MIDLAND S&L CO. v. FOSS IMPROVEMENT CO.

MIDLAND S&L CO. v. FOSS IMPROVEMENT CO.
1912 OK 588
126 P. 720
34 Okla. 564
Case Number: 1986
Decided: 09/12/1912
Supreme Court of Oklahoma

MIDLAND SAVINGS & LOAN CO.
v.
FOSS IMPROVEMENT CO.

Syllabus

¶0 BANKS AND BANKING--Loan Company--Fees and Commissions--Recovery by Applicant. The Toss Improvement Company made written application to the Midland Savings & Loan Company for a loan on real estate, and also to become a stockholder in the latter company. The application showed on its face that the Foss Improvement Company was a corporation. The Midland Savings & Loan Company exacted an advance payment of an attorney's fee and a sum equaling one per cent. of the loan applied for as a prerequisite to its receiving or considering said application, but promised to refund the same if the loan was not made through its fault. After receiving and considering the application, the Midland Savings & Loan Company refused to make the loan, on the ground that the Toss Improvement Company, being a corporation, was ineligible to membership, and could not hold stock in the Midland Savings & Loan Company, and offered; as a counter proposition, to make the loan, provided the Foss Improvement Company would transfer its real estate to an individual, who would be qualified to hold stock and become a member of the Midland Savings & Loan Company. This the Toss Improvement Company declined to do, and demanded the return of the fee and commission. Held, that the Midland Savings & Loan Company was bound to return the fee and commission; and that it would not be permitted to solicit business among those who were ineligible to membership, and then refuse to comply with the terms of its contract on the ground of the ineligibility of the applicant.

A. J. Bryant and Burnett & Beets, for plaintiff in error.
Massingale & Duff, for defendant in error.

ROBERTSON, C.

¶1 The judgment of the lower court should be affirmed. The Foss Improvement Company, after making written application for the loan, complied with every requirement of its said application. The defendant, after accepting the application, went outside the terms thereof and made a counter proposition, wherein it required, as a condition for completing the loan, that the Foss Improvement Company should transfer its property to some individual other than the real owner, for the alleged purpose of eluding a provision of law which, the defendant claimed, prevented it from making the loan; i. e., that the law prevented the Foss Improvement Company from holding stock in any other corporation; and that therefore it could not legally contract in accordance with the terms of its application. Of the correctness of this view of the law we venture no opinion at this time; nor do we deem it of any moment in the consideration of this case. The application, as shown by the record, disclosed the fact that the Foss Improvement Company was a corporation at the time the said application was accepted by the defendant. The terms of the application are plain and unambiguous. There was a failure on the part of the defendant company to complete the loan. It may possibly have been warranted in refusing to do so. On that, however, we express no opinion; but there can be no justification for its refusing to return the fee and commission exacted from the plaintiff before the application would be accepted, or even considered. The evidence shows that the Foss Improvement Company stood ready at all times to execute any and all mortgages, notes, or bonds which the terms of its application required. The record also shows that the defendant refused to comply with the terms of the application, but insisted upon a variance thereof, and offered in its stead a counter proposition, which was unsatisfactory to the plaintiff. It would be a dangerous thing to hold that a foreign company like the defendant in this case could solicit business and take applications for loans and collect advance fees and commissions from persons ineligible to membership, and then retain the fee that had been paid by reason of the ineligibility of proposed borrower. We do not say that the defendant company would do such a thing as this; but we do say that to reverse the judgment in this case would open the door for just such action, and would permit a fraud to be worked upon the citizens of this state. As was well observed by counsel for the defendant in error:

"It will not be questioned that when plaintiff in error invaded Oklahoma in pursuit of its business of making loans and selling stock, it did so with the knowledge, or the presumed knowledge, of the laws of this state; and that when the application of the defendant in error was taken and accepted by plaintiff in error, such was done with this knowledge on the part of the plaintiff in error." Perceiving no error in the record, the judgment of the county court of Washita county should be affirmed.

¶2 By the Court: It is so ordered.