Court Opinion

ID: 7108669
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:23:51.29704+00
Date Added: 2024-06-11T16:13:39.687622
License: Public Domain

Geanger, J.
— I. Appellants submit as a basis for argument a question as follows: “Did the sale of the interest of the A. 0. Mount Broom Company in the real estate, by the assignee, also convey the-interest of the A. 0. Broom Company in the Loan & Building Association stock?” Appellants then say: “Our contention is that the stock held by the Grefes, and the bond and mortgage executed by them to the Loan & Building Association, were two separate and distinct contracts, and that they stood in the double relation to the association as stockholders and borrowers.” As the case must turn largely, if not entirely, on what rights passed to Grefe by his purchase of the rights or equities in the laud, it may fie well, to first determine suck rigfite ¶? equities, and sucfi % *350determination will necessarily have to do with the correctness of appellants’ contention. The Broom Company had no rights in the land,, except such as grew out of the contracts by which it sought to become the owner. Because of its irresponsibility, it could not become, directly, the purchaser. Hence the indirect method was adopted of having Grefe and wife take the title, and assume an obligation to convey to the Broom Company on its making certain payments. It was not intended that Grefe and wife should, upon full performance, have any interest in the lots. The carrying out of the contract would put the title to the west forty feet in the Broom Company, and that of the east forty-four feet back to Mount. The taking of the stock was a part of the plan adopted by all as a means of obtaining the loan, and the loan was to be paid, and the incumbrance on the land discharged, by the Broom Company making the payments, to mature their stock; and here we state a fact, as we understand it, that is quite important. It was not the intention, at the outset, to discharge the loan and have the stock remaining, — that is, had the Broom Company continued its payments, as agreed upon till the loan note matured, the debt would have been paid and the stock canceled; the taking of the stock being merely incidental to the loan, in the way of additional security and the manner of making the payments. These payments were, in effect, payments on the land under the agreement with Grefe, and, when fully paid, gave the Broom Company a right to the title. The rights or equities of the Broom Company consisted of the right to complete this contract and take the title, with the incidental right-of possession. This right it sold under the order of the court, and Grefe had the right to go forward and complete the payments, as the Broom Company could have done, and own the land. Now, let us assume that he did so, and see what, under its contract, the Broom Company could claim for its payments made. No one will for a moment doubt that Grefe could, after his purchase under the order of court, *351commence where the company left off, and, by completing the payments, own the land, and the Broom Company would have no claim for its payments; for its equities included the payments, and these were sold. The thought may be clearer if we dismiss for a moment the trivial sum paid, and assume that Grefe paid for the equities the full amount of what the Broom Company had paid. All would then agree that Grefe would not be responsible for anything to the Broom Company. The solution of that difficulty is in this: that Grefe’s rights do not depend on what he paid, but upon what he purchased. There is no claim of fraud or unfair dealings. Being a valid sale, Grefe took the same rights whether the amount paid was much or little, and the Broom Company parted with the same rights. Had Grefe gone forward and matured the stock, by making the payments, and thus paid the debt, the stock would have been canceled, and' the land been his. In doing this, he would have had the advantage of what the Broom Company had paid. Instead of so doing, he paid the mortgage debt, and then continued payments on the stock, taking new certificates, with a view, as we understand, to complete the payments and own the stock. If the loan association would permit this, we do not see how the Broom Company or its creditors can complain; for its assets, or rights, are in no way affected by it. This case is determined largely upon the contract between the Broom Company and Grefe, — in fact, almost entirely so, — because of which many authorities cited are not in point. The association is not a party here, and its obligations to its members are not brought in question. The authorities cited bear upon controversies with such associations and members and others. It may be true that a member of such an association who is a borrower occupies something of a dual relation, as stockholder and borrower. The claim has the support of reason and authority, but that in no way changes the conclusion we reach; for the facts are as we present them, and such a relationship does not in this case interfere with *352the contract with tbe Broom Company, which is controlling. The judgment will stand aeeirmed.