100 Ky. 295 | Ky. Ct. App. | 1896
delivered toe opinion of the court.
The New South Building and Loan Association was 'a Tennessee corporation, having its place of business at Cumberland Gap, Tennessee. In October, 1891, the appellant was, by the Chancery Court of Claiborne county, Tennessee, appointed Receiver of the business and property of the Company and qualified as. such. By decree in the cause in which appellant was appointed, entered in March 1892, the Corporation was dissolved upon the ground that it was insolvent, and its business was directed to be wound up and settled. It appears that all Stockholders in the company were either parties plaintiff or defendant in the cause.
By amended petition it was averred that the Company was a Tennessee Corporation having its principal place
By an agreement filed in the cause, it is established that the note and mortgage were executed at Lebanon,. Kentucky, but the note was payable in Tennessee, that the laws of Tennessee authorize and enforce contracts; for the payment of reasonable attorney’s fees in such cases, that appellee subscribed for his stock for the sole-purpose of securing a loan of a thousand dollars from the Company, and having secured it executed the note- and mortgage sued on, that at the time he secured the-loan it was estimated that his stock would mature and be worth par in seven years, at which time the Company would owe him fourteen hundred dollars on his stock,, which would cancel his loan and entitle him to four hundred dollars in cash; and that he contracted to pay eleven dollars and twenty cents per month on his stock, and the interest and premium on his loan until his pay-. rnents-, with the profits of the Company, should make' his stock worth par, whether this was for a longer or
The Circuit Court decreed a reformation of the note and mortgage as prayed for in the answer. This is immaterial, as there seems to be a general consensus of authority “that upon .premature dissolution of the association, the advanced members may be compelled to pay forthwith the balances due from them on their securities, although the latter be given in terms only for the payment of installments.” Endlich on Building Associations, 2nd. Ed. No. 523.
The Circuit Court gave judgment foreclosing the mortgage, allowing credits on the note not only for the amount paid as interest and premiums, but also for the amounts paid as dues on the stock. The judgment de nied the attorney’s fees prayed by appellant
Although appellee prayed a cross appeal, he appears in this court asking an affirmance. The appeal there
It was held in the case of Clark v. Tanner, ante, 275, that the general rule of comity giving effect to contracts beyond the limits of the State where made, does not embrace contracts like the one in question. Such contracts come within recognized exceptions to the general doctrine. Those exceptions, as said by Justice Martin in Whitson vs. Stodder, 8 Mart. (La.) 95 apply to cases in which the contract is immoral, or unjust, or in which the enforcing of it in a State would be injurious to the rights, the interest or convenience of such State or its citizens”. And as said by this court in Witherspoon vs. Musselman, 14 Bush 214, of such contracts for the payment of attorney’s fees: “They are agreements to pay penalties, tend to oppression of the debtor and to encourage litigation.” There was therefore no error by the lower court upon this point.
The second question is whether the sums paid as dues on stock subscriptions are proper credits upon the mortgage debt, or whether those payments should stand to his credit until time for final settlement, when all share holders, borrowers as well as non-borrowers, will be paid pro rata from the fund for distribution, it being conceded that the payments of interest and premiums
The Tennessee Court commenting upon the opinion quoted, said, “The reasoning of the court, as there given fully indicated the conclusion reached. To our minds It seems unanswerable. Without further discussion or elaboration, we are content to adopt and follow the decision of the Pennsylvania Court. Charge defendant with money actually received by him, treating same as
In this conclusion we fully concur.
Wherefore the judgment is affirmed on the cross appeal and reversed on the original appeal with directions-to enter a judgment in accordance with the principles-of this opinion.