American Building & Loan Association v. Fowler

• Decision Date: 30 April 1909
• Docket Number: 6,404
• Citation: 88 N.E. 118,46 Ind.App. 285
• Parties: AMERICAN BUILDING AND LOAN ASSOCIATION v. FOWLER ET AL
• Court: Indiana Appellate Court

88 N.E. 118

46 Ind.App. 285

AMERICAN BUILDING AND LOAN ASSOCIATION v. FOWLER ET AL

No. 6,404

Court of Appeals of Indiana

April 30, 1909

Rehearing denied June 29, 1910, Reported at: 46 Ind.App. 285 at 294.

From Randolph Circuit Court; J. W. Macy, Judge.

Suit by the American Building and Loan Association of Indiana against Mary J. Fowler and others. From a judgment for defendants plaintiff appeals.

Affirmed.

Chambers Pickens, Moores & Davidson, Nichols, Goodrich & Bales, Hawkins, Smith & Hawkins and Lewis C. Walker, for appellant.

John W. Newton, for appellees.

OPINION

MYERS, J.

On August 18, 1894, appellee Mary J. Fowler, and her husband, Thomas L. Fowler, executed to appellant a mortgage on certain real estate in Randolph county, Indiana, and this is a suit to foreclose that mortgage. Appellees John M. Stewart and Matilda Stewart were made defendants and called upon to answer as to their interest in the real estate. Issues were formed and submitted to the court for trial. At the request of the parties the court made a special finding of facts, on which it concluded the law to be with appellees, and rendered judgment accordingly.

The record in this case is properly before us, and the questions for our consideration are presented by the assignments that the court erred in overruling appellant's motion for a new trial, and in its conclusions of law.

The facts, as they appear from the pleadings, are in the special findings, except the fact that appellees Stewart and Stewart are the owners, by purchase from appellee Mary J. Fowler, of a part of the real estate covered by said mortgage. In substance, the facts, as found by the court, are that on August 18, 1894, appellee Mary J. Fowler was the owner of certain real estate in Randolph county, and on that day, her husband joining, she executed to appellant a mortgage thereon. The mortgage states that it is executed and intended as a security for the performance by said mortgagors of certain stipulations and agreements entered into by said parties with said association, as set forth in a bond of even date therewith, in the penalty of $ 800, executed by said mortgagors to said association. As bearing upon the questions now to be considered, the mortgage and bond each provides that Mary J. Fowler shall continue to pay the monthly dues at the rate of fifty cents per share per month, upon her five shares of stock at $ 100 each, and an annual interest and an annual premium of six per cent each, payable monthly; all of the aforesaid payments to continue "until the just and full sum of $ 500, together with said interest and premiums, has been paid to said association." A number of other provisions are found in the mortgage, unnecessary here to be set forth. It is also found that on May 6, 1894, appellant issued to Mary J. Fowler a certificate for five shares of its capital stock in Class A, of the face value of $ 500, but did not deliver the certificate to her until after the bringing of this suit. The certificate of stock, which is set out in the findings, recites that in consideration of the written and printed application for membership and stock, together with full compliance with the charter and by-laws of this association, which are hereby referred to and made a part of this contract, and upon the payment of $ 240, divided into equal monthly instalments of $ 2.50 each, beginning with May, 1894, at the maturity thereof, as provided in article eight, section one, of its by-laws, the association promises to pay to the then legal holder of said stock the sum of $ 500. Reference is made to what is termed "Conditions" printed on the back of the certificate, which appear to be certain sections of the by-laws of said association, the first of which requires that stock in Class A shall be paid for by monthly instalments of fifty cents, and limits the stockholder's liability to ninety-six instalments. The court also found that said applications for membership and stock in said association and for a loan were procured from appellee Mary J. Fowler by fraud and false representations made by appellant, and that said appellee was induced to execute said bond and mortgage and to accept said loan by false and fraudulent representations of appellant, in that its officers and agents falsely represented to her that if she would make application for said five shares of said capital stock, would become a member of said association to that extent, would make an application for a loan of $ 500 and would accept said loan, and, with her husband, would execute a bond evidencing said loan and secure it by a mortgage on her said real estate, upon the payment of ninety-six monthly payments of $ 7.50 each, commencing in May, 1894, said stock would be fully paid for, and said stock would be taken and canceled in full satisfaction of all sums due or to become due under said bond and mortgage; that appellant at the time of making said false and fraudulent representations knew them to be false, and made them and each of them for the purpose of defrauding and deceiving the appellee; that, at the time of making said false and fraudulent statements, Mary J. Fowler was sixty years of age, inexperienced in matters of business, and especially inexperienced in building and loan business, and unfamiliar with building and loan matters, and was ignorant and inexperienced in the form and substance of the certificate, etc., and did not know their legal effect; that she did not know that said representations were false and fraudulent, but relied on them and believed them to be true, and acted in all of said matters under such belief; that Mary J. Fowler, before the commencement of this suit, fully paid to appellant all sums due or to become due under said certificate of stock, by-laws, bond and mortgage.

Upon the facts found, the court concluded that the law was with appellees, and that they should have judgment for their costs.

Appellant, in support of its motion for a new trial, relies solely upon the alleged error of the court in admitting certain testimony. The testimony admitted relates to conversations between one of appellant's agents and appellees John M. Stewart and Mary J. Fowler, at the time the latter executed the bond and mortgage in suit. Witness Stewart, in answer to a question propounded by appellees, calling for what the agent did and said, over the objection of appellant was allowed to answer as follows: "I said to the American Building and Loan Association man: 'How long would it take this stock to pay out, and my aunt have her property clear of any incumbrance, at the rate of $ 7.50 a month?' He said: 'It will pay out in eight years or before.' I said to him: 'Mrs. Fowler would not want to take this loan and not know when it was going to pay out.' He said: 'You can rest assured it will pay out in eight years or before.'"

Mary J Fowler testified as follows: "He [referring to the agent] went on to tell and explain about my taking out a loan, and he said that it would--that the loan would pay out in eight years or even sooner, and went on to relate about other circumstances where loans had paid out in less than eight years. Of course I don't remember all he said. He said quite a good deal, and he read--took out some papers from his pocket and read over these papers. I don't remember just now how the papers did read, but, in substance, that the loan would pay out in eight years, if not sooner--I was to pay $ 7.50 a month." Appellees defended this suit on the ground of payment, and also upon the ground that the application for the loan, as well as the mortgage, was procured by appellant through fraud. It is not denied, and the evidence shows, that the agent of appellant who took Mary J. Fowler's application for the loan had authority to do so; but the sufficiency of the security and...