Washington National Building & Loan Ass'n v. Fiske ( 1902 )

Mr. Justice Morris

delivered tbe opinion of tbe Court:

1. Tbe principal, indeed tbe only question in this case is as to tbe proper rule for stating the account between tbe parties. Confessedly tbe auditor has stated it in accordance with tbe rule laid down by this court in tbe case of The Middle States Loan, Building and Construction Company v. Baker, 19 App. D. C. 1; and it is conceded on behalf of tbe appellant tbat this case falls within tbe principle of tbat one, unless, as it is claimed, it can be differentiated therefrom by what is here assumed to be tbe fact tbat,tbe payments to be made in tbe present case are made to depend upon a contingency, and not upon tbe happening of a certain event, and tbat therefore, according to tbe rule stated by tbe Supreme Court of tbe United States in tbe cases of Spain v. Hamilton, 1 Wall. 604, and Bedford v. Eastern Building and Loan Association, 181 U. S. 227, tbe contract between tbe parties was not of a usurious character, such as to entitle tbe appellees to have the payments designated as monthly premiums charged as payments by the appellees on the loan. But we fail to find any -substantial difference in principle between the two cases. The features that enter into the accounting are the same in both; and it would, therefore, serve no useful purpose to review the question at any length here.

The attempt of counsel for the appellant association is not so much to distinguish this from the Baker case as to show that the decision in the Baker case was antagonistic to the opinion of the Supreme Court of the United States in the case of Bedford v. Eastern Building and Loan Association, 181 U. S. 227. We find no such antagonism. The facts of that case were very different from this. They are not fully stated in the report of the case; but sufficient appears to show that the subscribers to the stock of the association remained actual stockholders until the end, unless they elected in the meantime to withdraw their stock; that the mortgage contract was a separate and distinct thing, wherein notes were given for the indebtedness to be paid as they matured; and that the pledge of the stock, which accompanied the mortgage, was merely as collateral security, and not in effect a transfer of it to the company, with which, as we said in the case of Armstrong v. Building and Loan Association, 15 App. D. C. 1, it served merely as a measure of the payments to be made. The stockholder did not cease to be a stockholder by becoming a debtor to the association. It was stipulated that the contract should be performed in the State of New York, under the laws of which the association had been incorporated, where it actually had its principal office, and by the laws of which the contract was valid. In a suit by the association for foreclosure of the mortgage, which was on property in the State of Tennessee) where the mortgagor resided, certain legislation of this latter State, subsequent to the time of the execution of the contract, and with which the association had not fully complied, was relied on to defeat the demand of the association. The principal question in the case was that of the validity of this legislation as affecting the contract between the parties. It was held that it did not affect it; and that, as to the claim of usury, which was also advanced by the defendant, the contract being good in the State of New York, where it was to be performed, should be held good also in Tennessee, and that the assignment of the stock in connection with the mortgage was not in effect an absolute assignment of it, but in reality as collateral security, leaving the mortgagor still a stockholder in good faith and to all legal intents and purposes. This seems to us to make a very different case from that of The Middle States, etc., Company v. Baker, 19 App. D. C. 1, and from that now before us, and to leave our ruling in the Baker case unaffected. We find no reason to change that ruling.

2. It seems to have been thought by counsel that the adoption of the new_ code of law of the District, whereby the incorporation in this jurisdiction was authorized of building associations, with a system of dues, premiums and interest taken out of the operation of the statutes of usury (code, Sec. 692), had some retroactive effect on the rights of the parties to this cause. But we cannot regard this proposition as one that need be seriously considered. The section relied on, even if applicable at all, is not retroactive, either in its letter or its spirit; and even if it had been distinctively so, it is too well settled to need elaboration from us, that such legislation could not be construed to disturb vested rights. The right of the appellees to be released from the obligation of their mortgage became vested and complete when they made their tender on May 5, 1901; and mo- subsequent legislation could in any manner validly impair that right. The question is not, as seems to be claimed by counsel for the appellant, whether the appellees had a vested right in the continuation of the usury laws, as they then existed, which no one claims; but whether, on May 5, 1901, when they made their tender, or on June 14, 1901, when they filed their bill of complaint, they had a vested right to redeem their property from the mortgage upon it. About this we entertain no doubt whatever.

It is our opinion that the auditor stated the account in this case correctly, and that the decree of the Supreme Court of the District of Columbia in the premises was right and just and should be affirmed, with costs. And it is so ordered.