158 Mo. 613 | Mo. | 1900
This is a suit in equity for an ac-. counting as to the amount due on a deed of trust given by plaintiffs to defendant, and for a cancellation of the deed on paying the amount ascertained to be due. Defendant corporation is a building association organized under the laws of this State, and plaintiff L. Ruppel is a borrowing stockholder; his co-plaintiff is his wife, who according to the petition is the owner of the mortgaged land.'
It appears from the pleadings that in June, 1892, plaintiff L. Ruppel subscribed for $3,500 of stock in defendant company and .borrowed that amount from defendant, pledging
The answer admitted that plaintiff L. Ruppel became a stockholder to the amount named, borrowed the $3,500, and executed the obligation as set out in the petition, but denied that the loan was not made according to the requirements of the statute named, or that the $52.50 was merely the amount agreed to be paid monthly for one hundred months for the loan. Admitted that plaintiff had paid $17.50 monthly for
The answer then goes on to state in effect that when the loan was made the fund was- not in fact put up at public auction, because there were no bidders present, but the transaction was as follows: Plaintiff applied for the loan in writing, and in the application b'id so much for the preference ; the application was received and opened by the board of directors in -a regular meeting for such purpose; the plaintiff was not present and no one was present except the directors themselves; the plaintiff’s- bid was the only one' there, and thereupon -the board of directors declared it the highest and best bid and awarded the loan to him and that he accepted the money on those terms, and executed the papers in question. The answer dwells at much length on the circumstances to show that the transaction was a substantial compliance with the statute, and also that plaintiffs are estopped to question it. The answer also makes the point that if the transaction should be regarded as not in compliance with the statute as to putting the fund up to public auction, then it is still not usurious if the payments- -are spread, as by contract they were to be, over a term of one hundred months-, and that plaintiffs have no right to stop the payments at the end of 59 months and thus estimate it as usury.
The court, on motion of plaintiffs, struck out all that part of the answer -attempting to show a substantial though not a literal compliance with the statute and estoppel, and that the calculation should cover the whole period of a hundred months, to which defendant excepted.
The findings and decree were to the effect that the money was not put up at auction as the law requires; that the loaning of the money in the manner it was done was a mere device to evade the usury law; that plaintiffs had received in the loan $3,500 from defendant, had paid it $52.50 a month from June, 1892, to May, 1897, in all $3,097.50, had then offered to pay the full amount due; that plaintiffs were entitled to an accounting, and upon such accounting the court found that plaintiffs owed defendant $1,100 which at the trial they offered to pay in full satisfaction of their obligation, but that defendant had refused; it was therefore decreed that defendant proceed immediately to satisfy the mortgage of record, and if it was not done in ten days it should be adjudged satisified by the decree and be null and void, and it was further decreed that the defendant pay the costs of the suit. Erom that decree the defendant appeals.
The trial court in striking out that part of the answer adhered too closely to the letter of the statute. The correct interpretation is given this statute by our Kansas City Court of Appeals in Moore v. B. & L. Ass’n, 74 Mo. App. 468, and Price v. Empire L. Ass’n, 75 Mo. App. 551, viz.: that the funds of the association must be offered to the stockholders without restriction as to the premium, affording to each stockholder, entitled to borrow, the opportunity of borrowing at the lowest rate he can obtain in competition with other stockholders, and the board of directors have no right to fix a minimum rate of premium, or to regulate the premium by private contract with the borrower. In the first of those cases the association had adopted a by-law fixing a minimum rate of premium, and in the second, while there was no such by-law, yet the premium was- fixed by arbitrary demand of the board of directors. In the Moore cas-e the officers of the defendant company seem to have attached importance to the ceremony of public auction, and the secretary went through the form of crying the fund off and bidding it in for the borrower, whose written application -he held, but whose application wa-s in fact restricted in its bid by that by-law.’ The court, per Gill, J., said: “It is the merest trifling to contend that the plaintiff
But in the case at bar, if that portion of the answer stricken out is true, the empty ceremony was omitted, but the real bid of the plaintiff was there ini writing, and there is nothing in the evidence to justify the conclusion that the bid was constrained by any arbitrary action of the defendant. The plaintiff as a stockholder was entitled at that meeting to bid for the fund, and if his was the highest, or the only bid, he was entitled to have the loan awarded to him. He need not have been present, but it is sufficient that his written bid was there, and brought to the attention of the board of directors. [Springfield E. & T. Co. v. Donovan, 147 Mo. 622.]
In Miller v. Mo. G. S. & B. Ass’n (this defendant), 83 Mo. App. 669, the evidence went deeper into the facts than in the case at bar, and the trial court there found as a fact that the premium was fixed by arbitrary rule of the board of directors, and held the transaction to be in violation of the statute, and the ruling was upheld in the appellate court. But here the trial court cut off the inquiry into the matter by striking out that part of defendant’s answer, and the case rested on the testimony of Euppel that he was not present and did not personally bid in an open meeting and did not know who fixed the rate of premium. The court’s ruling on that point was erroneous. If the facts were as pleaded they constituted a complete defense to the plaintiffs’ suit.
II. But the court after finding that there was $1,100 due the defendant on the plaintiffs’ own theory and showing, decreed that the defendant’s security be canceled without .re
Courts of equity deal with the subject of tender on the broad principles of justice. When a plaintiff comes into court asking equitable relief, if the relief is granted it will be upon such terms as are just and equitable. Generally the
If, therefore, upon a retrial it should appear that the premium which the plaintiffs agreed to pay was fixed by the directors arbitrarily, or by private agreement only between the plaintiffs and defendant, and not in accordance with the statute, section 2812, Revised Statutes 1889, as hereinabove interpreted, and that therefore the transaction was usurious, the court should determine the amount lawfully due the defendant and decree the plaintiffs a cancellation of their mortgage upon condition that they pay the defendant the amount so found to be due. But unless under the law as herein ex
Tbe judgment is reversed, and tbe cause remanded, to be retried according to tbe law as herein laid down.