Title: Cantrell v. City Federal Sav. & Loan Ass'n

State: alabama

Issuer: Alabama Supreme Court

Document:

496 So. 2d 746 (1986)
William C. CANTRELL and Marydean Cantrell
v.
CITY FEDERAL SAVINGS AND LOAN ASSOCIATION.
85-198.

Supreme Court of Alabama.
October 3, 1986.
*747 Salem N. Resha, Jr., Birmingham, for appellants.
James L. Clark and Lynn Baxley Ault of Lange, Simpson, Robinson & Sommerville, Birmingham, for appellee.
PER CURIAM.
Plaintiffs, William C. Cantrell and his wife Marydean Cantrell, appeal from the summary judgment entered against them and in favor of defendant, City Federal Savings and Loan Association. We affirm.
In April 1978, the Cantrells purchased a building for $455,000.00 and financed this purchase through City Federal, giving City Federal a first mortgage on the property. *748 The mortgage given to City Federal had an interest rate of 10½%. In January 1979, the Cantrells decided to sell the building, and signed an exclusive authorization to sell in favor of W.H. Mullins & Associates, Inc., a land investment firm. This agreement specified that the Cantrells would be willing to take a "wraparound" second mortgage for any balance due them from the purchaser. William Mullins, of the investment firm, represented the Cantrells in a meeting with Jesse Miller, chairman of the board and president of City Federal, to see if a wraparound mortgage would be acceptable to City Federal. According to the affidavits of William Cantrell and Mullins, Miller told Mullins that a wraparound mortgage would "be no problem."
On March 28, 1979, the Cantrells signed a real estate contract to sell the property to Floyd and Betty Norris for $825,000.00. The contract also included a statement that the sellers would hold a wraparound mortgage at 10½% for 22 years. Shortly thereafter, Mullins was informed by City Federal that the interest rate on the first mortgage would be raised to 11½% as a result of the contemplated transfer to the Norrises. Subsequently, William Cantrell and W.H. Mullins met with Jesse Miller at City Federal, and at this time Miller confirmed City Federal's intention to raise the interest rate. This was reiterated in a letter sent on May 22 from Norman Pless of City Federal to the Norrises, which informed the Norrises that their credit had been approved and showed an interest rate increase from 10½% to 11½%, and indicated that a transfer fee of $250.00 would be charged. A copy of this letter was mailed to the Cantrells.
On June 11, William Cantrell sent a letter to City Federal in which he again stated that he was interested in a wraparound mortgage arrangement with the Norrises, and asked City Federal to outline its requirements for such an arrangement. In response, City Federal again set forth the terms as described in the May 22 letter sent to the Norrisesthat the interest rate would be 11½% and a $250.00 transfer fee would be charged.
Although they had been orally reassured by the Cantrells on several occasions that the interest rate on the first mortgage would remain at 10½%, the Norrises requested written confirmation of this from City Federal, because, according to their attorney, use of a wraparound mortgage necessarily would "spark the escalation of a conventional mortgage."
After failing to receive the requested confirmation, the Norrises abandoned the sales contract. The Cantrells were then sued by Champion Realty Company (the realty company employed by the Norrises) for one-half the commission from the aborted sale, and the jury returned a verdict against the Cantrells for $20,625.00. The Cantrells also claim that they had to pay $30,000.00 to the Norrises so that the Cantrells could remove the Norrises' claim to the property.
The Cantrells filed suit against City Federal, alleging that it had agreed not to escalate the interest rate on the first mortgage and then had breached that agreement, and that as a result they were damaged. City Federal filed a motion for summary judgment, which the court granted, and this appeal followed.
The following excerpts from William Cantrell's deposition set forth his testimony concerning his agreement with City Federal:
The trial court also had before it affidavits of William Cantrell and Mullins. The pertinent portion of Mullins's affidavit reads:
Regarding Mullins's statement about what was contemplated in the listing agreement, the only reference that document made to the first mortgage was:
There is no reference whatsoever in the listing agreement to the original interest rate of 10½%it merely states that a wraparound mortgage would be used to secure the balance of the debt. As the trial court stated in its order granting summary judgment:
After a thorough review of the record, we are of the opinion that the trial court's findings in this regard are correct. The Cantrells have not offered even a scintilla of evidence that City Federal, by and through its president Jesse Miller, promised to keep the interest at 10½%. It is clear from the depositions and affidavits introduced that William Cantrell and Mullins believed that, when Miller said a wraparound mortgage would be "no problem," this meant that the interest rate would *751 remain at 10½% on the first mortgage. Neither Cantrell nor Mullins ever stated that anyone from City Federal told them specifically that the interest rate would be 10½%; rather, the only figure ever mentioned when the parties to the suit discussed the interest rate was 11½%. Because there was no agreement with respect to the interest rate on the first mortgage, there was no enforceable contract. City of Montgomery v. Maull, 344 So. 2d 492 (Ala. 1977).
It is well settled in Alabama that a summary judgment will not be granted unless there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Rule 56(c), A.R.Civ.P.; Henderson v. Winkler, 454 So. 2d 1358 (Ala.1984). In this case, the Cantrells have failed to offer even a scintilla of evidence in support of their claim that City Federal promised not to raise the interest rate on the first mortgage if the Cantrells took a wraparound second mortgage, and, therefore, in this respect, the trial court's summary judgment was appropriate.
The Cantrells' second contention is that there were facts introduced which support their claim for relief based on the theory of promissory estoppel, as that theory is set out in Restatement (Second) of Contracts § 90(1) (1979). That section provides:
The Cantrells assert that Jesse Miller made a promise to them that he should have known would cause them to act and which did cause them to act to their detriment. The so-called "promise" that Miller is alleged to have made was that a wraparound mortgage would be no problem. First, this does not appear to us to be a promise on City Federal's part to do or refrain from doing anything. Even viewing the facts in a light most favorable to the Cantrells, we are of the opinion that, even if this language could be construed as a promise to allow a wraparound mortgage, there is not one shred of evidence that he promised to keep the interest rate for the first mortgage at 10½%. To the contrary, all statements made by City Federal concerning the interest rate of the proposed wraparound mortgage were to the effect that the interest rate would be 11½%. Without a promise on City Federal's part upon which the Cantrells could have relied, they cannot recover based on a promissory estoppel theory.
For all of the above-stated reasons, the judgment of the trial court is due to be, and it hereby is, affirmed.
AFFIRMED.
TORBERT, C.J., and JONES, SHORES, ADAMS and STEAGALL, JJ., concur.