95 P. 54 | Wyo. | 1908
The defendant in error, who was the plaintiff below, is a Colorado corporation and belongs to that class of private corporations commonly known as building associations. Its original corporate name was The Columbia Building and Roan Association. In 1899 the name was changed to The Columbia Savings and Loan Association. This suit was brought by the association to recover an amount alleged to be due upon the note or contract of a borrowing shareholder.
Robert O’Malia, then a resident of the City of Rawlins, in this State, became a member of said association June 4, 1890, and received a certificate of that date entitling him to ten shares of the capital stock, subject to the conditions, rules, regulations and by-laws of the association. The bylaws required of each shareholder a monthly payment on the last Saturday of each month of seventy cents on each share, where no loan had been obtained on the stock, but in the event of such loan the payments were regulated by another provision presently to^ be referred to. It was also stated in the by-laws that each shareholder should be entitled to receive for each share named in his cetrificate one hundred dollars when the monthly payments and the profits apportioned thereto should equal that sum. Also that a shareholder was entitled to a loan from the association of an amount equal to the value of his shares at maturity, upon making a proper application therefor, and giving the required security. While holding said ten shares, and having regularly made the monthly payments thereon, O’Malia applied for, and, on May 26, 1893, received, a loan of one
“No. 500. $1,000.
“Rawlins, Wyoming, May 26, 1893.
“In consideration of One Thousand ($1,000) Dollars loaned to me by the Columbia Building and Loan Association, we or either of us hereby promise to pay said Association at its office in Denver, Colorado, Sixteen and 25-100 Dollars per month, payable on the last Saturday of each and every month until the stock borrowed upon shall have matured in accordance with the by-laws and rules of said association and this loan is thereby repaid. The shares of stock in the Columbia Building and Loan Association held by the maker of this note as shown by Certificate of Stock No. 1753 are hereby transferred and pledged to the said association as collateral security for the performance of the conditions of this obligation and of the trust deed securing same.”
The trust deed provided that in case of default in any of the payments of principal or interest, according to the tenor and effect of “said promissory note” the whole of said principal sum secured and the interest thereon to the time of sale, may at once, “at the option of the legal holder thereof, become due and payable,” and the premises sold as if the indebtedness had matured. Payments by borrowing shareholders were to be governed by the following provision of the by-laws:
“Shareholders having obtained loans shall, on or before the last Saturday of each and every month until the stock borrowed upon shall have matured and the loan is thereby repaid make or cause to be made payments as follows: One*458 seventy-second of the sura borrowed (less the membership fee), also interest at the rate of 3 per cent per annum upon the original amount of the loan.”
During the period intervening between the date of his membership and the time when he received the loan, O’Malia regularly paid the required monthly payment of seven dollars dues on his stock, and, after receiving the loan, he regularly paid the monthly installment required by the note or contract until and including the motnh of May, 1896, making in the aggregate seventy-two monthly payments. There is some dispute as to whether his last payment was for the month of May or June, 1896, but we think it reasonably clear from -the evidence that it was the payment due the last Saturday in May. It was entered in his pass book as paid May 30, though it was not credited on the association’s books until some time in June. No further payments were made. O’Malia died September 2, 1900, and shortly thereafter James H. Clause was appointed administrator of hi§ estate. The association presented to the administrator its claim here sued upon, and the same was rejected April 13, 1901. The trust deed given to secure the loan aforesaid was made to Clyde J. Eastman, as trustee, and provided that in case of the latter’s death, resignation, removal or absence, or failure or inability to act, the sheriff of Carbon County should become his sucecssor in trust.
On July 2, 1901, the association as plaintiff filed a petition for the commencement of a cause in the District Court of Carbon County, naming James H. Clause, a.s administrator of the O’Malia estate, and Creed McDaniel, the sheriff of Carbon County, as defendants. The facts deemed necessary to a recovery upon the claim of the association were set out, and it was also alleged that the trustee named in the trust deed had resigned, and that the sheriff therein appointed as his successor in trust had declined to accept the trust. The prayer of the petition was for judgment against the administrator for the amount alleged to be due, viz: $680.70, with legal interest from May 27, 1901, and
A second amended petition was filed June 26, 1902, and a summons was issued thereon June 27, 1902. The summons was duly served, and the defendant administrator filed a demurrer, which was sustained, and judgment was rendered thereon against the association. That judgment was reversed by this court on error, and the cause remanded with directions to overrule the demurrer, and for further proceedings. (13 Wyo. 166.) Upon the return of the cause to the district court, an answer was filed to the second amended petition, and the plaintiff filed a reply.
The original and each amended petition alleged that the shares of stock held by the decedent had not matured, and that their value June 27, 1901, a few days prior to filing the first petition, was $887.85. Each petition alleged a total indebtedness due May 27, 1901, of $1,568.55, consisting of $1,000 principal, $553.15 interest from June 3, 1896, to May 27, 1901, and $15.40 -insurance charges paid by the association with interest. The original, as well as the first amended, petition credited the alleged value of the stock, and asked judgment for the balance, $680.70, with interest thereon from May 27, 1901. The second amended petition alleged a readiness to credit the stock value, but, without deducting it, claimed judgment for the total indebtedness aforesaid, with interest from the date mentioned. The insurance charges were not allowed, and need not therefore be considered. It appears that the interest included in the alleged indebtedness was computed at the rate of $9.25 per month, and that the interest embraced in the judgment was computed at the same monthly rate to the date of judgment. This was upon the theory that the agreed monthly installment of $16.25 included the monthly stock dues of seven dollars, leaving the balance as interest. The evidence shows that the installments paid were each so credited upon the books of the association, $7 to dues and $9.25 to interest, and the first two pajunents made by the decedent under the loan contract were entered in his pass book in -two separate items of $9.25 and ■ $7, and in entering therein the three succeeding payments the figures $9.25 were entered in the column headed “Interest and dues” and $16.25 in the column
1. The defendant by his answer alleged and it is here contended that upon the by-laws of the association, and the representations of its agents and printed circulars, the obligation of the decedent as a shareholder was to pay seventy cents monthly on each share for a period of seventy-two months, and that the contract for the repayment of the loan obligated him only to make the agreed monthly payments the remainder of the period of seventy-two months, and thereby cancel the indebtedness. This position cannot be sustained..
It is true that a printed circular or prospectus distributed by the association explaining its methods and purposes stated that “shares are estimated to mature in six years, and the member may then withdraw such shares and receive $100 therefor.” But that was immediately preceded by the statement: “Whenever the amount in the loan fund to the credit of any share (from monthly payments and profits) is equal to $100 such share shall be fully paid in and be considered to have fully matured and no more monthly payments shall be required.” And it was followed by a statement that the six year estimate as to maturity of stock is a conservative one based upon the experience and calculations of the larger English associations of a similar character. It is also true that the by-laws contained a like estimate of the period required to mature the shares, and stated that all loans and calculations are made upon that estimate; and the illustrations furnished by the association as to the cost to shareholders, both borrowing and non-borrowing, were based upon seventy-two monthly payments. The by-laws however plainly provided that each shareholder would be entitled to receive $100 for each share when the monthly payments and profits apportioned thereto should equal that sum. There is testimony also to the effect that at
It is apparent that the controlling provision as to the maturity of the stock, both in the circular and by-laws, is that which states that the stock will mature whenever the amount to its credit shall equal its par value. Upon that basis it would be manifestly impossible to arbitrarily determine in advance the date of maturity. Though the period required to mature the stock might be estimated, it could not be definitely fixed without ignoring the essential features of the association, and the plan adopted for maturing its stock. Six years was not stated as an arbitrary or fixed period for the stock to run, or for limiting payments, but it was expressly stated to be an estimate. It is clear that the impossibility of stating a definite time otherwise than as an estimate or opinion was recognized by the officers of the association, since they did nothing more in that respect than to state an estimated period. Such an estimate, plainly stated to be such, is not to be distorted into a contract or promise to mature the shares within the estimated period.
Where a mutual building and loan association provides for maturing its stock by the equal application to all of it, or all of a series, of the monthly dues and profits, as in the case of the association here, the argument that the association is bound by an estimate as to time of maturity, so as to limit the period for payment of dues, has not usually, if ever, been regarded with favor by the courts. That the cir
The rule laid down in the by-laws for determining the monthly payments required of borrowing members seems to be unnecessarily complicated. It is difficult to understand why the stated method was employed except upon the theory that it was not desired to designate as interest the amount to be paid for the use of the money advanced. The section' is not, however, open to the construction that it provides for liquidating the indebtedness with seventy-two monthly payments, nor that it provides for interest upon the loan merely at the rate of three per cent per annum. The section itself states that the monthly payments thereby provided for shall be continued until the stock borrowed upon shall have matured, and it must moreover b.e construed with the other provisions, particularly that one which requires shareholders to pay each month seventy cents on each share, unless a loan
2. The defendant pleaded in separate defenses both the general statute of limitations as to an action upon, a contract
The theory of the contention as to the general statute is, first, that the cause of action accrued upon the occurring of the first default, the last Saturday of June, 1896, and second, tha.t if, as the plaintiff claimed, the first default occurred in the payment due the last Saturday of July, 1896, then the action was not commenced within five years thereafter for the reason that the service of the summons issued upon the petition filed July 2, 1901, having been quashed, because improperly directed to and served by the coroner instead of the sheriff, the summons and service thereof was not sufficient for the commencement of the action, within the meaning of the statute as applied to the limitation of actions. Upon the ground that the summons aforesaid was void and its service quashed, it is contended that the action cannot be deemed to have been commenced with its issuance, and therefore, that it was not commenced within three months after the rejection of the claim by the administrator, which occurred April 13, 1901; and that under the special statute the suit was barred before a valid summons was issued. With reference tó the point made as to the summons and the quashing of the service thereof, the defendant in error relies to save the bar of the statute upon the provisions of Section 3465, Revised Statutes of 1899, which reads as follows:
*466 “If in an action commenced in due time, a judgment for the plaintiff be reversed, or if the plaintiff fail otherwise than upon the merits, and the time limited for the commencement of such action has at the date of such reversal or failure expired, the plaintiff, or if he die and the cause of action survive, his representatives may commence a new action within one year after such date, and this provision shall apply to any claim asserted in any pleading by a defendant.”
The question raised upon the defective service will be first considered. The first summons was ordered quashed November 8, 1901, and an alias issued on that date and duly served. Another summons was issued upon the amended petition December 7, 1901, and duly served; and summons was again issued June 27, 1902, upon the second amended petition, and it was duly served. Each new summons was issued within the year after the date of quashing the first. The question therefore is in this connection whether the filing of the petition and issuance of the summons of July 2, 1901, which was afterwards quashed, operated to commence the action, so as to render applicable the statutory provision above quoted, assuming that the general statute had not barred the action at the date last aforesaid.
Within the meaning of the limitation statutes it is declared that “an action shall be deemed commenced * * * * as to each defendant, at the date of the summons which is served upon him, or on a co-defendant who is a joint contractor, or otherwise united in interest with him; and when service by publication is proper, the action shall be deemed commenced at the date of the first publication, if the publication be regularly made.” (R. S. 1899. Sec. 3461.) And that “an attempt to commence an action shall be deemed equivalent to the commencement thereof * * * * when the party diligently endeavors to procure a service; but such attempt must be followed by service within sixty days.” (Id. Sec. 3462). A civil action
The question is not affected, in our opinion, by section 3462, making an attempt to commence an action followed by service within sixty days equivalent to the commencement thereof, for here service was obtained upon the summons issued, and if the action was not commenced by the issuance and service of that summons, Section 3465 would not apply, and there would be no extension of the statutory period. But if the action was commenced, then section 3465 applies if there was a failure by the plaintiff otherwise than upon the merits. The court had unquestioned jurisdiction of the subject matter of the action, so that if the service of the summons by the coroner conferred jurisdiction over the person of the defendant, the action must be held to have been commenced. The mere fact that the service was quashed
The decisions are not harmonious as to the particular defects in a summons which will render it void and permit on that ground a collateral attack upon the judgment. Various defects have been* considered in that respect, and as to most of them a conflict of authority exists. There is some conflict, but not much where the process has been misdirected. (Alderson on Judicial Wr. & Proc. ch. 6). Where there has been actual personal service, and therefore notice of the action, the weight of authority and the better reasoning favors the theory that a mistake in the direction or address renders the process voidable, but not void. In the work above cited Mr. Alderson says, in summing up the matter: “The progressive and equitable idea is, that in the administration of justice, substance is to be held in higher regard than form; and technical defects should never be permitted to work injustice or deny substantial right. Process that is 'in every other particular valid, should not, for any omission of or defect in the direction, be considered more than voidable.” (Id. Sec. 25.)
A practice had grown up in Massachusetts of having the writ directed to and served by a coroner whenever the sheriff was a member of a corporation, which was either plaintiff or defendant. Finally that practice was held to be and to have been improper, but it was also held that the defect would not invalidate the judgments in cases wherein the incorrect ■ practice had been followed. The court said: “It is not too late to go back to the true construction, and
The summons and service not having been void, but voidable only, the action was commenced within the meaning of section 3465. Upon the quashing of the service there
If, nothwithstanding that the time limited had expired at the time of the failure through the quashing of service, a new action might have been brought within one year thereafter, there seems no good reason for doubting the right of the plaintiff to cause the issuance and service of another summons in the same action, upon the petition previously filed or an amended petition, thereby commencing the action anew. It is equivalent to commencing a new action within the meaning of the statute authorizing it. Such action is indeed then to be deemed commenced under section 3461 at the date of the summons served upon the defendant, but the limitation period will have been extended one year from the date of the previous failure by the operation of section 3465.
The provision of the trust deed as to maturing the debt upon default in making the agreed monthly payments is, that in case of such default “the whole of said prnicipal sum hereby secured and the interest thereon to the time of sale, may at once, at the option of the legal holder thereof (the note) become due and payable, and the said premises be sold in the manner and with the same effect as if the said indebtedness had matured.” It 'does not appear that the option thus permitted of making the whole debt due and payable was exercised until the bringing of the suit. The contract did not declare that any default would at all events render the principal debt due at once, but only that
There is another provision entering into the contract here which seems to contemplate that a default in a single installment shall not immediately mature the debt. It is found in the by-laws of the association, and declares that “if any shareholder or other person shall neglect to pay the interest, or dues on his loan, or the regular monthly installments, or other fees, for six months, the association may compel payment of principal, interest, fees or dues, by proceedings on his note and foreclosing the mortgage or other security, which shall at once become due and payable.” Whether or not this provision matures the debt absolutely without an option at the time it takes effect, it is not to be construed as doing so until after a failure for six months to make the required payments. Our attention has not been called to any other stipulation or provision affecting this question. The note or contract states no definite time for the payment of the principal of the loan, except that it requires the monthly payments to be made until the stock
3. Noth withstanding that there was no showing by the plaintiff, or indeed by either party, as to the value of the shares borrowed upon, or whether or not they had at any time matured, the plaintiff was permitted to recover the principal amount loaned and the agreed monthly interest thereon to the date of judgment. This we think was erroneous.
The note or contract sued upon stipulates that, in consideration of the loan, the stated monthly installments- shall be paid “until the stock borrowed upon shall have matured in accordance with the by-laws and rules of said association and this loan is thereby repaid.” The agreement is not to pay the amount of the principal within a certain period, subject to a proviso or condition that the debt shall be deemed satisfied or cancelled whenever the stock shall mature, as in most of the reported building association cases which have come to our notice. The note here sued on had not become due upon its face because of the expiration of -a definite time for which it had been given, but it became due and enforceable, if at all, because the monthly payments had not been continued as agreed until the maturity of the stock. The petition alleges that the value of the stock in June, 1901 had reached the sum of $887.85, only $112.15 less than its value at maturity. The cause was not tried until more than four years later. Continuous payments had been made previous to default for six years, a period originally estimated by the association to be sufficient
Had the note provided for a payment of the sum borrowed within a stated period, which had expired, that it had become due would then have been evident, and generally it would then have devolved upon the defendant to show payment or other facts relied upon to defeat a recovery. But upon the terms of the contract here, the case presents an exception to the general rule, and the plaintiff to maintain ■ its right to recover was bound to prove a negative upon which its claim depended, viz: that the stock had not matured, for there could have been no default unless the neg-„ ative was true, and hence no breach of the contract. Certainly the association would have no right to recover the principal if at any time it became paid by the maturing of the stock, nor interest after such payment occurred.
A similar question has been considered in two cases, though under different contracts and circumstances, but they illustrate the proposition. In Tyrrell L. & B. Asso’n. v. Haley, 139 Pa. St. 476, a bond had been given to a
“If the defendant is right in his contention, he certainly ought to have an opportunity of showing it, under his equitable plea of payment. As the case stands, he, has a judgment at law against him for the full amount of the mortgage, which carries with it the costs of suit, while I see no relief from the effect of this judgment, except by a proceeding in equity, which involves additional expense and trouble. It would be unjust to subject him to all this, if, in point of fact, his series has matured. It is a well settled rule that when such stock has matured, the debt is paid, and the borrower is entitled to a return of his securities. There may be circumstances which prevent or delay the maturity of the stock in a given instance. This may result from fraud or mismanagement on the part of the officers of the association, or from loss on investments. ' But, when the stock has fairly matured, I am unable to see what right the association has to recover a judgment against one of its stockholders for the amount- of its loan.”
In Concordia Sav. & Aid Asso’n. v. Read, 93 N. Y. 474, the action was to foreclose a mortgage given to secure a
The facts here differ materially from those in the New York case. Here the member had continued to pay throughout the entire period originally estimated to ■ be sufficient, and though the association was not bound to mature the stock within the estimated period, it is not unreasonable to suppose that it made and published the estimate in good faith, believing it to be conservative, and expecting the stock to reach maturity within the time so stated. The plaintiff alleged in each petition that the stock had not matured. That allegation must have been regarded as material. We think it was material. It is not apparent to us how a default could be established except by showing that the stock had not matured, for it is only until maturity that the payments were agreed to be made. We are not now considering whether the value of the stock should be credited to defendant. The proposition goes to the foundation of plaintiff’s case. In our opinion it was necessary for the plaintiff, not only to allege but to prove that the stock had not matured, in order to establish a default under the contract sued on, especially so as the facts are peculiarly within the knowledge of the officers of the .association. Not only does the petition, allege a value of the shares approaching close to maturity, but it is stated in the brief of the as
As the case must be remanded for new trial, we think it proper to refer to the failure of the court to credit the value of the shares. While it is argued on behalf of the association that the application of the value of the stock in reduction of the indebtedness was not required in this action upon the note, it is, however, conceded that no court would, enforce payment of the association’s claim without compelling it to account for the value of the stock. It is not suggested how that accounting would be compelled. The judgment heretofore entered requires the administrator to pay the full amount of the claim, principal and interest, and necessarily leaves the stock or its value with the association. To get away from the necessity of paying the amount of the judgment, if allowed to stand in its present form, would seem to require, unless the association should voluntarily and satisfactorily account for the stock, an action of some sort by the administrator. In this connection the remark of the court in the Pennsylvania case above cited is pertinent. It would be unjust to require the defendant to pursue another remedy, perhaps expensive and troublesome, when the whole matter is capable of settlement in the one suit.
While the stock is technically held as collateral security, .and the rules governing such securities are tó a great ex
Moreover, in the 'case at bar, the plaintiff alleges the value of the stock at a specified time, and a willingness to credit the value upon the amount found to be due. The answer does not object to such credit. It denies that the value is only the amount stated in the petition, and alleges that the stock had matured, or ought to have matured, and that by reason of its maturity, there was no indebtedness. Upon the pleadings, therefore, there is an admitted item of credit, and, without further proof, the value of the
For the insufficiency of the evidence to show that the stock borrowed upon had not matured at the time of the alleged default, and when, if ever it did mature, the judgment will be reversed, and the cause remanded for new trial.