Farm & Home Savings & Loan Ass'n v. Martin

• Court: Texas Supreme Court
• Writing for the Court: Critz
• Citation: Farm & Home Savings & Loan Ass'n v. Martin, 88 S.W.2d 459, 126 Tex. 417 (Tex. 1935)
• Decision Date: 04 December 1935
• Docket Number: No. 6925.,6925.
• Parties: FARM & HOME SAVINGS & LOAN ASS'N v. MARTIN.

Page 459

88 S.W.2d 459

FARM & HOME SAVINGS & LOAN ASS'N v. MARTIN.

No. 6925.

Supreme Court of Texas.

December 4, 1935.

Error to Court of Civil Appeals of Second Supreme Judicial District.

Action by Dan L. Martin against the Farm & Home Savings & Loan Association. Judgment for defendant was reversed, and judgment rendered by the

Court of Civil Appeals [81 S.W.(2d) 779], and defendant brings error.

Judgment of Court of Civil Appeals reversed and judgment of district court affirmed.

Donald & Donald, of Bowie, and Thos. B. Greenwood, Dan Moody, and J. B. Robertson, all of Austin, for plaintiff in error.

Benson & Benson, of Bowie, and Phillips, Trammell, Chizum, Estes & Edwards and Clayton L. Orn, all of Fort Worth, for defendant in error.

CRITZ, Justice.

This suit was filed in the district court of Montague county, Tex., by Dan L. Martin against Farm & Home Savings & Loan Association, a private corporation, organized and chartered under the laws of Missouri, with a permit to do business in this state. By petition in the district court Martin sought to have declared paid a certain $3,000 nonnegotiable note or contract executed by him and his wife to the association. Also, Martin sought judgment removing the alleged cloud cast upon his title to certain real property by a certain deed of trust executed by himself and wife for the benefit of this association. Trial in the district court resulted in a take nothing judgment in favor of the association. On appeal by Martin to the Court of Civil Appeals at Fort Worth, that court reversed the judgment of the district court, and rendered judgment for Martin canceling the note and deed of trust, and removing the alleged cloud from his title. 81 S.W. (2d) 779, 786. The association brings error.

The instruments involved in the decision of this case consist of the following:

1. Materialman's lien note for $3,000, dated August 15, 1925, due on or before October 15, 1925, bearing 10 per cent. interest from maturity, payable to the order of Waples-Painter Company, and executed by Dan L. Martin and his wife.

2. Mechanic's lien contract, dated August 15, 1925, covering lots 9 and 10, in block 1, Leming addition to the city of Bowie, Montague county, Tex. This instrument was given to secure the above note, and it and the note were for labor and material to be furnished by Waples-Painter Company in building on the above-described lots. The improvements were to be erected for the purpose of enabling Martin and his wife to use such premises as a residence homestead, and they own no other property.

3. Application for stock, signed by Dan L. Martin, directed to this association, and dated July 17, 1925.

4. Application for loan, signed by Dan L. Martin, directed to this association, and dated July 17, 1925.

5. Note for $3,000, executed by Dan L. Martin and his wife, payable to this association, and dated September 19, 1925.

6. Deed of trust executed by Dan L. Martin and wife to Lee B. Ewing, trustee for this association, dated September 19, 1925, and covering the above-described lots and improvements. This deed of trust secures this $3,000 debt with interest.

7. Stock certificate issued by this association for $3,000 of its stock, issued to Dan L. Martin, and dated September 19, 1925. This certificate was not delivered to Martin, but was retained by the association to secure Martin's loan and stock subscription.

8. Receipt for $3,000, executed by Dan L. Martin and wife to this association, and dated September 19, 1925.

We assume that the above note and mechanic's lien contract by Martin and wife to Waples-Painter Company created a valid and subsisting mechanic's lien on the above-described lots and improvements. We also assume that this association furnished the money to take up and extend such note and lien, and that this association was subrogated to all the equities and liens held by the original holder of the Waples-Painter instruments.

We now come to describe in detail the pertinent portions of the instruments referred to above under 3, 4, 5, 6, 7, and 8. These instruments are rather long, and it will require a rather extended statement to detail their pertinent contents.

The application for stock mentioned under 3, supra, signed by Martin and directed to this association, reads as follows:

"Application For Stock In Farm & Home
                     Savings & Loan Association of
                       Missouri, Nevada, Missouri
                                         "July 17, 1925
                

"I, Dan L. Martin, of Bowie, county of Montague, state of Texas, hereby subscribe for 30 shares of Class `D' stock in the above named association, subject to its by-laws, rules and regulations, to which I hereby assent; I understand that agents have no authority to alter or amend the by-laws, rules and regulations of the association; and that the association is not bound by any oral agreement or promises made by anyone other than covered by the by-laws, rules, regulations and contracts issued by the association.

"I understand that if I cash out my stock before maturity one dollar of each one hundred dollars maturity value of the stock will be deducted.

"Two months advance dues $87.00 Date
                  Certificate—Sept. 20, 1925
                  "[Signed] Dan L. Martin
                            "Address—Bowie, Texas
                "Agent—C. A. Pruden
                            "Special Notice.
                

"A payment of two months' dues in advance on all installment stock subscribed for as an investment, must invariably be paid by the applicant to the agent at the time of subscribing. When received at the home office, a certificate of stock and pass book, with the payment of two months' dues paid the agent properly credited therein, will be forwarded to the member.

"Where a loan is desired, application must be made on the regular loan application blanks, provided for that purpose. Agents have no authority to promise loans, but will give any desired information in reference to same. Before a loan is considered promised, application must be sent to the home office for consideration by the board of directors. If they approve same, due notice will be given direct or through one of our agents to the applicant.

"Where stock is taken for the purpose of obtaining an immediate loan, and loan is declined by the board of directors for any cause, the advance payment of two months' dues will be refunded.

"(Subject to new form.)"

The application for loan mentioned under 4, supra, signed by Martin and directed to this association, states that Martin desires to obtain a loan from the association for $3,000, to be secured by a first lien on the property above described; that the property is a homestead; that Martin is married; that the monthly dues on stock in the association will be $24, and the monthly interest payment $19.50; that such monthly payments will continue for ninety-seven months, payable monthly in advance, beginning on the date of the deed of trust; that "the undersigned agrees to comply with the rules and by-laws of the association now in existence or that may hereafter be enacted"; that applicant agrees to pay a membership fee of 1 per cent., and a loan expense fee of one-half of 1 per cent. of the amount borrowed; and that applicant will carry insurance for the benefit of the association. This application contains many other provisions, but we think we have stated those germane here.

The $3,000 note to the association, mentioned under 5, supra, is in words and figures as follows:

"$3,000.00           September 19, 1925
                                "Bowie, Texas
                

"For value received we, or either of us promise to pay to the Farm & Home Savings & Loan Association of Missouri, the following sums of money, viz: The sum of twenty-four dollars, the same being the monthly dues on the thirty shares of the capital stock of said association, represented and evidenced by the certificate thereof numbered 86372 this day pledged by us— to said association to secure a loan of three thousand—dollars; and the sum of nineteen and 50/100—dollars; the same being the interest due monthly upon said sum so borrowed by us.

"And we promise to pay said association at its home office at Nevada, Missouri, all of said sums of money, amounting in the aggregate to forty-three and 50/100— dollars, on the 20th day of each and every month, and continue such monthly payments for a term of ninety-seven months from date hereof; each and every payment herein provided for shall be made at the office of said association in Nevada, Missouri.

"And we further agree in case of default in the payment of said sums of money, or any part thereof, monthly as aforesaid, to pay all fines and penalties assessed on account thereof, in accordance with the rules, regulations and by-laws of said association, and if, in case of default, the stock pledged and the security given to secure said monthly payments shall, upon the sale thereof, be insufficient to repay said association any balance which may be due and owing on said loan, we promise and agree to fully pay and discharge same; if we shall fail for a period of six successive months to pay dues, interest, or other charges required by the by-laws, or shall become indebted to the association in a sum equal to the gross amount of the dues, and interest for a period of six months, then the whole of this obligation shall become due and payable and may be collected by law. The payment of said monthly sum aggregating forty-three and 50/100—dollars each and every consecutive month hereafter until the maturity of said stock and the payment of all fines, penalties, advances, liens and other charges shall entitle all of said certificate of stock to redemption by said association at the par value thereof, and the said shares of stock evidenced by certificate Number 86372 so taken and redeemed shall be taken by said association in full satisfaction of this obligation and deed of trust or mortgage to secure the same; if this note is sued upon or placed in the hands of an attorney for collection we agree to pay...