Court Opinion

ID: 9673746
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:17:31.559355+00
Date Added: 2024-06-11T18:16:23.834680
License: Public Domain

Robert W. Hansen, J.
(concurring in part; dissenting in part). The interest escalation section of the savings and loan chapter of the Wisconsin statutes provides as follows:
“The mortgage or mortgage note may provide that the interest rate may be increased after 3 years from the date thereof, by giving to the borrower at least 4 months’ notice of such intention. The borrower may, after receipt of such notice, repay his loan within the time specified in such notice without the payment of any penalty.”1
*186Three Justices of this court (Mr. Justice Leo B. Hanley, Mr. Justice Connor T. Hansen and Mr. Justice Roland B. Day) write that this statute authorizes, subject to the time limits set forth in the section, multiple increases in the rate of interest by a savings and loan association. The writer agrees that it does.
Three Justices of this court (Mr. Chief Justice Horace W. Wilkie, Mr. Justice Bruce F. Beilfuss and Mr. Justice Nathan S. Heffernan) write that this statute grants a power to a savings and loan association which must be contractually exercised to be effective. The writer agrees that the increased interest clause may be included or omitted by the provisions of the mortgage and note as bargained for by the parties.
The interest escalation clause in the mortgage agreement between the parties in the case before us reads as follows:
“The rate of interest stipulated herein may be increased at the option of the Association; provided, however, that the Association may not exercise such right in less than three years from the date of the loan, and then only upon at least four months’ written notice to the borrower; and provided that in the event of such an increase in the stipulated rate of interest the borrower may prepay the loan within such notice period without penalty.”
As to time limits and conditions for exercise of the statutory option to escalate interest, the provisions of this clause in the mortgage contract are identical with the language of the statute.
Three Justices of this court (Wilkie, C. J., BEILFUSS and Heffernan, JJ.) find this clause in this mortgage to be ambiguous and resolve the ambiguity by holding this savings and loan association was here entitled to only one escalation of interest. The writer disagrees. If this mortgage clause is ambiguous, so is the statute. *187Having agreed with three Justices (Hanley, Connor T. Hansen and Day, JJ.) that this statute authorizes more than one escalation of interest rate by a savings and loan association, the writer would hold that this clause in this mortgage likewise authorized more than a single increase in interest rate by this savings and loan association. With the same language used in both, the same construction is to be given to both.
However, under both the statute and the clause in the mortgage, the sole and limited right given to the savings and loan association to alter the agreement of the parties was to increase the interest rate. No other provisions in the mortgage agreement could be altered. In the case before us, in its first upward adjustment of interest rate and monthly payments for principal and interest, as set forth in its notice of June 28, 1968, the savings and loan association went beyond its limited authority under the statute and under the provisions of the mortgage agreement. That notice provided, in material part:
“As of November 1, 1968, the interest rate on your loan will be increased 2% per annum. Your payments for principal and interest will be adjusted to $917.00 per month thereby increasing your total monthly payment to $1243.50.
“We trust that you will understand the need for these changes.”
Two changes were thus made in the mortgage agreement. The first was the increase of two percent per annum in the interest rate. The second was the increase in monthly payments. A single payment in the stipulated amount was to be paid by the borrower each month. From such fixed and determined monthly payment, it is clear that the savings and loan was to subtract one-twelfth of the annual interest due, applying the balance to reduction of the principal owed.
*188Such subtraction of interest due and application of the balance of the monthly payment to the principal owed is a clear and unambiguous provision in the contract of the parties. No question of construction arises as to its unmistakable meaning. In fact, the mortgage agreement further provides that, in case of the mortgagor’s failure to pay taxes, make repairs, procure insurance or discharge liens, the savings and loan association may make the payments for such purposes “. . . and all sums so paid shall be added to the unpaid balance of the aforesaid note. . . .” In such event, as to all sums so paid and thus added, they “. . . become a part of the mortgage indebtedness, with interest thereon at seven and two-tenths per centum (7.2%) per annum. . . .” In the event such situation arises, there is no provision for any increase in the amount of the monthly payments to be made. The payments made are to be added to the principal due, and interest on such payments for taxes, repairs, insurance or liens is to be taken out of the monthly payment, with the balance of the monthly payment, after taking out the interest on the loan at five and one-half percent and interest at seven and two-tenths percent on such subsequent amounts paid out by the savings and loan association, to be applied to reduction of the principal owed. The amount paid by the borrower each month does not go up. The percentage of such monthly payment applied on the principal goes down.
When the savings and loan association here, in its 1968 notice, increased the amount of the monthly payments as well as increasing the interest rate, it did two things, not one. As to the interest escalation, it was exercising its option under the agreement and pursuant to the statute. As to the increase in the monthly payments due under the contract, it was proposing a new mortgage contract. Under the original agreement, *189the escalated interest payments would have come out of the stipulated monthly payments, leaving a smaller balance to be applied on the principal. Under the proposed agreement, there was to be an increase in monthly payments as well as an increase in interest rate. Such option to increase such monthly payments was not reserved to the association under this mortgage contract. Such additional change in the contract is not provided for in the interest escalation statute. By accepting such proposal and making the higher monthly payments required by the 1968 notice, the borrower accepted the proposed new and altered mortgage contract.2 With both parties accepting and performing under the new mortgage agreement, there is a change in status of the so-called “second” interest escalation, as demanded by the savings and loan association, in its notice of May 28, 1970, effective October 1, 1970. It becomes a first interest escalation under the new or modified mortgage agreement which became effective on November 1, 1968. As such, it falls within the prohibition of the mortgage agreement of the parties, left unchanged in the second or successor agreement, that the association “. . . may not exercise such right [of interest rate increase] in less than 3 years from the date of the loan. . . .” It also falls outside of the statute, sec. 215.21 (3) (b), which authorizes a first interest rate increase only “. . . after three years from the date thereof. . . .” In the case before us, there became effective on November 1, 1968, *190a new mortgage contract between these parties, made so not by the increase in interest rate but by the substantial change as to monthly payments to be made. No interest rate escalation could be effected as to such new mortgage agreement until three years from the effective date of the new agreement.
Therefore the writer would hold invalid the attempted escalation of interest rate, contained in the notice given by this savings and loan association on May 28, 1970. The writer would uphold the position of the appellant savings and loan association that both the statute and the agreements of the parties here permit multiple escalations of interest. But the writer would hold the so-called “second” escalation, to have become effective on October 1,1970, as a first escalation under the new agreement of the parties, effective November 1, 1968. As such, it is, under the agreement and under the statute, invalid as having been attempted within three years of the date on which the new agreement became effective. The respondent borrower here is not required to pay the increase in interest rate demanded by the savings and loan in its notice of May 28, 1970. Thus the writer would affirm the judgment of the trial court so holding, but not on the grounds stated by the trial court and relied upon by respondent. Of such taking a different road but reaching the same destination, our court has said: “Where we find an order to be correct, we may affirm it notwithstanding that counsel supported it on an erroneous theory, or even disclaimed the view of the law which we hold to be right.”3
Since an appellate court is concerned with whether the result reached in the trial court is correct, not with *191whether the trial court’s reasoning is,4 the writer joins three Justices (Wilkie, C. J., Beilfuss and Heffernan, JJ.) in affirming the judgment of the trial court.

 Sec. 215.21 (3) (b), Stats.

 Such an agreement would be taken out of the statute of frauds by part performance. See: secs. 240.06 and 240.09, Stats. 1967. See also: Bunbury v. Krauss (1969), 41 Wis. 2d 522, 534, 164 N. W. 2d 473, stating: “As stated above, sec. 240.09, Stats., makes the statute of frauds inapplicable if there has been a part performance of the contract. In order to make the doctrine applicable, the acts of part performance must be those which the oral agreement requires and must be for the purpose of carrying out such agreement.”

 Laffey v. Milwaukee (1958), 4 Wis. 2d 111, 115, 89 N. W. 2d 801.

 Liberty Trucking Co. v. ILHB Department (1973), 57 Wis. 2d. 331, 342, 204 N. W. 2d 457, this court holding: “If the holding is correct, it should be sustained and this court may do so on a theory or on reasoning not presented to the lower court.”