUSIA, a Corporation. 80-752.
Decision Date24 September 1982
CourtSupreme Court of Alabama

Ab Powell, III of Powell & Powell, Andalusia, and William D. Melton, Evergreen, for appellant.

W. Sidney Fuller of Tipler, Fuller & Sikes, Andalusia, for appellee.

ALMON, Justice.

This case involves a dispute over a loan commitment issued by First Federal Savings and Loan Association of Andalusia (First Federal) to John G. Ralls. The defense to Ralls's action is accord and satisfaction.

Ralls acquired a franchise permitting him to operate a Days Inn Motel. In 1978, he began investigating the feasibility of constructing and operating a motel in Evergreen, Alabama. He discussed construction loans with several lending institutions and on August 28, 1978, Ralls submitted a loan application for $600,000 to First Federal. He discussed the proposed loan with Miss Maggie Rodgers, the Executive Vice-President and Managing Officer of First Federal. Miss Rodgers testified that at the time the loan application was made, she told Ralls there would be an eight-month completion date on any construction loan. On October 27, 1978, First Federal sent Ralls a commitment letter stating in part:

"The loan was approved for 20 years at 10% interest rate. The 10% interest rate is guaranteed subject to your paying 1% of our 2% initial service charge." (Emphasis added.)

The letter made no mention of a completion date.

On December 21, 1978, Ralls met with Miss Rodgers to accept the commitment. At that time he paid $6,000 representing 1% of the initial 2% service charge. Miss Rodgers testified she made a notation on her copy of the commitment letter that the completion date would be eight months from December 21, 1978, and also brought this to Ralls's attention. Miss Rodgers made another notation on the letter stating that $6,000 had been paid "guaranteeing [the] 10% rate."

Ralls testified that he had not been told of the completion date at the time of the loan application and that it was only mentioned by Miss Rodgers after he had paid the $6,000 on December 21, 1978. His testimony as to the completion date was as follows:

"Well, I went over to pay six thousand dollars and after she wrote the check out, she said, 'we're going to have to put a date on it,' and she came up with the August 21st and I told her that I had never built a motel and what if I didn't get it finished by then and she said, 'we've never failed to give anybody an extension yet,'--that's what she told me--so I didn't worry about the date ...."

Ralls also testified that he did not know the completion date had been put on First Federal's copy of the commitment letter until shortly before the trial and that the first time a completion date was mentioned was after he had paid the $6,000. He further testified that he told First Federal that he did not want the loan unless it would be at the 10% interest rate.

Miss Rodgers filled out the check and check stub for Ralls when he paid the 1% fee. On the check stub she wrote: "1% guaranteeing 10% interest for 600,000." On the check itself she wrote "1%--10% interest."

On January 9, 1979, Miss Rodgers sent a letter to the Conecuh County Bank stating First Federal had received $6,000 from Ralls that guaranteed him a 20-year loan at 10% interest. The letter authorized interim financing through the Conecuh County Bank. This letter made no mention of a completion date.

On April 12, 1979, Miss Rodgers notified Ralls that the First Federal board of directors did not approve extension of his 10% loan past August 21, 1979, but would be happy to extend the loan for a few months at the prevailing interest rate at the time of closing.

When it became apparent that the project would not be completed by August 21, 1979, Ralls wrote Miss Rodgers on August 5, 1979, asking for an extension. Miss Rodgers wrote Ralls on August 9, 1979, stating the board of directors could not extend the loan at 10% but could extend the loan commitment until the motel was completed, subject to the prevailing interest rate at the time of closing.

The motel was not completed until a few days before the loan was closed at 12% on December 5, 1979. Interest rates at that time had increased considerably.

Ralls subsequently filed suit against First Federal, claiming breach of contract, fraud, and misrepresentation and deceit. At the close of all the evidence, the trial judge granted First Federal's motion for a directed verdict.

Ralls contends the trial court misinterpreted the law when it held that the loan closing on December...

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9 cases
  • International Paper Co. v. Whilden
    • United States
    • Alabama Supreme Court
    • 5 Abril 1985
    ...Co., 351 So.2d 560 (Ala.1977); Ancora Corp. v. Miller Oil Purchasing Co., 396 So.2d 672 (Ala.1981); Ralls v. First Federal Savings and Loan Association of Andalusia, 422 So.2d 764 (Ala.1982); Board of School Commissioners of Mobile County v. Wright, 443 So.2d 35 (Ala.Civ.App.), rev'd on oth......
  • McDurmont v. Crenshaw
    • United States
    • Alabama Supreme Court
    • 25 Abril 1986
    ...to examine the record to determine if there is a scintilla of evidence to support plaintiff's complaint. Ralls v. First Federal Savings & Loan of Andalusia, 422 So.2d 764 (Ala.1982). A directed verdict is proper only where there is a complete absence of proof on a material issue, or where t......
  • Shufford v. Integon Indem. Corp., CIV.A. 99-T-441-N.
    • United States
    • U.S. District Court — Middle District of Alabama
    • 4 Noviembre 1999
    ...for an improper threat outlined in § 176(2). But more to the point, the Alabama Supreme Court held in Ralls v. First Federal Savings and Loan, 422 So.2d 764, 766 (Ala.1982), that a plaintiff can rebut the affirmative defense of accord and satisfaction by demonstrating that his decision was ......
  • Veolia Water N. Am. Operations Servs., LLC v. SSAB Ala., Inc.
    • United States
    • U.S. District Court — Northern District of Alabama
    • 24 Junio 2019
    ...demands are made, under such circumstances that the victim has little choice but to accede thereto." Ralls v. First Fed. Sav. And Loan Ass'n of Andalusia , 422 So.2d 764, 766 (Ala. 1982) (quoting 17 C.J.S. Contracts § 177 (1963) ). The evidence does not fit this exception. Specifically, the......
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