86 F. 491 | U.S. Circuit Court for the District of Indiana | 1898
This is a suit for the foreclosure of a mortgage executed August 30, 1890, by Jesse M. Stucky and Virginia A., his wife, to the American Building, Loan & Investment Society, a corporation created and existing under and by virtue of the laws of the state of Illinois. The corporation became insolvent, and the plaintiff on February 8, 1894. was appointed by the circuit court of the United States for the Northern district of Illinois "the receiver thereof; and by the decree of that court he was duly authorized and empowered to sue upon any and all claims and demands clue or to become due to the society, to institute and prosecute foreclosure proceedings upon all mortgages and trust deeds held by it, and to wind up its affairs, and make distribution of its assets among those entitled to participate therein. On May 25, 1894, the plaintiff, on ancillary proceedings, was duly appointed receiver of the society by this court, with like powers. The charter and by-laws of the society provided that every person desiring to become a shareholder therein should pay a membership fee of $1 per share for each and every share taken by him. The shares were §100 each. It was provided that the society might loan to its shareholders all money paid into, and belonging to, its loan fund, and that the loan should be made upon satisfactory notes secured by mortgage on real estate. For every §100 of loan made to a shareholder,
The defendants have demurred to the complaint, and insist that, on the complainant’s own showing, the debt secured by the mortgage has been fully paid and satisfied. Their contention is that the sum of $506.25, paid as dues on the stock before the society was placed in the hands of the receiver, should be credited as a payment on the loan secured by the mortgage in suit, and that this sum, added to the other payments, which are admitted, is enough to satisfy and discharge the mortgage. All the authorities agree that on the premature abandonment of the enterprise, whether by voluntary dissolution, or by winding it up by judicial proceedings, the original contract between the society and the borrowing shareholders cannot be carried out, and that neither party is bound to its literal fulfillment.
Three views have been advanced in regard to the relative rights and obligations of the borrowing and the nonborrowing sharehold