113 Iowa 523 | Iowa | 1901
The only question presented for our determination in this case is fhether the defendants are entitled to credit for any part of the dues paid on the 12 shares of stock issued to A. D. Kline, and assigned by him as collateral security for the loan and premium Tn question. At the outset of the discussion of this question, we should say that the association was purely a mutual one; that every stockholder was a member thereof; and that every member thereof was a stockholder. Except as to the liability incurred by borrowing mone'y of the association, every member assumed the same liabilities, and was entitled to a proportionate share of its earnings, from whatever source derived. With this mutuality of interest and liability in view, what are the rights of the defendants, and the rights of the other members and creditors as represented by the plaintiff ? There were two classes of members, which we may designate as “borrowers” and “nonborrowers.” To become a borrower, it was necessary to offer a premium of so much per share on the shares held by the applicant. The premium which these defendants contracted to pay Avas$600, represented by one-half of the amount for AA’hich they gaA*e their note. If the association had continued as a going-concern until the monthly dues paid on the 12 shares of stock had matured the. stock, then, by the terms of the note itself, a surrender of the stock could have been made in full payment of the money actually received and of the premium represented in the note, and in such case the defendants AA^ould, of course, receive indirectly the amount paid in dues. But the association became insolvent before
Appellees urge, however, that payment of the monthly-dues, so far as applied to six shares of this stock, was in reality the payment of the premiums contracted for. But this view will not stand the test of reason nor of equity. When the defendant A. D. Kline became a member of this association, he voluntarily placed himself on the plane of exact equality with the other members thereof. When he secured the loan, and executed his obligations therefor, he entered into a new, separate and distinct contract, whereby he agreed to pay a certain sum in cash, unless, by reason of the maturity of his stock, he should choose to surrender it in payment of his obligations. This was optional, not compulsory with him. His stock never matured. In common with every other member of the association, he was placed in an entirely different position. If permitted to offset the dues paid by him on any portion of his stock against his debt to the association, he would be deriving therefrom an unjust advantage over the nonborrowing members, who are, of necessity, compelled to take in final settlement for their stock whatever the receiver may be able to pay. To leave the borrowing member in this same class and situation is but just and equitable. By so holding, we leave him in this situation: He should be charged with the $600 actually received by him, with interest thereon from the date it was received at the rate of 7 per cent, per annum. On this amount he should be credited with the interest paid by him on the $600, and with the interest on this interest, computed thereon as partial payments, at the rate of 7 per cent, per annum. This leaves him with his 12 shares of stock, upon which he may receive whatever sum may be finally found’ payable upon settlement of the affairs of the association.’ As thus modified', the judgment is affirmed. — Modieied and aeeirmed.