22 Kan. 624 | Kan. | 1879
The opinion of the court was delivered by
“$500. Paola, Kansas, February 4, 1873.
“Fifteen years after date, we promise to pay to the order of the Citizens’ Building and Savings Association of Paola, Kansas, five hundred dollars, for value received, with interest thereon at the rate of one-half of one per cent, per month, payable monthly on the first Tuesday of each and every month, at the office of the corporation, in Paola, Kansas. Appraisement waived. R. W. Massey.
Sallie E. Massey.”
To secure the payment of this note, the makers thereof, on Februaiy 6, 1873, executed to the payee thereof the mortgage now in suit, on certain land in Miami county, owned by said Sallie E. Massey. Whether this land was occupied as a homestead or not, is not shown. This mortgage, however, was not only a security for the payment of said promissory note, but it also contained stipulations making it a security for the payment of certain dues and fines, which R. W. Massey as a member of said Citizens’ Building and Savings Association, agreed to pay. It also contained a stipulation, that if any default should be made in the payment of said note or interest, or in the payment of said dues or fines for three months, or in the payment of taxes accruing against the land, or in keeping the premises insured, “then, in either of these cases, the whole of said sum mentioned in said note, together with the interest thereon, and the dues- and fines owing to said association, shall, and by this indenture does, immediately become due and payable.” The mortgage also contained a stipulation giving to the plaintiff an attorney-fee of $25, in case the mortgage had to be foreclosed.
The Citizens’ Building and Savings Association was a cor
The above-mentioned note and mortgage were given to secure a loan of $500, made by the association to said R. W. Massey, who was at the time a member of the association, he having bid the highest premium offered therefor. Subsequently he failed to pay his monthly dues, fines and interest, and the note and mortgage becoming due in accordance with the stipulations of the mortgage, suit was commenced thereon on August 11, 1875, in the district court of Miami county, by the association, against the makers of the note and mortgage, for the sum of $500, with interest thereon at the rate of one-half of one per cent, per month from February 2, 1875, and $2 per month for monthly dues for each and every month commencing with and including March, 1875, and $25 attorney’s fee for foreclosing said mortgage.
The defendants below filed separate answers to the plaintiff’s petition. R. W. Massey for his defenses alleged: First, that at the time the plaintiff below made the loan to him and took from the defendants their note and mortgage to secure its payment, only 157 shares of the 200 shares of capital stock were subscribed, and all the capital stock not having been subscribed, the plaintiff had no legal power or authority to transact business with the defendant, to make him a loan or to take his note and mortgage; second, that the loan was made in pursuance of a mutual agreement between the
The answer of Sallie E. Massey — First, denied that the plaintiff was duly and legally incorporated, denied that it ever had any legal or valid existence as a corporation; and, second, alleged that the capital stock of the plaintiff had not' been fully subscribed; that it had no legal authority to transact business or to take a mortgage to secure a present loan of money; and, third, that the whole object and intent of the corporation was and is .to evade the usury laws of the state; that R. W. Massey received only $240 on said note; that there was no valid consideration for the other $260 thereof, but that it was taken by the plaintiff in excess of the legal rate of interest; and that said R. W. Massey had paid on said note and mortgage the sum of $250.in full payment of the said $240, and that said defendants were not indebted to the plaintiff on said note and mortgage.
Neither of these answers was verified by affidavit, and' therefore the allegations of the petition, setting forth the exe- ’ eution of said note and mortgage, and the existence of said association as a corporation, were not put in issue. (Civil Code, §108; Comp. Laws of 1879, p. 616, and cases there cited.)
The replies of the plaintiff averred the organization of the corporation, and the opening of books for subscription to the capital stock; admitted that but 157 shares of said capital stock had been subscribed; averred its authority to transact business; that the note and mortgage were executed and delivered to plaintiff as a corporation; admitted that th*e defend-: ant, R. W. Massey, received only $220 from the plaintiff, and that the difference between said sum and the $500 mentioned in said note and mortgage, was a premium bid by said R. W. Massey, as a member of said association, for a priority of a
• The case was tried on change of venue by the district court of Shawnee county, without a jury, and judgment rendered in favor of the plaintiff for $550, for “principal, interest, dues and fines,” and for $25 for plaintiff’s attorney fee for foreclosing said mortgage, and for costs. The judgment is followed by the usual decree for foreclosure and sale of the mortgaged premises, without appraisement, as provided for in the note and mortgage.
There are four principal questions discussed by counsel, which we shall now proceed to consider, to wit:
1. Had the Citizens’ Building and Savings Association legal power or authority to transact business before the full amount of its capital stock, as fixed by its charter, was subscribed ?
: 2. Were the defendants, or either of them, estopped from denying the authority of the plaintiff to transact business as a corporation ?
3. If it had such authority, did it exceed its powers in making a loan to Sallie E. Massey, who was not a member of the corporation ?
4. Was the contract usurious?
But it is claimed that if Mrs. Massey signed the note as surety, the judgment should have been rendered against her, under § 470 of the civil code. (Gen. Stat. 720.) This question, however, was not raised in the court below, so far as appears from the record, and therefore it is not properly before this court for consideration. (Kelly v. Collins, 11 Ohio, 310.) Besides, a judgment rendered in a case like the present, under § 470 of the code, could apply only to the collection on execution of any remainder still due, after all the property specifically pledged for the payment of the debt had been exhausted. No execution to collect such remainder was ordered in this case, and it may be that such a thing is unnecessary.
It is claimed, however, that said share has not only been assigned, but has been forfeited, to the company, and therefore that no credit should be allowed for it. This, however, is not in accordance with the rules of equity that apply in such cases, where personal property has been pledged as a security for a debt. And this stock was pledged merely as a security for a debt. If A. borrow money from B., and give his note tberefor, with C. as his surety, who mortgages his property to secure A.’s debt, and at the same time A. delivers to B. his watch, as additional security, to be forfeited if default be made in the payment, can B. keep the watch, and recover from the makers of the note the full amount of the
The same questions being involved in the other two cases of this same title now pending in this court, and numbered respectively 1411 and 1412, the same judgment will be rendered.