121 Iowa 38 | Iowa | 1903
The defendants Chapman and Murphy are, and at all times in question were, shareholders in the Interstate Building & Loan Association, organized and existing under the laws of the state of Illinois, and having its principal place of business at Bloomington, in that state. Each of said defendants has at all times resided in Guthrie county, this state. During the year 1892 said defendants each obtained a loan in the sum of $500 from said association, in evidence of which they executed and delivered the respective bonds upon which these actions are brought. By the terms thereof, the bonds are made payable in monthly installments as follows: $3.00 as dues on stock; $2.50 as monthly interest, and $2.92 as monthly premiums; all such payments to continue until the principal sum, with interest and premiums, shall have become liquidated by the shares of stock held by defendants having matured or reached their par value in accordance with the provisions of th'e charter and by-laws of said association. At the time of the execution and delivery of such bonds, and as security therefor, the defendants pledged their respective shares of stock, and executed and delivered the respective-mortgages in suit; each of such mortgages covering a separate tract of land in Guthrie county. It is conceded that both Chapman and Murphy continued to make their payments until June 6, 1898, when the said association, having become insolvent, was taken in charge by a receiver appointed therefor under proceedings brought for that purpose in the courts of the state of Illinois. On November 7, 1898, the receiver, having obtained authority from the court by which he was appointed, sold and transferred the bonds and securities in question to this plaintiff, E. O. Spinney.
Taking the situation as a whole, we are disposed to regard the obligations as now existing" against the defendants as perform able in Iowa, and that they are therefore to be construed and enforced according to the laws of this state. Counsel for appellant presents many very cogent reasons why the contracts of a building and loan association should be construed and enforced according to the law of the domicile of the association, and cite many authorities upon the subject. But as we think, there is no occasion to consider such in the disposition of the cases before us. While it may be true that the involved character of building and loan contracts, and the general interests of the contracting associations, require that such contracts shall be referable to the law of the domicile of such associations, to the end that certainty and uniformity may result, still it must be manifest that, as applied’to the mere matter of payment of a debt, sach doctrine ceases to have force of application when it is made to appear not only that the association is no longer a going .concern, but that all interest formerly held by it in the contract has been transferred over without recourse to a stranger. When a building and loan association becomes insolvent and passes into the hands of a receiver, the loan contracts made by it cease ipso facto, and by force of Jaw, to have many, if not all, the characteristics which differentiated them from Joan contracts in general form and use. Of necessity, the fact of insolvency works a radical change in
Accordingly we are disposed to hold that the rights of these parties are solvable under the rules adopted in this state; and, so holding, we have need only to add that defendants are entitled to have predited upon their respective loans the interest as paid, and the amount of the premiums paid as of the time paid. Upon the. balance, computing from the time when the receiver was appointed, the defendants are chargeable with interest at the rate of s>x per cent, per annum. They are also entitled to credit for the actual value, as such may be ascertained, of the shares of stock held by them. Hale v. Kline, 113 Iowa, 523; Spinney v. Miller, 114 Iowa, 210. As we have no sufficient data upon which to make computations, the causes will be remanded-to the district court for that purpose, and where such further proceedings may be had as provided for by law. — Reversed and remanded.