Washington National Building & Loan Ass'n v. Pifer, 31 App. D.C. 434

31 App. D.C. 434 | D.C. Cir. | 1908

Mr. Justice Robb

delivered the opinion of the Court:

Two questions are presented by the assignments of error: .(1) That the contract should be construed according to the laws of Virginia; and (2) that it should be construed according to the laws of West Virginia.

1. It is obvious that this Building & Loan Association obtained a charter in Virginia, not with any idea of locating in that State, but with the definite and distinct idea and intention of locating in the District of Columbia; hence its name the “Washington National Building & Loan Association of Washington, D. C.” As above stated, its principal office has always been located here, its books have been kept here, its officers have lived here, and its business has been transacted here. Its charter merely gave it corporate existence, and, when it came here and located, it became eo instante subject to our laws. By the laws of comity we recognize its charter, but in so doing we do not abrogate our own laws in favor of the laws of the State creating it. The authority of one jurisdiction over a corporation of another jurisdiction is co-extensive with its authority over a corporation of its own creation. In the present case neither of the parties to the contract was domiciled in Virginia, nor was the contract to be performed there. Under the law of the District of Columbia, the contract was usurious, and must have been known to be so when made. It is manifest, therefore, that the attempt on the part of the association to stipulate against the laws of its domicil must be held to be futile and against the public policy of this jurisdiction; National Mut. Bldg. & L. Asso. v. Brahan, 193 U. S. 635, 48 L. ed. 823, 24 Sup. Ct. Rep. 532; New York L. Ins. Co. v. Cravens, 118 U. S. 389, 44 L. ed. 1116, 20 Sup. Ct. Rep. 962; American Freehold Land & Mortg. Co. v. Jefferson, 69 Miss. 778, 30 Am. St. Rep. 587, 12 So. 464.

2. A .contract, generally speaking, is governed by the law with reference to which it is made, and, as was said in Croissant v. Empire State Realty Co. 29 App. D. C. 547, “the place provided for payment is therefore sometimes of contjjplling importance when the question in controversy relates to the rate of interest, which may be legal in one jurisdiction and usurious in the other.” In that case it was ruled that the contract should be governed by the law of the District of Columbia because “made and apparently intended to be performed therein.” In the present case it clearly appears that the contract was to be performed in the District of Columbia, the place of the domicil of the party making the loan. Under the stipulation in the bond, that the contract should be controlled by the laws of Virginia, it is apparent that the contract was not made with reference to the laws of the State of West Virginia, the domicil of the borrower. The parties, therefore, must be regarded as having contracted with reference to the laws of the District of Columbia, for “with regard to the question what law is to decide Whether a contract is, or is not, usurious, the general rule is the law of the place where the money is made payable.” Junction R. Co. v. Bank of Ashland, 12 Wall. 226, 20 L. ed. 385. In building and loan association contracts the rule appears to be well settled that, in the absence of a stipulation to the contrary, they are to be governed by the law of the place of performance. In Bedford v. Eastern Bldg. & L. Asso. 181 U. S. 243, 45 L. ed. 845, 21 Sup. Ct. Rep. 597, the court refers with approval to the case of Pioneer Sav. & L. Co. v. Cannon, 96 Tenn. 599, 33 L.R.A. 112, 54 Am. St. Rep. 858, 36 S. W. 386, where a note secured by mortgagq was given by a citizen of Tennessee to a building association and made payable at Minneapolis, Minnesota. It was held that the contract was a Minnesota contract and governed by the laws of that State.

A number of cases involving the same question here in issue have been passed upon by Federal courts in different jurisdiclions, and with great uniformity it has been held that the law of the State of the domicil of the association, and where the contract was to be performed, should govern its construction. Building & L. Asso. v. Logan, 14 C. C. A. 133, 30 U. S. App. 163, 66 Fed. 827; Vermont Loan & T. Co. v. Dygert, 89 Fed. 123; Dygert v. Vermont Loan & T. Co. 37 C. C. A. 389, 94 Fed. 913; Guarantee Sav. L. & Invest. Co. v. Alexander, 96 Fed. 870; Hamilton v. Fowler, 40 C. C. A. 47, 99 Fed. 18; Hieronymus v. New York Nat. Bldg. & L. Asso. 101 Fed. 12; MacMurray v. Gosney, 106 Fed. 11; Mcllwaine v. Ellington, 55 L.R.A. 933, 49 C. C. A. 446, 111 Fed. 578; United States Sav. & L. Co. v. Harris, 113 Fed. 27; Interstate Bldg. & L. Asso. v. Edgefield Hotel Co. 120 Fed. 422; Alexander v. Southern Home Bldg. & L. Asso. 120 Fed. 963; Pacific States Sav. Loan & Bldg. Co. v. Green, 59 C. C. A. 167, 123 Fed. 43; Lewis v. Clark, 64 C. C. A. 138, 129 Fed. 570.

In the case at bar we are not disposed to indulge in any presumption in favor of the association owing to its attempt to avoid the laws of this jurisdiction. Originally it was within its power to have contracted with reference to either the law of this District, or the law of West Virginia. Failing to do either in terms, the contract must be controlled according to the general rule. The association was located here, and here the contract was to be performed. That the security for the loan consisted of real estate in West Virginia does not affect the question. De Wolf v. Johnson, 10 Wheat. 367, 6 L. ed. 343.

We hold, therefore, that the contract must be controlled by the law of the District of Columbia. It follows that the decree must be sustained, with costs, and it is so ordered.

Affirmed.