16 Pa. Super. 311 | Pa. Super. Ct. | 1901
Opinion by
The learned judge of the court below directed a verdict for the plaintiff, subject to the opinion of the court upon two questions of law reserved: “ 1. Whether the association, when the stock was canceled, was bound to give the mortgagee credit for the withdrawal value, including profits, or only credit for the amount actually paid in. 2. Whether the association had the right, as against the right of the assignee of the stock, to apply the entire value of the stock to the payment of the mortgage to the benefit of the second mortgage, to the amount of $174.51.” It was agreed by counsel that the court might mold the verdict
The first question reserved seems to be immaterial to the determination of the question at issue between the present parties, unless the second question should be determined in favor of the plaintiff. If the association had the right to appropriate the value of the stock to the reduction of the debt, then, it being admitted that the value of the stock was in any event less than the debt, it is manifest that the stock was extinguished and the plaintiff could take nothing. In that case any increase in the value of the stock over and above the amount which, was admitted by the association must, necessarily, inure to the benefit of the holder of the second mortgage, by reducing the amount which the association was entitled to claim out of the fund then in court for distribution. The equitable plaintiff took his assignment of stock from the legal plaintiff, subject to the assignment to the building association, about the time that default was made in the payment of the interest and dues on the loan, and long after the rights of the second mortgagee had accrued. Let it be conceded that the association had the right to apply
Did the association have the right “ as against the interests of the assignee of the stock, to apply the entire value of the stock to the payment of the mortgage to the benefit of the second mortgage ? ” This is the second question reserved, and upon its determination the rights of the parties depend. It is well settled that payments of instalments upon the stock are not ipso facto payments upon the loan secured by the mortgage for which the shares are assigned as a collateral security. It is true the mortgagor may apply his payments on the stock to the mortgage debt, a license to do so being implied in the nature of the relation between building and loan associations and their shareholders. The building association may also make such application, by virtue of the assignment of the stock as a collateral security for 'the loan. In order to effectuate such an application an act of appropriation by one or other of the parties is required. Strangers to the transaction can require nothing which one or other of the parties did not. In the present case we do not have to deal with the rights of a creditor of the borrower, who has attached the stock, caused it to be sold at sheriff’s sale, and himself become the purchaser, and then tendered to the association the full amount of its claim and demanded a transfer of the mortgage. This equitable plaintiff made no such offer. The defendant association, by a resolution in proper form, applied the shares of stock of Paul D. Johnson in part payment of the amount due on his loan. This was a definite application of the shares to the payment of the debt, and that the association had the right to make such application is well settled by authority: Spring Garden Assn. v. Tradesmen’s Loan Assn., 46 Pa. 498; North American Building Assn.
The judgment is reversed and judgment is now entered in favor of the defendant, non obstante veredicto.