168 Ind. 101 | Ind. | 1907
Appellant, as receiver of the American Savings & Loan Association, an insolvent building and loan corporation, commenced this suit to foreclose a mortgage on certain real estate situated in Elkhart county, Indiana. A demurrer to the complaint was overruled and thereupon defendant Darr filed an answer in four paragraphs, the first of which was the general denial. Appellant demurred to the second, third and fourth paragraphs of this answer, and the demurrer was sustained to the third, but overruled as to the second and fourth. Reply in three paragraphs, the first of which is the general denial. A demurrer was sustained to the third paragraph and overruled as to the second. The issues joined under the plead
The errors assigned in this appeal are based upon the overruling of demurrers to the answer and reply and denying the motion for a new trial.
The complaint is in one paragraph, and the following appears to be a correct summary thereof: The American Building & Loan Association was organized under the laws of the state of Minnesota in April, 1887. Subsequently, in July, 1892, its name was changed to the American Savings & Loan. Association. The general nature and character of its business, as stated, was “to assist its members in saving and investing money, in buying and improving real estate, and in procuring money for other purposes by loaning or advancing, under the mutual building society plan, to such of them as may desire to anticipate the ultimate value of their shares, funds accumulated from monthly contributions of the stockholders, and also other funds as may from time to time come into its hands.” The facts showing that appellee became a borrowing member of said association on August 1, 1890, and the execution of the mortgage and bond in suit, etc., are all alleged and disclosed by the complaint. The by-laws of said association, in force at the time appellee became a member, provided that the directors of the association should have the power to enter into such contracts and agreements, and appoint such agent for its business as they might deem proper for the best interests of the affairs of the corporation. It did a general building and loan business throughout the United States and carried on a general business of a mutual building and loan association from the time of its incorporation until January 14, 1896, at which time it became insolvent. In the year 1889 the legislature of the state of Wisconsin
It is alleged that appellee Darr paid as interest on his said loan the sum of $227.62, and that he agreed under the stipulations of the mortgage and bond in suit to pay six per cent on the $700 borrowed by him, which interest was payable monthly, and he was to pay sixty cents per share of stock dues until said stock should be matured, and be of the value of $100. These payments aggregated $11.90 per month. It is averred that upon the insolvency of said
The second paragraph of appellee Harr’s answer, which is addressed as a partial answer to the complaint, discloses that the bond and mortgage in suit were executed under the following circumstances: In the summer of 1890 the firm of Vesey, Miller & Company, partners engaged in the practice of law at the city of Goshen, Indiana, advertised themselves as loan agents, and said appellee applied to them for a loan of $700, and offered as security therefor the property described in the mortgage, being certain real estate situated in the city of Goshen, Elkhart county, Indiana. It is alleged that these loan agents informed him that they were agents of the American Building & Loan
By the laws of Minnesota in force at the time appellee Darr entered into the contract in suit any rate of interest charged in excess of the rate of ten per cent was deemed usurious. A copy of this -law is attached to the exhibit. It is alleged that the bond set up in plaintiff’s complaint is usurious, and that it charges an average rate of interest far in excess of the ten per cent. Appellee Darr demands that his membership and stock in said association be declared fraudulent from the beginning; that the pretended advancement of money upon his stock be declared and adjudged to be an ordinary loan of money, drawing only the legal rate of interest upon all unpaid balances, and that all 'payments made by him, as aforesaid, as dues upon said pretended stock shall be declared as payments upon such loan, and that each monthly payment made by him as herein set out, namely, $8.40 as dues, and $3.50 as interest, shall be construed in one lump payment of-said debt, and judgment be rendered accordingly.
The third paragraph of appellant’s reply, to which a demurrer ' was Sustained, after alleging facts similar to those alleged in the complaint relative to the organization of the association, avers that the government thereof was vested in a hoard of seven directors, elected by the stockholders ; that membership in the company was acquired by a person taking stock therein and paying the prescribed admission fee; that the directors were authorized, under the by-laws of said company, to enter into such contracts and appoint such agents for its business management as they might deem for the best interest of its affairs. The paragraph then proceeds to show, under the statute of Wisconsin enacted in 1889, that the association deposited with the treasurer of said state, bonds, mortgages and securities to the amount of $100,000; that this deposit was required by the laws of Wisconsin as a condition precedent before the association could enter and do business in said state; that such deposit was made by authority of the directors, was within the scope of their authority, and in pursuance of a resolution duly passed by them; that said association was licensed to do business in Wisconsin from year to year for a period of more than five years, during which period it did a large business in said state, and increased the number of its members therein from 162 to 216, which was the number of resident members in said state at the time the association became insolvent and went into the hands of a receiver; that great benefits resulted to the association and its members, including defendant Darr, in the business so done, and during the time said securities were deposited with the treasurer of Wisconsin the association received and collected all dues on stock held as collateral for advancement to its members, and received and collected all interest due on said securities to the same
It is alleged that the association was declared insolvent by the courts of Minnesota on January 14, 1896; that said Hale was appointed general receiver to collect and distribute its assets and wind up its affairs; that plaintiff was appointed receiver of said association by the courts of Wisconsin, in and for that state, on February 6, 1896; that said Hale, as such receiver, unsuccessfully sought by a suit in a court of Wisconsin to obtain the possession of the securities of said association then in the hands of the treasurer of said state, in order that he might himself distribute the entire assets of the company; that the supreme court of Wisconsin, on appeal; held that said Hale, the general receiver, had no right to said securities, and adjudged and decreed that plaintiff should proceed to collect and distribute the assets of such company in Wisconsin; that in compliance therewith, and for no other reason, said Hale, on January 17, 1896, duly assigned said securities, including defendant’s mortgage, to plaintiff. It is further shown that claims had been filed and allowed against plaintiff, as such receiver, in the sum of $64,000, and that the actual value of the securities in his hands is less than $100,000; that Hale, the general receiver, has administered his said trust, made his final report, and has been discharged; that the amount due and unpaid on defendant Darr’s mortgage is approximately $900; that the total stock payments made by him amount to $571.20, and that he has failed and omitted to file any claim against Receiver Hale for his distributive share of the assets of said association, and that
The evidence in the record shows the organization of the American Building & Loan Association on April 13, 1887, under and by virtue of the statutes of Minnesota, as a mutual building and loan association. It had its principal office and place of business at Minneapolis, in said state, and it continued to transact business until 1893, when its name was changed to the American Savings & Loan Association. Its government was vested in a hoard of seven directors, elected by the stockholders, and membership was acquired by taking stock in the company and paying the prescribed admission fee. On June 30, 1890, appellee applied to said association for membership therein. On the same day he applied for a loan, or advancement, from the association of $700. On July 1, 1890, he executed and delivered the following bid for a loan:
“Goshen, Indiana, July 1, 1890. Amount of money desired is $700. I hereby offer a premium of $50 per share. My certificate is number -.
Charles L. Darr.”
On August 4, 1890, appellee Darr executed the bond and mortgage in suit. He is shown to have paid, as monthly dues on the shares of stock owned by him, $576.60, and paid as interest on said loan the sum of $231, making a total of $807.60. An act of the legislature of Wisconsin
Plaintiff is the duly appointed, qualified and acting receiver of the association in Wisconsin, and all of the sesecurities held by the treasurer of said state have been turned over to him as such receiver. On July 7, 1891, appellee Darr wrote to the association at its home office in Minneapolis, stating that he had received two letters from the state treasurer of Wisconsin; that he did not know what to do in regard to the matter’, and inquired for information. On July 10, 1891, the association, through its manager at the home office, rvrote to him, advising him to pay no attention whatever to the letter he had received from the treas
The evidence shows that there are no creditors of the association in Indiana, and that claims in the sum of $64,009.30 have been filed and allowed against appellant as the receiver of said association in Wisconsin. The evidence also shows that after the company became insolvent, one of the stockholders residing in Wisconsin brought a suit in the Dana Circuit Court, seeking to secure the appointment of a receiver to take charge of the assets of said association in said state. .In this suit appellant was appointed by the court as receiver. Hale, the general receiver, it appears, was, upon his own motion, made a party to said suit, and demanded the surrender and turning over to him, for distribution, of all securities deposited with the treasurer of Wisconsin. The court refused to order the surrender of these securities to Hale, but ordered that the same be turned over to appellant as receiver for the association in Wisconsin, to be collected and applied for the benefit of the members of the association in that state. Erom this decree of the court Hale,, the general receiver, appealed to the Supreme Court of said state, wherein the decision and decree of the lower court was affirmed. Lewis v. American Sav., etc., Assn. (1898), 98 Wis. 203, 73 N. W. 793, 39 L. R. A. 559. Hale, it appears, removed said cause to the Hnited States Supreme Court on writ of error, but the proceeding on said writ was dismissed by the Supreme Court of the Hnited States.
It is shown that the value of the securities held in Wisconsin at the time the association became insolvent was $100,000; that the value of the securities turned over to appellant as receiver herein is $100,000; that if Receiver Hale had collected all mortgages on deposit with the treas
The laws of Minnesota pertaining to the organization of building and loan associations are set out and made a part of the evidence. Copies of the bond and mortgage in suit, and the assignments thereof, appear in the evidence. The statute of Wisconsin, which required foreign building and loan associations to make a deposit with the treasurer of state of securities of the value of $100,000 before such company could be authorized to do business in that state, was introduced in evidence. It provides, among other things, that no foreign building and loan association shall do business in such state “unless such association shall have and ’ keep on deposit with the state treasurer of Wisconsin, in trust, for the benefit and security of all its members in this state \i. e. the state of Wisconsin] securities of the actual cash value of $100,000, of the kind mentioned in section two of this act, to be approved and accepted by said state treasurer, and held- in trust as aforesaid, until all shares of association held by residents of this state shall have been fully redeemed and paid off by such association, and until its
There is evidence going to show the agency of Vesey, Miller & Company. They were authorized to solicit applications for stock and membership in the association, and to collect admission fees upon the same. Appellee Darr testified at the trial that he applied to Vesey, Miller & Company for a loan of $700, and received the money on August 14, 1890. That $70 was deducted from the $700, as a commission, and also three monthly payments. It was agreed that said appellee had paid every month on stock payments from September, 1890, to February 6, 1896, $3.50 interest and $8.40 dues. Part of these payments were made to Vesey, Miller & Company and part of them to the City National Bank of Goshen. He testified that Vesey, Miller & Company explained to him about this association and said that all members would share equally. He first learned of the existence of the company by seeing the advertisement of Vesey, Miller & Company. The first information he had that the company was doing business in Wisconsin was when he was ordered to make payments to the treasurer of Wisconsin. He first learned that his mortgage was held by the treasurer of Wisconsin about the time the company failed and became insolvent. He did not make very many payments, if any, after he ascertained
The disposition which we make of this case settles the question that no reversible error was committed by the trial court in overruling appellant’s demurrer to the second and fourth paragraphs of appellee Darr’s separate answer.
In respect to the method employed by the trial court in determining the amount for which judgment should be rendered in favor of appellant, we are not advised by the record. Counsel for appellant, however, in their brief, inform us that the trial judge in computing this amount charged said appellee with $700, the amount borrowed, and treated the same from and after October 3, 1890—on which date appellee’s mortgage and bond were deposited with the treasurer of Wisconsin—as a simple loan of money, and credited upon the debt all the sums paid by said appellee, with six per cent interest from the respective dates of pay-
We pass to a consideration of the facts established in this case and the rules of law applicable thereto. As shown, the association in question, through its directory, prior to‘the time said appellee became a borrowing member, in order to enter Wisconsin and be permitted to do business therein as a building and loan association, had, under the requirements of the laws of that state, deposited with the treasurer thereof $100,000 in value of the bonds and mortgages which it held against its members. The bond and mortgage in suit, as shown, were also deposited with the state treasurer a short time after their execution. These obligations of the members of the association, under the broad provisions of the statute of Wisconsin, were deposited by the association as a security and were to remain on deposit and be held by the treasurer of that state as a trust fund until all of the shares of the association held by resident members of that state should be fully redeemed and paid.
In the latter work, in the section cited, the author says: “Tts business is confined to its own members, its object being to raise a fund to be loaned among themselves or such as may desire to avail themselves of the privilege. This is done by the payment at stated times of small sums in the way of dues, interest on loans, and premiums for loans. Each shareholder, whether a borrower or nonborrower, participates alike in the earnings of the association, and alike assist in bearing the burden of losses sustained. It has what is called a capital stock, but this is only true in a modified sense. Unlike other corporations for profit, a share in a building association has, at its inception, only a nominal value. * * * It is only so far as such an
We have considered all of the points presented by appellant in this appeal, but find no reversible error, and being satisfied that the conclusion which we have reached is equitable and right, the judgment is therefore affirmed.