185 P. 646 | Ariz. | 1919
This suit grows out of what is known as a building and loan contract. Negotiations begun on February 16, 1909, culminated on February 28th, in appellant George E. Shute becoming a member of the appellee association and a subscriber to 120 shares of its stock, par value $100 per share, upon which he agreed to pay $48 per month for 130 monthg, “or until the stock subscribed shall have become fully paid up and matured.” At the same time he applied for a loan of $6,000, offering as security his 120 shares of stock, and a business lot situate in the city of Globe, Arizona. The note and trust deed that appellant George E. Shute and his wife, Ella Shute, signed was dated February 23‘, 1909, but as a matter of fact was not executed and delivered to appellee until March 20, 1909. The note is in words and figures as follows:
“$6,000. Globe, Arizona, February 23, 1909.
“Ten years after date, for value received, I promise to pay to the Fidelity Savings & Loan Association, a corporation, or order, at its office, at Los Angeles, state of California, the sum of six thousand dollars, with interest from date until paid, at six per cent per annum, payable monthly in advance; also the further sum of thirty-six dollars per month, as premium or preference to obtain this loan, said premium payable monthly in advance.
“GEOEGE E. SHUTE.
“ELLA SHUTE.”
The trustee in the trust deed is the appellee Title Guaranty & Trust Company, and is not otherwise interested than as naked trustee. The property conveyed in trust was the 120 shares of stock and city lot. The trust deed recites, among other things, that it is given “for the purpose of securing the payment - of said promissory note . . . with interest and pre
Date 6/7/1915.
George E. Shute and Ella Shute to Fidelity Savings & Loan Association, Dr.
Charges.
Principal ................................$6,000 00
Payments Jan. 1909, to June, 1915, as per agreement ............................. 2,052 00
Fines ...... 155 00
$8,207 60
Credits.
Withdrawal value of certificate No. 3027... $4,588 30 To balance ............................. 3,619 30
$8,207 60
Appellants in their answer allege that the interest at six per centum per annum had been paid on note until January, 1915, and that $2,088 had been paid up to that time in premiums, and claim that the premium payments should be applied on the principal of note. Otherwise the two items of interest and
Before taking up the assignments of error, we think it is apparent that appellee is claiming, as shown by its statement of account, more than it is entitled to recover. It is unquestioned that appellants had paid interest, premiums, and dues on stock up to and including December, 1914. At that time, then, they owed, accepting appellee’s claim of credits, the principal of $6,000 and future interest and premiums and dues until the maturity of the stock. However', in June, 1915, six months from December, 1914, appellee, because of defaults in payments, exercised its option and declared the whole indebtedness due and payable. The payments in default at that time were $36 interest, $36 premium, and $48 dues, per month for six months, January to June, inclusive, or $720. Appellee’s statement charges this item as $2,052, or an excess of $1,332. This error of calculation was carried through into the judgment. At all events, therefore, the judgment should be reduced by deducting therefrom the overcharge of $1,332.
Appellants, by their assignments of error, raise two points. The first is directed at the character of the evidence introduced to show the state of the account. The secretary of appellee, testifying by deposition, stated that the account, as contained in complaint, was “figured by one of the employees of plaintiff and approved ‘by deponent, and such amount was due plaintiff. . . . The remainder of the $6,000 loan, plus the payments unpaid to June, 1915, inclusive of fines, as already stated, less the withdrawal value of certificate No. 3072, leaves $3,619.30
The next and only other error assigned is that the debt is usurious. It is contended that the premiums should be figured as interest, and that when that is done the interest charged exceeds the legal rate of 12 per cent per annum as fixed by chapter 84, Laws of 1909, effective March 18,1909. But the note and trust deed, and all payments thereon, were made payable at Los Angeles, California. That being the agreement, the usury laws of California would control, unless it appear that a studied effort to evade the effect of our usury law was intended. Bedford v. Eastern Bldg. & Loan Assn., 181 U. S. 227, 45 L. Ed. 834, 21 Sup. Ct. Rep. 597 (see also, Rose’s U. S. Notes); United States Sav. & Loan Co. v. Beckly, 137 Ala. 119, 97 Am. St. Rep. 19, 62 L. R. A. 33, and note, 33 South. 934. There is nothing in the record to indicate that the usury laws of Arizona were taken
The courts have come to different conclusions as to how these building and loan contracts should be construed. By some they are treated as straight loans, and all payments, whether interest, premiums or dues, are credited upon the original amount bor
Building and loan contracts as construed by the courts are discussed in an extensive and learned note to Groover v. Pacific Coast Sav. Co. et al., 164 Cal. 67, Ann. Cas. 1914B, 1261, 43 L. R. A. (N. S.) 874, 127 Pac. 495.
The cause is remanded, with directions to the trial court to modify the judgment by allowing a credit thereon of $1,332. The appellants will recover the costs of this court, and the appellee the costs of the trial court.
CUNNING-HAM, C. J., and BAKER, J., concur.