Home Bldg. & Sav. Ass'n v. Shotwell, 264.
| Decision Date | 27 April 1931 |
| Docket Number | No. 264.,264. |
| Citation | 38 S.W.2d 552 |
| Parties | HOME BLDG. & SAV. ASS'N v. SHOTWELL et ux. |
| Court | Arkansas Supreme Court |
Appeal from Sebastian Chancery Court; J. V. Bourland, Chancellor.
Suit by the Home Building & Savings Association against F. C. Shotwell and wife. Decree for defendants, and plaintiff appeals.
Affirmed.
The Home Building & Savings Association brought this suit in equity against F. C. Shotwell and Rosa Shotwell, his wife, to foreclose a mortgage on certain lots situated in Fort Smith, Ark. The suit was defended on the ground that the mortgage debt was tainted with usury and, under our Constitution and laws, was illegal and void.
According to the testimony of F. C. Shotwell, in 1929 he made application for a loan with the Home Building & Savings Association, which was a building and loan corporation doing business in Fort Smith, Ark. On the 11th day of April, 1929, he executed a note to said corporation for $1,200, with interest at 10 per cent. per annum. The note recited that it was payable at the office of the association at Fort Smith, Ark., without demand at the rate of $15 per month. The note was signed by F. C. Shotwell and Rosa Shotwell, his wife. On the same day, he executed a mortgage on the lots situated in Fort Smith, involved in this lawsuit, to secure the mortgage indebtedness. The application for the loan was made on the 8th day of April, 1929. The lots were owned by J. P. Barron, and he was represented in the negotiation for the purchase and sale of the lots by his son-in-law, W. F. Norman. Grover H. Webb, a notary public, who was also agent of the Commercial Loan & Investment Company, represented that company in handling the note and furnishing the money. Norman came to the applicant at first and made the arrangement for the loan. Then, Webb took the application. Norman was offering the property in controversy for $650 cash. Shotwell did not have the money, and it was arranged to get it through the company represented by Mr. Webb. Webb told Shotwell that his company would take a note payable to the Home Building & Savings Association for $1,200, payable at $12.65 per month for ninety-six months. Shotwell was to get no money, but Norman was to get $650. The arrangement was that a note should be made to the Home Building & Savings Association for $12.65 per month for ninety-six months without interest. Shotwell made twelve monthly payments at $12.65 per month and then quit paying because they demanded $15 monthly. The whole idea in the trade was to enable Shotwell to pay Norman $650 for the property which Barron was to deed to Shotwell. The agreement was with Webb that all the money furnished by his company was to go to Norman. Shotwell did not know that Webb was trading to Norman an Essex automobile belonging to the Commercial Loan & Investment Company.
According to the testimony of W. F. Norman, he was negotiating to sell the property which belonged to his father-in-law, Mr. Barron, and did not know the fair market value of it. The property consisted of four twentyfive foot lots with a four-room house on it, situated in Fort Smith, Ark. Norman had a contract with Shotwell to sell the property to him for $1,200. Norman told Shotwell that he would get some real estate firm to handle the paper. The note or paper was to run ninety-four or ninety-five months. Webb made the proposition that if his company would agree to it, he would trade Norman a car and $500 in money for the $1,200 note. The car was worth $150, and Norman got $500 and the car from Webb. The agreement between Webb and Norman was signed by them and reads as follows:
On April 8th, Norman and Webb executed an instrument in writing, which reads as follows:
Norman explained to Webb his agreement with Shotwell.
Grover H. Webb testified that he was a notary public and took the acknowledgment to the deed and mortgage in controversy. He was working at the time for the Commercial Loan & Investment Company and was not working for the Home Building & Savings Association. The latter corporation took the mortgage. Webb said that he and Norman reached an agreement and that he did not tell Norman that they were borrowing $650. Webb handled the real estate department of the Commercial Loan & Investment Company, and they occasionally made real estate loans. He testified that the property in question was worth $1,500 at the time the transaction took place.
According to the testimony of L. E. Prall, he was secretary and general manager of the Home Building & Savings Association, and president of the Commercial Loan & Investment Company. The two companies were entirely separate. The former was a building and loan business, and the latter deals in real estate loans. Prall passed on this loan and authorized a disbursement of the money to the proper parties. He examined a check for $690 and said that it showed the disbursement of that amount of money by the Home Building & Savings Association to the Commercial Loan & Investment Company. The car involved in the transaction belonged to the Commercial Loan & Investment Company. The Commercial Loan & Investment Company and the Home Building & Savings Association occupy the same offices in Fort Smith. At the time the transaction was entered into between the parties, Norman delivered to Webb a warranty deed executed by Barron, his father-in-law, which was delivered to Shotwell when the latter and his wife signed the note and mortgage payable to the Home Building & Savings Association. When this was done, the Home Building & Savings Association paid over to Norman $500 and the Essex car, valued at $150.
The chancellor...
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