Court Opinion

ID: 3833051
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:03:26.422858+00
Date Added: 2024-06-11T11:36:50.756262
License: Public Domain

Where in the record reference is made to "the payment of dues," it is meant the installment payments on the purchase price of the stock in the association bought by the borrower. The words "fines, penalties, etc.," refer to penalties charged for delinquency in the payment of these installments or interest. The record does not disclose any fines charged to defendants, and the transactions involved are not different in that respect from the affairs of the ordinary building and loan association.
However, the record does not sustain the holding in paragraph 5 of the syllabus, or the holding on page 13 of the majority opinion, to the effect that the purchase of stock under agreement for its payment in monthly dues is a separate contract from the mortgage and loan transaction.
The three Oklahoma decisions cited as authority for the majority view disclose an entirely different situation from that presented in the case at bar. Each of said cases discloses a separate contract signed by the borrower for the purchase of stock. Those contracts are the basis of the holding of separate obligations to pay the contract price for the purchase of the stock and to pay the obligation represented by the note and mortgage. In each of those cases it is possible to carry out the two transactions separately.
But in the case at bar no separate agreements are shown by the record, either as to the $3,800 or the $4,000 loan. Reference to the note executed by the borrowers in each of the transactions presented in the cited cases will disclose that the makers of the note, on the face thereof, agree to pay the monthly dues (installments) on the shares of stock and a separate monthly amount as interest and premium due on said sum borrowed. In the case at bar there is no provision in the note that any part of the monthly payments are to be applied to the principal indebtedness. Moreover, each of the mortgages requires the mortgagor to pay the association on the stock and loan transactions one and the same stipulated amount each month. The amount stipulated is exactly the amount required to pay the monthly installments on the purchase price of the stock and monthly interest falling due on the principal loan.
Bearing in mind that no separate contract of purchase of stock is shown by the record, the transaction is necessarily binding, tied together and inseparable. Thus conclusively the united words employed establish that the stock purchase agreement and the loan agreement are not separate obligations. So it is evident that the transactions involved in the case at bar are entirely different from those in the cases of Hickman v. Oklahoma Savings  Loan Association, 169 Okla. 224,36 P.2d 928; Collings v. El Reno Building  Loan Association,175 Okla. 216, 52 P.2d 57; and Walker et al. v. Local Building  Loan Association, 176 Okla. 168, 54 P.2d 1078, relied upon by the majority.
Another provision in the mortgages presented, not disclosed by the opinions in the other cases, is that the mortgage indebtedness "shall be discharged by the cancellation of said stock at maturity." The words employed unite by no uncertain terms the mortgage indebtedness agreement and the stock purchase *Page 298 
agreement. The provision for liquidation of the loan and the obligation to purchase stock are joined by words and are inseparable. The phrase "shall be discharged" indicates a mandatory contractual provision that the borrower, after full payment of the stock, is required to surrender and cancel same in payment of the mortgage indebtedness. Thus the case at bar is squarely within the rule of law in Security Thrift Syndicate v. Tidwell et al., 190 Okla. 377, 123 P.2d 955. Since the borrower has no option but must surrender and cancel the stock in satisfaction of the mortgage indebtedness, then under the Tidwell Case, supra, the stock purchase contract and the mortgage loan contract constitute one transaction. So the words of the one instrument show an agreement to charge and collect usury provided only that the rate of interest is more than that allowed by law. By law the contract rate of interest is 10%. That amount was charged on the loan. Then, by joinder of an agreement to purchase stock and cancel it in liquidation of the loan, usury was surely charged. Benefit for the loan or deference of money is limited to 10%. No additional benefit can lawfully be conferred upon the lender. Presumptively, the sale of stock was beneficial to the lender. Its joinder in one instrument was usurious.
Then there is the matter of assignment of rents. The contract made no provision whatever for applying the rents collected to the purchase price of the stock, and the mortgagee had no authority to so apply the rents. It may be, however, that the mortgagor gave consent to so apply the rents collected. No doubt the mortgagors received full credit for the rents in the reduction of the mortgage indebtedness. But here we are presented with a contractual provision for maturity of certain shares of stock, the subsequent cancellation of the same, and application of the proceeds to the reduction of the mortgage indebtedness, and this provision is an integral part of a contractual agreement executed whereby the limit of interest was charged on a loan of money. The whole is too much as limited by law.
In view of the provisions in the notes and mortgages mentioned, and the fact that the record does not show a separate contract for the purchase of stock, I am convinced that there were no separate agreements sufficient to support the view of the majority.
Moreover, as shown by this record, a variance is presented not shown in the ordinary building and loan transaction. The borrowers here were required to purchase more stock in the association than the amount of the respective loans. In the first loan (the $3,800 loan), the borrowers were required to purchase 50 shares, or $5,000 in stock, in the association. That amount of stock, if carried to maturity, would have been $1,200 more than enough to retire the mortgage indebtedness. In the $4,000 loan the same amount of stock was supposed to have been purchased, which at maturity would have been $1,000 more than enough to retire the mortgage indebtedness. In view of the contractual provision for cancellation of the stock when matured, contractual requirements were not only usurious — they were unconscionable.
For these reasons, I respectfully dissent.