Iowa Business Men's Building & Loan Ass'n v. Fitch
| Decision Date | 10 April 1909 |
| Parties | IOWA BUSINESS MEN'S BUILDING & LOAN ASSOCIATION v. SARAH E. FITCH, Appellant |
| Court | Iowa Supreme Court |
Appeal from Story District Court.--HON. R. M. WRIGHT, Judge.
SUIT to foreclose mortgage resulted in decree as prayed. The defendant appeals--Modified and affirmed.
Modified and affirmed.
J. M St. John, E. H. Addison and B. B. Welty, for appellant.
J. L Carney, for appellee.
The plaintiff is a building and loan association organized in 1891, and on February 13, 1897, loaned the defendant $ 500. She gave her promissory note, and as security executed a mortgage and assigned five shares of stock which she then received in the association. The note recited that it was given as an advance payment for the stock and her agreement to pay $ 8.50 monthly on said stock, $ 3 as dues, $ 3 as premium, and $ 2.50 as interest, the first payment on date thereof and thereafter "on the 1st day of each and every month, until the dues paid, together with the earnings accruing on each share of the stock of said association held by said Sarah E. Fitch and assigned to said association as collateral security for the payment of this note, amount to one hundred dollars." On this stock defendant had paid eighty-three payments, besides three payments of dues in advance, and she claims to have made three premium and interest payments in advance, though these do not appear on her passbook. The answer pleaded: (1) Usury; (2) payment, and that the stock had matured; and (3) that defendant was induced to borrow the money and become a member of the association by its representation and guaranty that "said five shares of stock would mature and pay off said loan in 84 months," and that plaintiff was "precluded from claiming that said stock had not matured when defendant ceased making further payments."
Taking these defenses up in the reverse order, we have to say that the evidence warranted the conclusion that the agents of the association orally represented to defendant that eighty-four payments would mature the stock, but there was no allegation that the statements were knowingly false or made to deceive. The contention seems to be that the association should be estopped thereby from contending otherwise. We do not think so. Whatever may have been the representations, she agreed by the terms of the note that payments were to be made until the dues and earnings on each share of the stock amounted to $ 100. Moreover, the certificate of stock which she received and assigned as security recited that, when the payments and profits credited amounted to $ 100, the stock was mature, and that "when payments of ninety full months have been duly paid to said association the board of directors shall pay to the legal holder of this certificate its full book value if demanded." The articles of the association provided that "this class of stock may be settled for at book value after ninety payments have been duly made." So these several instruments advised her that more than eighty-four payments were contemplated, and, as they embodied the undertakings of the association as well as herself in writing or print, must be regarded, in the absence of any charge of fraud, as evidencing the agreements between them as finally consummated. What may have been said in the preliminary negotiations was merged in the written agreements, and evidence thereof to vary the latter was not admissible. Congower v. Ass'n, 94 Iowa 499, 63 N.W. 192; Phillipy v. Homesteaders, 140 Iowa 562, 118 N.W. 880; McEnery v. McEnery, 110 Iowa 718, 80 N.W. 1071.
As contended, there was no evidence as to whether defendant knew the contents of the several instruments; but no reason to the contrary being shown, she is conclusively presumed to have known the provisions of the note, at least, when she executed it. Chapman v. Chapman, 132 Iowa 5, 109 N.W. 300; Bonnot Co. v. Newman, 109 Iowa 580, 80 N.W. 655. And as she received the certificate of stock and became a member of the association, mutual in character, it is to be inferred that she was aware of the provisions of the certificate and of the articles of incorporation. This being so, it is manifest that the association was not estopped from insisting upon the terms of the contract as reduced to writing.
II. To sustain the charge of usury, appellant argues that plaintiff is not a building and loan association, and hence was not authorized to exact interest at a higher rate than eight percent per annum. It is enough to say that plaintiff expressly avers that it "is a corporation organized under the laws of Iowa for the purpose of carrying on the building and loan association business in accordance with said laws." This was not put in issue by the assertion of facts relied on to show otherwise, as required in section 3628 of the Code, or in any other manner, and the allegation of usury alone did not put in issue the plaintiff's corporate capacity. Moreover, the point was not made in the district court, and appellant is precluded from trying her case on a theory urged in this court for the first time. Assuming the validity of the incorporation, the contract was not usurious. Iowa Deposit & Loan Co. v. Matthews, 126 Iowa 743, 102 N.W. 817; Bacon v. Savings & Loan Ass'n, 121 Iowa 449, 96 N.W. 977; Edworthy v. Ass'n, 114 Iowa 220, 86 N.W. 315.
III. The defendant, up to and including January 1, 1904, had paid eighty-six payments of dues, or $ 258. As the Twenty-Eighth General Assembly prohibited any building and loan association from charging interest in excess of 8 percent per annum, and plaintiff continued making loans, it concluded to reduce the rate of interest on outstanding loans to 8 percent, and accordingly the reduction in interest and premium as computed by the association amounted to $ 94.60. The net dividends credited were $ 54.25, making a total of $ 406.85 as the book value of the stock January 1, 1904. This deducted from the face value of the stock left a balance of $ 93.15. No payments...
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