128 Mo. App. 329 | Mo. Ct. App. | 1908
This is a suit by plaintiff for an accounting and to have a certain' deed of trust executed by him canceled. • The defendant is a building and loan association under the laws of Missouri, located at the city of St. Joseph. On the 21st day of September, 1896, the plaintiff made sworn written application to the defendant association for a loan of $600 on the real property described in the said deed of trust. On the 21st day of December next following plaintiff with his wife Mattie executed, what was denominated a mortgage bond, wherein they acknowledged themselves indebted to the defendant in the sum of $600 borrowed money “on six shares of the fifty-seventh series of the capital stock of said society now (then) owned by Richard Holmes.” In said bond plaintiff bound himself to pay to the defendant the sum of $3.60 each month as monthly dues upon said stock, and also the sum of $3 each month as monthly interest at the rate of six per cent per annum upon said $600, and $3 as monthly premium upon said shares of stock. By the terms of the mortgage bond the six shares of stock were pledged for the payment of the sum borrowed.
On the 22nd day of December plaintiff and his wife executed the deed of trust mentioned to secure the payment of said principal sum of $600 loaned on said six shares of capital stock, and the payment monthly of $3.60 as dues, on said stock, $3 as interest on the money loaned, and $3 as premium.
The plaintiff alleges that he was compelled to execute said mortgage bond and said deed of trust to defendant ; that he has been compelled to pay on said bond the sum of $3.60 as dues, $3 as interest, $3 as premium monthly as provided therein; and that he has made ninety monthly payments, which aggregate the sum of $864.00, a sum more than sufficient to discharge said sum of $600.00 borrowed and the accumulation of'the legal rate of interest thereon. The record does not fur
The plaintiff introduced evidence tending to prove, that it was represented to him by defendant’s local agent and its secretary, that the monthly payments made by him was only six per cent per annum on the principal sum, and the loan would be discharged in ninety months. He testified that he had no knowledge that any stock had been issued to him by the association at any time until this controversy arose. It appears among other things that the six shares of stock were issued to plaintiff but retained by defendant as required by statute, and that the secretary handed him the old by-laws of the association on which was written across the face in red ink “amended June 22, 1895.” The plaintiff says that he was unable to compute the interest and the payment himself but he does not state or make any further explanation in that respect. He does not claim that the defendant’s agents practised any fraud to deceive him but. merely makes a statement of the transaction as he understood it.
Under this state of facts the plaintiff claims that the transaction was an ordinary loan. To support which much reliance is placed upon the case of the defendant Association v. Forter, by the Supreme Court of Kansas, 76 Pac. 484; where the court in passing upon a similar loan in which the circumstances were much like the ones in this case, held that, the loan was an ordinary one without reference to the question whether the association was acting under the amended act of June 21, 1895, or the previous statute regulating building and loan associations. The court in commenting on the facts treats the provisions in the mortgage bond and the deed of trust as of no significance and leaves them out of consideration in deciding the case. But
In passing upon the question we cannot ignore the recitations in the bond and the deed of trust to the effect that plaintiff Avas a shareholder in the association and that the bond itself pledged plaintiff’s shares of stock for the payment of the loan. These instruments were executed in the most formal manner and the recitations therein were clear and unequivocal and to hold that they Avere no part of the contract without any eAddence of fraud, mistake, or duress Avould be against every principle of construction and if such construction is to be folloAved it Avould effectively do away with the necessity of reducing contracts to Avriting and the . Statute of Frauds and Perjury Avould be a dead letter.
The question in the case is: Was the defendant association at the time it made the loan doing business under the amendatory act of June 21, 1895, or under the act that previously existed? If under the latter for Avant of competitive bidding as the statute there required the loan Avas an ordinary one and the monthly payments in excess of six per cent per annum Avere usurious and the plaintiff is entitled to relief as the payments he has made has discharged the debt with the legal rate of interest. [Clark v. Mo. Guar. Sav. and
The amendatory act of 1895 does not require competitive bidding and the premium and interest included in the bond are not usurious. At the time of the passage of the amendment the defendant was doing business under the law as it then existed. The amendment provides that any existing association heretofore organized by the laws of the State shall have the power to provide for future business under the provisions of the amendatory law by calling a meeting of its stockholders for that purpose. The notice of such meeting is to be given in the manner provided by its by-laws for special or annual meetings of stockholders for that purpose. It provides that the stockholders when assembled shall be empowered by a majority of those present to reorganize for the piirpose of conducting its future business under the law as amended. The defendant for the purpose of availing itself of the benefits of the amended law in the manner provided by its existing bylaws gave notice for a meeting of its stockholders to be held on the’22nd day of June, 1895. In pursuance of said notice certain of its stockholders appeared at the appointed time and by a majority of votes thereof decided to transact its future business under the law as so amended and passed the necessary resolutions and by-laws for that purpose.
It is the contention of the plaintiff as the notice of the meeting of the stockholders on June 22, 1895, was premature, the act not then being in force the reorganization proceedings were void. If the notice was premature the question arises whether for want of such notice the proceedings were invalid. The defendant contends that they were not. The solution of this question depends upon the proper construction of the language of the statute that the “notice of such meeting. shall be given.” If it was mandatory it is contended
In construing the word “shall” it is necessary to consider the purpose of the notice. Its object was to have a meeting of the stockholders to determine whether they would reorganize and do business in the future under the law as amended. If all the shareholders of the association had assembled, without any notice whatever and acted to reorganize under the law as amended, could it be said with reason that the purpose of the notice had not been fully accomplished? The essential object of the law was that the reorganization should not take place without the assent and concurrence of tbe stockholders. When that was obtained the purpose of the law was fulfilled. To hold -otherwise would be sticking to the letter of the language without regard to its evident meaning and intent. While in the construction of laws we are to be guided in most instances by certain general rules, it is not safe to wholly rely upon them in order to arrive at a correct result. The cardinal rule as announced in State v. Talty, supra, is that the intent of the Legislature is to be derived from the
It is true all the stockholders of the association were not present at the reorganization meeting, yet it appears that prior and up to the time this loan was made, a period of more than one year, the association was acting under the amendatory act. And it is presumed nothing to the contrary being shown, the stockholders assented to the change. [2 Cook on Corporations, sec. 590.] The defendant became a member of the association when he applied for the loan. He is therefore estopped from denying, the validity of the law providing for its reorganization. [Collins v. Cobb (Ill.), 66 N. E. 1079; Newcombe v. Reed, 94 Mass. 362.] Where the powers conferred by a charter “have been assumed by the person by whom it was intended, they should be enjoyed.” [1 Thompson’s Com. on Law of Cor., sec. 227; Walworth v. Brackett, 98 Mass. 98.] On one proposition we are assured, viz.: that a member who has incurred an obligation to his corporation, cannot plead as a defense to its enforcement, the invalidity of its organization. That is a right reserved to the State.
In addition to what has been said we are of the opinion that the notice was in compliance with the requirements of the statute. It was given as the statute directed it should be under certain by-laws then in force. The fact that it was given before the act went into effect would not invalidate it.
It follows that the action' of the court in adjudging that the note in question had been paid and that the deed of trust be satisfied and the property described therein be discharged of the lien, was erroneous, and the same is reversed and held for naught, and that the cause be reversed with directions to the court to ascertain the