Opinion
No. 29000
Decided June 17, 1942.
Interest — Right of appeal not waived by accepting judgment and interest, when — Party reserved right to appeal on balance of interest claimed — Deposit account in building and loan association — Interest rate fixed by board of directors controls recovery, when.
1. Where a party to an action is given judgment including interest at a rate less than that claimed, such party, by accepting the amount found due by the trial court with a reservation of the right of appeal in respect of the balance of interest claimed, does not thereby waive the right of appeal with respect to the question of the proper amount of interest due. ( Beals v. Lewis, 43 Ohio St. 220, approved and followed.)
2. No rate of interest other than that fixed by a building and loan association's board of directors pursuant to law may be recovered from a building and loan association on a deposit account in the absence of a breach of the deposit contract by the association.
APPEAL from the Court of Appeals of Lucas county.
On August 23, 1932, Susan A. Corbett set up a joint and survivorship account with her own funds in The Home Building Savings Company in the approximate amount of $10,000, with one Anna E. LaRocque as joint owner with joint and survivorship rights. Both Mrs. Corbett and Mrs. LaRocque signed a paper containing the following:
"We, the undersigned, do hereby severally agree to be governed and bound by the Constitution, By-Laws, Rules and Regulations of The Home Building Savings Company of Toledo, Ohio, now in force or that may hereinafter be in force."
Upon the death of Mrs. Corbett, the funds were transferred to the survivor under new accounts.
In cause No. 152118, being an action brought by Mary E. Staunton as executrix of the estate of Susan A. Corbett, deceased, against Anna E. LaRocque and The Home Building Savings Company, the Court of Common Pleas of Lucas county found that at the time of opening that account, Susan A. Corbett was not of sound mind and was without requisite contractual capacity to make the transfer of the account to Anna E. LaRocque and that the joint and survivorship account and the transfer of the funds were wholly void and were set aside.
While the journal entry contained the finding that no one other than the executrix "is entitled to have immediate possession and control of said funds," the parties were limited to those above noted. Anna E. LaRocque was ordered to surrender and deliver to the executrix the passbooks evidencing ownership of the funds with the provision that in case of non-compliance the passbooks were canceled and declared null and void. However, this journal entry contained no order of any kind against The Home Building Savings Company.
The effect of this journal entry, which the evidence shows was entered June 19, 1939, was to establish the right to the fund between the executrix and Anna E. LaRocque.
On June 26, 1939, attorneys for the executrix made demand by letter upon The Home Building Savings Company for the payment of the funds to the executrix. On June 28, 1939, The Home Building Savings Company, by letter, refused to acknowledge not only the written demand but a further demand made by telephone.
On July 1, 1939, the instant action was instituted in the Common Pleas Court of Lucas county for the principal fund and six per cent interest thereon from July 1, 1939. The Home Building Savings Company answered, admitting the demand and alleging that a part of the funds in the accounts in question was claimed by Mary E. Carabin, also known as Mary E. Gillen, executrix of the last will and testament of Frank A. Carabin, deceased, and by Mary A. Carabin, Clarence A. Irwin and Edward H. Ray, all of whom had given The Home Building Savings Company notice of their respective claims. The answer further alleged that the rights of the parties to the deposits in question could not be determined unless the parties above-named were made parties to the action and permitted to set up their claims.
On September 20, 1939, The Home Building Savings Company filed a motion to consolidate the instant case with the case of Carabin et al. v. LaRocque et al., cause No. 155482 on the docket of the Court of Common Pleas of Lucas county, on the ground of community of interest and for the protection of The Home Building Savings Company. On the same day, The Home Building Savings Company also filed a motion asking that the above-mentioned persons be made parties to the instant case. These motions were overruled, and the cause came on to be heard before the court, a jury having been waived.
At the trial, the journal entry in cause No. 152118, supra, the letters above referred to between attorneys for the executrix and The Home Building Savings Company, as well as a letter from Edward H. Ray to The Home Building Savings Company under date of December 15, 1937, were introduced. In the letter from Ray, it was said: "* * * I again want to call your attention to the fact that with reference to these accounts the Probate Court enjoined the company from paying anything out thereon until the further order of the court, so that consequently the injunction will have to be dissolved before you are in a position to pay out on these accounts."
The trial court rendered judgment in the instant case against The Home Building Savings Company and in favor of the executrix in the sum of $12,325.44. The journal entry contained the following:
"It being still contended by the plaintiff that she is entitled in this cause to recover from the defendant the full amount prayed for in her petition, to wit: the turn of eleven thousand five hundred eighty-nine dollars and fifteen cents ($11,589.15) with interest at the rate of six per cent (6%) per annum from the 1st day of July, 1939, to this date, and that this court is in error in giving judgment to the plaintiff for the sum of $12,325.44 only; the plaintiff objects and excepts to the foregoing findings and orders of the court in that respect and to that extent.
"It is further ordered by the court that the defendant forthwith pay to the clerk of courts the costs herein and to the plaintiff the amount of said judgment; that the plaintiff be and she is ordered directed to accept said sum from the defendant; and that the plaintiff, by complying with this order and by accepting said sum, shall not be held or considered to have waived her objections and exceptions to the findings and orders of this court, to have waived her right to prosecute an appeal from the findings, orders and judgments of this court, or to be otherwise prejudiced."
Upon appeal to the Court of Appeals, the judgment of the trial court was affirmed.
The cause comes to this court following the allowance of a motion to certify the record.
Messrs. Fraser, Effler, Shumaker Winn and Mr. R.B. Swartzbaugh, for appellant.
Miss Elena Ray and Mr. Robert J. Meffley, for appellee.
The first question for decision is the right of appellant to appeal from a part only of a Judgment in her favor. We hold that appellant, by accepting the amount found due by the trial court, with a reservation of the right to appeal in respect of the balance claimed, did not thereby waive her right to appeal with respect to the question of the proper amount of interest due her. Beals v. Lewis, 43 Ohio St. 220, 1 N.E. 641.
We come, then, to the question of whether appellant was entitled to interest at the rate of six per cent per annum as claimed. Unless there was no reasonable ground for the withholding of payment until such time as payment was ordered by a court of competent jurisdiction, we do not see any reason for the liability of appellee for more than the interest fixed by the directors on the deposits pursuant to law and the constitution, by-laws, rules and regulations of appellee. In other words, no rate of interest other than that fixed by a building and loan association's board of directors pursuant to law may be recovered from a building and loan association in the absence of a breach by the association of the contract of deposit.
The record discloses that others than appellant were claiming the money in these deposit accounts. Had appellee chosen to take advantage of interpleader under Section 11265, General Code, it would not have been liable for any interest thereafter accruing. Not having done this, it remained liable for interest under its contract until such time as the contract was terminated.
A short answer to this case would be that the trial court did not find that there was any wrongful refusal of the appellee to pay upon a proper demand. But we may examine the evidence, not to weigh it but to determine whether the trial court abused its discretion in not making such a finding. Both appellant and appellee claim the existence of a contract, i. e., that the money was deposited in pursuance of a contract, and appellant admits that she is entitled under the contract only to such interest as was declared by appellee's board of directors. However, appellant claims that the contract was breached when the claimed demand of June 26, 1939, was not honored. The trial court did not find that there was any wrongful refusal to pay the money upon demand. This was a factual question to be determined by the trial court and there is evidence in the record justifying the failure to make such a finding.
In cause No. 152118, wherein the title to the funds had been settled as between appellant and Anna E. LaRocque, there was no order that appellee should deliver the fund to anyone. In fact, there was no order of any kind made against appellee.
While the demand made following the journalized order in cause No. 152118 could hardly be deemed a proper demand under the circumstances, appellee's secretary admitted that if a proper demand had been, made, it would not have been honored due to the advice of appellee's attorney.
A letter to appellee from its attorney was introduced, advising appellee of an injunction by the Probate Court whereby appellee was enjoined from paying out of the accounts in question until further order of the court and appellee's secretary testified that in the contest of Susan Corbett's will appellee "received notice enjoining us from paying." Testimony was also offered showing that the persons whom appellee had attempted to make parties had in their possession the two passbooks in question.
Counsel for both sides stipulated that there was pending in the Court of Common Pleas of Lucas county cause No. 155482, entitled "Mary E. Carabin, as Executrix of the Estate of Frank A. Carabin, Mary E. Carabin, also known as Mary E. Gillen, Clarence A. Irwin, Edward H. Ray v. Anna E. LaRocque, Mary E. Staunton, as Executrix of the Estate of Susan A. Corbett, deceased, J. Alyward LaRocque, The Home Building Savings Company." Counsel for appellant made the reservation that he would not admit the relevancy of such case and asserted that it was immaterial and irrelevant to the issues in the instant case.
It was also stipulated between counsel that a petition introduced was the one filed in cause No. 155482, Court of Common Pleas of Lucas county, entitled "Mary E. Carabin, Executrix of the Estate of Frank A. Carabin, deceased v. The Home Building Savings Company." However, the trial court sustained appellant's objection to the introduction of that petition.
Upon the death of Susan A. Corbett, the funds were transferred to the savings and passbook accounts Nos. 34170 and 34246 then standing in the name of Anna E. LaRocque. The funds had been regularly deposited in a building and loan association. According to law, the joint and survivorship account had been transferred to Anna E. LaRocque. Sections 710-120 and 9652, General Code. Interest had been credited to the accounts in pursuance of Section 9673, General Code. We see no reason to discuss any other statutory provisions in respect of interest.
As we find no prejudicial error in the record of this case in either the trial court or the Court of Appeals, the judgment of the Court of Appeals should be, and hereby is, affirmed.
Judgment affirmed.
WEYGANDT, C.J., MATTHIAS and ZIMMERMAN, JJ., concur.
WILLIAMS and HART, JJ., concur in the syllabus but dissent from the judgment.
BETTMAN, J., not participating.
The plaintiff in her petition, grounding her action upon two deposit accounts (which had previously been adjudged to belong solely to plaintiff's decedent, Susan A. Corbett, at the time of her death), alleges demand for payment of the amounts thereof and the wrongful refusal of payment by the defendant. In other words the gist of the action is the breach of the contracts of deposit. Under uncontradicted facts plaintiff, as executrix of the depositor, was entitled to the amounts on deposit and it was the contractual obligation of the defendant The Home Building Savings Company, to pay the amounts due to the depositor's executrix on demand. Consequently as a matter of law the refusal to pay on demand made, constituted a breach of the contracts of deposit.
Judgment was rendered in favor of plaintiff for the full amount of the two deposit accounts together "with interest at the rate of three per cent (3%) per annum, payable semi-annually, plus interest at the rate of one-fourth per cent (1/4%) on the amounts due on said deposit accounts on June 30, 1939, June 30, 1910, and January 1, 1941." This adjudication as to interest was based upon the resolutions of the board of directors of the defendant company with respect to interest upon savings deposits.
The sole question is the amount of interest due between the date of breach and the day of judgment. Plaintiff claims that the rate should be 6 per cent instead of 3 per cent and 1/4 per cent as allowed by the trial court. The right to interest and the rate of payment are not creatures of the common law. The right itself and the rate recoverable are fixed by contract between the parties or arise out of statute or may be a matter of both contract and statute.
In Ohio interest is regulated by three statutory provisions which are:
Section 8303, General Code: "The parties to a bond, bill, promissory note, or other instrument of writing for the forbearance or payment of money at any future time, may stipulate therein for the payment of interest upon the amount thereof at any rate not exceeding eight per cent per annum, payable annually."
Section 8304, General Code: "Upon all judgments, decrees, or orders, rendered on any bond, bill, note, or other instrument of writing containing stipulations for the payment of interest in accordance with the provisions of the next preceding section, interest shall be computed till payment at the rate specified in such instrument."
Section 8305, General Code: "In cases other than those provided for in the next two preceding sections, when money becomes due and payable upon any bond, bill, note, or other instrument of writing, upon any book account, or settlement between parties, upon all verbal contracts entered into, and upon all judgments, decrees, and orders of any judicial tribunal for the payment of money arising out of a contract, or other transaction, the creditor shall be entitled to interest at the rate of six per cent per annum, and no more."
Section 8303, General Code, merely provides that parties to a bond, bill, promissory note or other instrument of writing may stipulate the payment of interest at any rate not exceeding eight per cent per annum. This section has no bearing in the case at bar for the reason that it applies only to specified contracts which fix the rate of interest.
Section 8304, General Code, relates to interest on judgments, decrees or orders rendered on any bond, bill, note or other instrument of writing which stipulates for interest as provided in Section 8303. Section 8304 likewise has no bearing here.
In our judgment the rights of the parties herein are regulated by Section 8305, General Code, which applies inter alia to specified contracts in which no rate of interest is stipulated. These contracts (aside from the entries in the passbooks) in so far as material are as follows: "We, the undersigned, do hereby severally agree to be governed and bound by the constitution, by-laws, rules and regulations of The Home Building Savings Company of Toledo, Ohio, now in force or that may hereinafter be in force." The rate was not fixed by the contracts but was determined from time to time by the board of directors. The doctrine of ejusdem generis, if applied, would restrict the meaning of the words, "other instrument of writing," so as to include only such an instrument as is similar to a bond, bill or note; but this doctrine is never applied where other language of the same statute requires an unrestricted broad meaning and cannot be applied here for the reason that the statute refers, in addition, to a book account and verbal contracts. Obviously a passbook is a book account in which the entries are made by the party who received the money deposited and is admissible in evidence in an action against such financial institution. Then, the term "verbal contracts," if the word verbal is used in its most comprehensive sense, is at least as broad as the term parol contracts, which latter includes all contracts both oral and written except specialties. A construction that would make the statute apply to all oral contracts and only certain written contracts would be anomalous. What purpose could there be in omitting a certain kind of written instrument? When all the language of the section is considered together it seems evident that the legislative intent was to cover contracts both oral and written. The meeting of minds between the depositor and depositee herein was evidenced by the language of the deposit contracts quoted above plus the passbooks which contained the book accounts. These together constituted verbal contracts between the parties in which the rate of interest was Lot stipulated. Upon breach of the contracts the depositor-depositee relation terminated as between the parties thereto, the right to determine the interest rate by resolution of the board of directors ceased and interest began to run as damages upon the amount due and payable on the contracts at the rate of six per cent in accordance with Section 8305. For the period after the breach, the amount of interest recoverable is for the court — not the board of directors.
HART, J., concurs in the foregoing dissenting opinion.