58 P. 798 | Kan. Ct. App. | 1899
Lead Opinion
The opinion of the court was delivered by
This action was instituted by the plaintiff in error as plaintiff below against John W. Kidder and wife for the recovery of the amount due upon a bond or note, and for the foreclosure of a real-estate mortgage. A trial was had before the court without a jury'; the court made special findings of fact and conclusions of law, and rendered judgment for the amount due, after applying all payments to the satisfaction of the amount of the principal and interest due upon the amount of money actually received from the association. The court, in effect, held that the purchase of the association’s stock and the loan of money were one contract, constituting the relation of lender and borrower between the parties, and applied all payments accordingly. The plaintiff excepted to the findings and judgment of the court and presents the case to this court for review.
The principal facts, as shown by the record and findings of the court, are as follows : The People’s Building, Loan and Savings Association is a corporation organized and doing business under the laws of New York. The defendants Kidder are residents of the state of Kansas. On the 16th day of May, 1891, John W. Kidder made application, in writing, to purchase of the plaintiff twenty shares of its capital stock,
The application for the purchase of stock and that for the loan were made at the same time ; the loan was not actually made, however, until some months later. September 9, 1891, Kidder executed and delivered to the association his bond or note for the amount, secured by mortgage upon real estate, described as lots 277 and 278, in the original town of Scandia, Republic county, Kansas, and as additional security he assigned his shares of stock in writing, as follows :
“In consideration of the sum of $1600, loaned to me by the People’s Building, Loan and Savings Association, of Geneva, N. Y., on a certain indenture bearing date the 9th day of September, 1891,1 hereby assign, transfer and set over unto E. A. Walton, treasurer of said association, all my right, title and interest in my certificate of shares No. 01374, as collateral security to said loan, it being understood and agreed that the amount, of the within-named shares at maturity shall be applied toward the payment of the mortgage debt then due.”
On November 10, 1891, the plaintiff forwarded to the defendant the sum of $1411.34, being the sum of $1600, less $160 retained as a bonus for making the loan, $26.66 interest accrued, and the sum of $2 as a fine imposed for delinquency in making payment as
The plaintiff and defendants concede that the court made some error in computation of the amount due, by which plaintiff was not given so large a judgment as it was entitled to under the findings of the court, but as both parties agree that this matter will be corrected by mutual consent, we have given it no atten-. tion whatever.
The questions presented by the assignment of error and the record are whether the court erred (1) in holding that the contracts are usurious; (2) in holding that the contracts should be construed by the laws of the state of Kansas with reference to usury; and (3) in applying all of the payments made upon the mortgage indebtedness with interest thereon.
The contract for the purchase of stock and for the loan of money was made by correspondence between Kidder, in the state of Kansas, and the association, in New York ; the place of performance as fixed was at the office of the association in the latter state. This
“All payments of money or property made by way of usurious interest or of inducement to contract for more than ten per cent, per annum, whether made in advance or not, shall be deemed and taken to be payments made on account of the principal and ten per cent, per annum, and the courts shall render judgment for no greater sum than the balance found due after deducting the payments of money or property made as aforesaid. . . .’’
This is an express inhibition on the power of the court to enforce a contract for any rate of interest in excess of that prescribed by our statute. The bond was for the payment of $1600 ; the defendant received
Taking this view of the matter, many of the elements of uncertainty and confusion are eliminated. The association had nothing in view except the loaning of money and the collection of interest, under the various names of bonus, penalty, contribution of interest, contribution of premium, contribution to loan fund, and contribution to expense fund, nor had Kidder anything in view except to borrow money and repay the same with interest. We do not doubt that this contract is in harmony with the laws of New York, nor have we any objection to such association enforcing such contract in that state. It seems, however, that while the association desires to claim all the benefits of a New York contract as an abstract proposition, it desires the courts of this state to enforce the same as a Kansas contract, for the purpose of enabling it to secure the foreclosure of its lien upon Kansas soil for
There was but one contract, that for the loan of money with interest; there was but one relation be
The judgment must be affirmed.
Dissenting Opinion
(dissenting) : I do not think the law is correctly stated in the foregoing opinion. It does not seem to me that the statement “in the foreclosure of a real-estate mortgage, the usury law of the state in which the land is situated will govern,” is sustained either by the weight of authority or by reason. In Kurtz v. Sponable, 6 Kan. 397, the supreme court held : “Under our law the mortgage is but appurtenant to the debt. ’' In the American and English Encyclopedia of Law, volume 27, page 974, it says: “The fact that a contract made and to be performed in one state is secured by a mortgage upon land in another does not affect the rule that the lex loci contractus governs ; the security is a mere incident.”
Nor do I think all the payments enumerated should be held as payments upon the mortgage indebtedness. Any payment made by a member of the corporation under the laws thereof, having exclusive reference to and intended for the purpose of securing or enhancing the value of the capital stock, is in no sense a payment upon the debt, except as it tends to create a fund from'which the debt may be ultimately paid.