Iowa Business Men's Building & Loan Ass'n v. Berlau

125 Iowa 22 | Iowa | 1904

Sherwin, J.

The defendants pleaded an agreement with the plaintiff, entered into at the time the loan was made and the stock issued, whereby the plaintiff guarantied the maturity of the stock upon the payment of eighty-four monthly installments as provided in the note, and guarantied that the matured value of the five shares of stock at that time would be $500. The defendant Widle pleaded an estoppel, based upon the allegation that before he purchased the premises and assumed the payment of the mortgage thereon, the plaintiff advised him that upon the payment of eighty-four monthly installments, of $8.50, the stock would be fully matured and of the value of $500, and that the surrender of the stock to the plaintiff after such maturity would cancel and pa.y the loan in full. The plaintiff denied that it represented, or guarantied that the stock would mature as alleged.

1. Ultra vires. The plaintiff contends that it did not represent or agree that the stock would mature upon .eighty-four' payments, and that the loan would then be paid in full, and further says that such an agreement, if made, would be ultra vires, and of no force or validity because of the mutual character of building and loan associations. The latter point, however, is not pleaded, and under well-settled rules of pleading we need give it no further con•sideration, and turn our attention to the question whether the representations and agreement were in fact made.

2. maturity ofstock: repayment of loan. It will be seen that the note by its terms was payable in installments. Three dollars dues, being sixty cents per share on each of the five shares of stock issued to Berlau, and ^16 same amount as a premium upon the advance, and $2.50 interest on the amount loaned, were the items making up the monthly installments due by the terms of the note; and of this aggregate sum the $3 payable as monthly dues on the stock was also provided for by the terms of the certificate issued for the stock. It is conceded by the appellant that whenever the dues paid on the stock and its earnings brought its value to par, it would cancel the debt. But does the note itself provide for such continued payments or for such delay in maturing the stock? We think a fair construction thereof, in connection with the stock certificate issued at the time, warrants the conclusion that but eighty-four payments were to be necessary to mature the stock and to pay the debt. The note provides that $8.50 shall be paid on the 30th of “ each and every month until eighty^four full monthly payments have been made, or until the dues paid, together with the earnings accrued on each share of stock, * * * amount to one hundred dollars.” This provision, standing alone, might well be construed to mean that in no event were more than the designated number of monthly payments to be made, and that should the stock sooner mature, they were to cease upon the happening of that event.. This view is strengthened by the conditions of the certificate, which provides that the monthly payments shall be made'for eighty-four full months, and that when so made, no further payment shall be required, and by the stipulation that “ if upon completion of the payment period ” named in the certificate, “ the book value ” of the stock “ does not equal the par value,” the holder may continue the certificate until' its par value is reached, and this without any further payments. These conditions and this privilege, considered in connection with the terms of the note, clearly indicate that the obligation of the note required but 84 monthly payments, of $8.50 each. Furthermore, the plaintiff concedes in its pleadings that it agreed, in consideration of 84 monthly payments, of $3 each, upon the stock, to pay the holder of the stock $500 upon its maturity, according to the provisions ofLsection 5'of article 16 of its by-laws, already set forth herein. This section of the by-laws says nothing about the number of payments, or the time necessary to mature the stock, and only says that it shall be deemed to have matured when -the payments made and profits credited amount to $100. Hence it is not inconsistent with the representations that the stock would mature with 84 payments.

3. Estoppel. It may be conceded that the language of the note is somewhat obscure and ambiguous, but taken as a whole, and in connection with the certificate, we think it susceptible of the construction we have given it. But were .. ' . this not the case, the oral evidence clearly shows that such was the construction placed upon it by the defendants, and by the plaintiff when it was offering inducements for the -defendants to become members of the association, and borrowers of its funds. -The plaintiff was therefore bound thereby, and cannot now maintain the contention that such was not the meaning or intent of the contract Field v. Eastern Bldg. & Loan Ass’n, 117 Iowa, 185. If this conclusion is right, it follows that nothing is due the plaintiff on the note and mortgage in suit, and we need consider none of the other defenses pleaded.

The judgment is affirmed.