Groves v. National Loan & Investment Co.
| Decision Date | 12 February 1937 |
| Docket Number | No. 13507.,13507. |
| Citation | 102 S.W.2d 508 |
| Parties | GROVES et al. v. NATIONAL LOAN & INVESTMENT CO. OF DETROIT, MICH. |
| Court | Texas Court of Appeals |
Appeal from District Court, Tarrant County; A. J. Power, Judge.
Action by Frank M. Groves and others against the National Loan & Investment Company of Detroit, Mich., wherein defendant filed a cross-action against named plaintiff. From a judgment rendered against plaintiffs upon their demand and for defendant on its cross-action, plaintiffs appeal.
Affirmed.
Claude Spratling, of Fort Worth, for appellants.
Frank A. Ogilvie, of Fort Worth, for appellee.
This action was brought by Frank M. Groves and others, alleged to be his adult children by a deceased wife, all of whom we shall hereinafter refer to as plaintiffs, against the National Loan & Investment Company of Detroit, Mich., a building and loan association, incorporated under the laws of the state of Michigan, with a permit to do business in Texas, which we shall hereinafter refer to as defendant, asking for the cancellation of a note and obligation, and a certain deed of trust lien contract securing the payment of the note, and for damages for the use and value of the rentals on certain real estate situated in the city of Fort Worth taken from the possession of plaintiffs by virtue of a writ of sequestration; the description of the real estate is fully set out in the pleadings, and there being no controversy about the identity of the property, it becomes unnecessary for us to describe it here.
The pleadings of plaintiff are lengthy. The first amended petition upon which the case was tried, with the exhibits attached thereto, cover 33 pages of the transcript, and the defendant's answer covers 16 pages. We shall therefore only make such general statement of each as will fairly set forth the matters in issue, essential to a disposition of this appeal.
Plaintiffs alleged that on or about May 1, 1928, they owed the state, county, and city for taxes against the property in controversy in the sum of $732.55, for which amount they desired to procure a loan from defendant to cover. That plaintiff Frank M. Groves went to the office of one J. L. Penry, an agent of defendant in Fort Worth, to negotiate for the loan and that the said Penry, together with John Tarlton, another of defendant's agents in said city, both of whom were authorized to act in the premises, closed the loan in the manner set out; that said agents required him to make application for a loan of $1,000 and to subscribe for ten shares of class K stock in the defendant company, of the par value of $100 per share; that further demand was made of him that he execute his note to defendant in the sum of $1,000 and transfer and assign to it the ten shares of stock, and to execute a deed of trust lien on the real estate to secure the payment of the note according to its terms; that the deed of trust erroneously recited that the note secured was given to procure funds with which to pay the sum of $803.02, due and owing for taxes against the real estate, and subrogated the defendant to a tax lien to that extent, when the true amount of taxes due was as above shown; that the deed of trust further erroneously recited that the remainder of the loan, $196.98 over and above the amount of taxes due, was advanced by the defendant for the purpose of making necessary repairs on the property, when no such repairs were made or contemplated at the time.
Further allegations were made by plaintiffs that the difference between the taxes due in the sum of $732.55 and the sum of $14.40 expenses incurred in closing the loan, aggregating $746.95, and the total amount of the note, $1,000, was withheld by the agents, Tarlton and Penry, as commissions and bonuses for the use and benefit of defendant and that the plaintiffs did not receive said amount at the time of the loan nor at any subsequent date; that the $1,000 note was made payable in 112 monthly instalments of $13.30 each, and by the terms of the deed of trust provisions were made for the application by defendant of $7 thereof to the payment of the principal of the note, and $6.30 to the payment of interest on the obligation; that the issuance to plaintiff of ten shares of stock in said transaction was a subterfuge and fiction to enable defendant to demand and receive usurious interest on the loan of the amount of money actually received by plaintiffs; that plaintiffs in compliance with the note and deed of trust did pay to defendant 59 of said installments and ceased payments for some months, when defendant paid, for the use of plaintiffs, some additional taxes on the property and renewed and extended the remainder of the original indebtedness, together with the amount so paid by it for taxes and demanded of plaintiffs to execute a note therefor in the sum of $900, and again subscribe for class K stock of nine shares in a similar manner to the original transaction.
The various calculations, charges, credits, and payments and the respective distribution of each as shown by the petition are very complicated and difficult for us to thoroughly understand, but we think it sufficient to say that allegation is made that the payments provided for in the original contract render it usurious and by an application of all payments made to the principal, and thus reduced and added to the taxes paid at the time of the renewal obligation would be much less than the $900 for which plaintiff was required to make his note and new deed of trust. In the petition a calculation is made of the amount remaining unpaid on the original note after an application of all payments is made to the principal, and added to the additional taxes paid by defendant at the time of the renewal, less payments subsequently made by plaintiffs, showing a balance due and owing of $111, which amount plaintiffs tendered into court for the use of defendant, and asked for cancellation of the note and lien on the property, for a writ of restitution and for damages for the rentals during the time they had been out of possession by virtue of the writ of sequestration, in the sum of $25 per month.
The defendant's pleadings consisted of a general denial and special answer, denying that either J. L. Penry or John Tarlton was its agent in the transaction pleaded by plaintiffs; that said Penry and Tarlton were local correspondents of defendant but had no authority to do anything violative of the terms and provisions of the by-laws of defendant; that if either of said parties withheld or received from plaintiff Frank M. Groves any sum or sums of money as commissions or bonuses, it was the result of personal contracts and agreements between them and the said Groves and that neither represented defendant in such transactions; that defendant never at any time had knowledge of any such reservations or retentions and received no part thereof, if the said Penry and Tarlton did in fact reserve, retain, or receive from Groves any part of said principal loan; that such acts, if any, on the part of Tarlton and Penry were without the authority, sanction, or ratification by defendant.
Defendant further averred it received from Frank M. Groves, on or about May 1, 1928, an application for a loan of $1,000 for the purpose of paying delinquent taxes against the property in controversy; that there was due the city of Fort Worth for taxes, the sum of $531.72 plus court cost of $11.25, and there was due the state and Tarrant county past-due taxes in the sum of $260.05, and that the remainder of the $1,000, to wit, $196.98, was to be used for repairs on the building on the real estate; that under defendant's plan of making loans, as provided by its by-laws, it requested the said Frank M. Groves to purchase ten shares of its class K stock of the par value of $100 and to execute his note to defendant in the principal sum of $1,000, payable in 112 monthly installments of $13.30 each. As security for the payment of said note, it required the said Groves to transfer the ten shares of stock to defendant and to execute a deed of trust lien on the real estate subrogating defendant to the tax liens held by the taxing bodies to which the delinquent taxes were due; that said Groves complied with all said requirements, whereupon defendant issued its check in the sum of $1,000, payable to Frank M. Groves and John Tarlton jointly, and that the check was subsequently indorsed and cashed, and that Groves received the full amount thereof.
It was further alleged by defendant that simultaneously with the delivery to Groves of the check, he executed and delivered to defendant the following affidavit:
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