Intermountain Building and Loan Association v. Casper Mutual Building and Loan Association

• Citation: 28 P.2d 103,46 Wyo. 394
• Decision Date: 09 January 1934
• Docket Number: 1813
• Parties: INTERMOUNTAIN BUILDING AND LOAN ASSOCIATION v. CASPER MUTUAL BUILDING AND LOAN ASSOCIATION
• Court: United States State Supreme Court of Wyoming

28 P.2d 103

46 Wyo. 394

INTERMOUNTAIN BUILDING AND LOAN ASSOCIATION v. CASPER MUTUAL BUILDING AND LOAN ASSOCIATION

No. 1813

Supreme Court of Wyoming

January 9, 1934

APPEAL from the District Court, Natrona County; C. D. MURANE, Judge.

Action by Intermountain Building and Loan Association, a Corporation, against Casper Mutual Building and Loan Association, a Corporation, and others, to compel the release of a mortgage upon real property acquired subject to an existing encumbrance held by defendant corporation. Plaintiff corporation set up a cross-petition asking the foreclosure of the mortgage. From a judgment in favor of defendant and cross-petitioner, the plaintiff appeals.

Affirmed as modified.

For the appellant there was a brief and the cause was argued orally by Mr. M. L. Bishop of Casper.

Respondent is estopped to claim any amount in excess of the amount represented to be due on the mortgages at the time appellant purchased the property. Williams v. Verity, et al (Mo.) 73 S.W. 732; Coal & Ice Co. v. Ottumwa Belle (D. C.) 78 F. 643; Beardsley v. Foot, 14 O. S 414; Kilpatrick v. Loan Ass'n, 12 A. 754; Fulton Ass'n. v. Greenlea (Ga.) 29 S.E. 932; Cooper v. Brazelton (Texas) 135 F. 476; Moore v Smith (Ind.) 64 N.E. 623; Nickerson v. Ins. Co. 59 N.E. 814; Pierson v. Pierson (Mich.) 100 N.W 457; Borden v. Hutchinson (N. J.) 49 A. 1088; Sawyer v. Bldg. Ass'n. (Mich.) 61 N.W. 521; Welland v. Hathaway, 8 Wend. 483; 19 R. C. L. 411; Pollock v. Pegues (S. C.) 51 S.E. 514, 521; Harbeck v. Pupin (N. Y.) 39 N.E. 722; Wither v. Company (Mo.) 126 S.W. 432, 439; Robinson v. Vicksburg (Miss.) 54 So. 858; Madson v. Company (Wash.) 82 P. 718; Draper v. Ass'n (N. Y.) 82 N.E. 755. Equitable estoppel is the effect of the voluntary conduct of a party, whereby he is precluded from asserting rights which might perhaps have otherwise existed, as against another person who, in good faith relied thereon and was induced to change his position for the worse. See: 2 Pomeroy's Equity Jurisprudence, Sec. 804-805; Pemberton v. Price (Ky.) 139 S.W. 742. As to construction of instruments and circumstances relating to the subject of estoppel, see: Balch v. Arnold (Wyo.) 59 P. 434. As it is impossible for appellant to discharge the mortgage indebtedness according to the terms of the mortgages, all payments made to respondent should be applied on interest and principal of the loan and not on stock. Continental Ass'n v. Miller (Fla.) 33 So. 404; Chapman v. Young, 65 Ill.App. 131. This rule applies where the association is insolvent. Bingham v. Trust Company (Ind.) 61 N.E. 29; Windsor v. Bandel, 40 Md. 72; Buist v. Bryan (S. C.) 21 S.E. 537; Western Loan Co. v. Desky (Utah) 68 P. 141. Payments on account of stock should be regarded as payments on the loan. Stevens v. Ass'n (Idaho) 51 P. 779, 986; Fitzgerald v. Ass'n (Minn.) 57 N.W. 1066; Howells v. Ass'n (Utah) 60 P. 1025; Ashton v. Same (Utah) 60 P. 1029. The method in which respondent arrived at its losses was illegal and had no binding effect upon the property of this appellant. This is clearly established by the evidence. Capitol Hill Association v. Hilton, 1 Mackey 107. The management of respondent association was irregular and injudicious. Bettle v. Ass'n 53 A. 11. The judgment is excessive, unconscionable and against public policy.

Howells v. Loan & Bldg. Co., supra; Ashton v. same, supra.

For the respondent there was a brief by S. J. Lewis and R. H. Nichols of Casper, and Irwin Clawson of Salt Lake City, Utah, and oral argument by Mr. Clawson.

Rules and principles governing the operation of mutual building associations differ from those relating to non-mutual associations. Respondent was a mutual company, governed by Wyoming Statutes, Chapter 331, Comp. Stats. 1920, Section 5221, 5217, C. S. 1920. Appellant clearly understood the nature of the encumbrance on the property, which was fully set forth in the deed drawn by appellant's agent. Representation made as to the maturity of the stock was understood to be an estimate only; not binding on a mutual building association. Clause v. Columbia Association, 16 Wyo. 450. A mere expression of opinion as to the likelihood of the happening of a future event, cannot be made the basis of an estoppel. 2 Pomeroy's Equity Jurisprudence (3d Ed.) Sec. 808, page 1435; Bigelow on Estoppel, 6 Ed. page 636; Elliott v. Whitmore, 65 P. 70; 21 C. J. 1142. There is nothing in the record on which to base plaintiff's claim that we represented to appellants that they could pay $ 1440.00 in installments of $ 80.00 per month. Capitol Association v. Hilton cited by appellant is distinguishable from the case at bar. The statements of an officer of a building association as to the time of the maturity of the series will be treated as an estimate only. Clause v. Ass'n, supra; Lake v. Association, 72 Ala. 207; Johnson v. Ass'n, 104 Pa. St. 394; Hammerslough v. Ass'n, 79 Mo. 80; Sunderheim Building Associations, page 92. The contention that the association was unable to complete its part of the mortgage is without merit. Rothwell v. Knight, 258 P. 576; 3 C. J. 692; 8 Bancroft's Code Practice and Remedies p. 8477. Re Building & Loan Association (N. J.) 71 A. 251 and French v. Johnson, (N. J.) 79 A. 681, cited by appellant differ on the facts. The point urged that respondent's method of ascertaining losses was illegal, seems to be based upon the fact that appellants were not stockholders. They could have been if they had asked to have the stock transferred. They were the ones beneficially interested in it. They could not be permitted to profit by their own failure to transfer such stock. Thompson on Building Associations, page 298. The only evidence of value before the court was that these shares were worth $ 98.00, and was received without objection. There is no specification of error that the management was irregular and injudicious. An officer is not liable for mistakes in judgment but only for negligence. Thompson on Building Associations, page 163. On the point of unconscionable contract, appellant cites Howells v. Building Ass'n (Utah) 60 P. 1025. The case is clearly not in point. The defendant here is a mutual company, all stockholders sharing equally in loss and profits. The loan has been running thirteen years. Appellant assumed and agreed to pay an $ 8,000.00 mortgage, less than 15 per cent minimum premium, leaving $ 6800.00, by payments on the stock of $ 40.00 per month until the stock matured, and to also pay interest on the loan until maturity of stock. Appellant now seeks to discharge a $ 6800.00 obligation by payments of $ 3,920.00 on the stock. Other borrowers are not receiving a larger credit on their stock than the amount paid in on it. Investors are not receiving more than they have paid on their stock. Appellant is a building association and far better able to judge the risk it ran than the general public who compose the other unfortunate investors and borrowers of the Casper Mutual. Appellant should be required to bear its own burden and the judgment should be affirmed.

BLUME, Justice. KIMBALL, Ch. J., and RINER, J., concur.

OPINION

BLUME, Justice.

The defendant in this case is a mutual building and loan association under the laws of this state, issuing stock of the par value of $ 200 each, in series, estimated to mature in 96 months by the earnings of the association and the payment on each share of the sum of $ 1.00 each month. One Howard Miller and his wife became stockholders in the association, acquiring 40 shares of stock in series 9, and on October 27th, 1920, borrowed money from it, giving their note for the sum of $ 4000 secured by a mortgage on lot 5, block 14, in Butler's Addition to Casper. On May 27, 1921 Miller and his wife borrowed some more money from the association, and gave their note for $ 4000, secured by a mortgage on the same property above described. The actual amount of money received by the Millers on the two loans was $ 4600, they bidding a premium each time of 42 or 43 per cent. Under the by-laws of the association, the stock would mature when reaching the value of $ 6800, 15% of the premium being deducted from the total amount of the notes, and that at that time the loan against it would be paid and cancelled. The payments required to be made on the stock was the sum of $ 40 each month on dues, and $ 40 on interest. On January 20, 1927, the plaintiff, the Intermountain Building and Loan Association, purchased the property above described from the Millers, subject to the payments still to be made on the stock above mentioned. Before doing so, plaintiff obtained an estimate of the amount then due the defendant, and was told that the loan on the building could be cleared by a payment of $ 1440 in cash, or if paid in installments, by about 17 monthly payments of $ 80 each. The amount deducted from the purchase price was $ 1440.00. Plaintiff chose to make monthly payments instead of paying cash, making 19 monthly payments, or a total of $ 1520. In August, 1928, it asked a release of the mortgage given by the Millers. Defendant then stated that it would require $ 1500.47 more to pay the loan. About nine months later it demanded $ 2500 more. These additional payments were demanded on account of the re-valuation of the property and assets of the defendant, and by reason of the fact that large losses had been sustained. The plaintiff brought this action to compel the release of the mortgage. The defendant set up a cross-petition asking the foreclosure of the mortgages above mentioned. The evidence showed that the stock above mentioned was not, at the time of the trial, worth more than the amount of dues paid in, to-wit, $ 98 per share, a total of $ 3920, and that it might be worth less. The court found against the plaintiff, and in favor of the...