Winget v. Quincy Bldg. & Homestead Ass'n

• Decision Date: 05 April 1889
• Parties: WINGET et al. v. QUINCY BUILDING & HOMESTEAD ASS'N et al.
• Court: Illinois Supreme Court

128 Ill. 67

21 N.E. 12

WINGET et al.

v.QUINCY BUILDING & HOMESTEAD ASS'N et al.

Supreme Court of Illinois.

April 5, 1889.

Appeal from appellate court, Third district.

Bill for injunction by Warren C. Winget and Sarah M. Winget, his wife, against the Quincy Building & Homestead Association, of Quincy, Ill., and William S. Flack, trustee. A decree for complainants was reversed on appeal to the appellate court, and complainants appeal to this court.

George W. Fogg, for appellants.

Emmons & Wells, for appellees.

BAILEY, J.

This was a bill in chancery, brought by Warren C. Winget and Sarah M. Winget, his wife, against the Quincy Building & Homestead Association and William S. Flack, surviving trustee, to enjoin the sale of certain premises under the powers of sale contained in two deeds of trust executed by the complainants. The Quincy Building & Homestead Association is a corporation organized under the provisions of the ‘Act to enable associations of persons to become a body corporate to raise funds to be loaned only among their members,’ approved April 4, 1872. Said act, after prescribing the mode in which corporations might be organized for the purposes therein specified, provided, among other things not material here, that such corporations should make no loans except to their own members; that their shares of stock should be for $100 each, and that subscriptions therefor should be made payable to the corporation at such time or times as should be provided by the charter and bylaws, but that no periodical payment should exceed $2 on each share; that every share of stock should be subject to a lien for the payment of unpaid installments, and other charges incurred thereon under the provisions of the charter and by-laws, and that the by-laws might prescribe the form and manner of enforcing such lien; that new shares of stock might be issued in lieu of the shares withdrawn or forfeited, and that the stock might be issued in one or in successive series, in such amount as the board of directors might determine; that any shareholder wishing to withdraw from the corporation should have power to do so by giving 30 days' notice of his intention so to do, and that he should be entitled to receive the amount paid by him, and such interest thereon as the by-laws might determine, less all fines and other charges, but that no stockholder should be entitled to withdraw whose stock was held in pledge for security. It was further provided that the money in the treasury, if over $100, should be offered for loan in open meeting, at the meetings of the board of directors, and that the stockholder who should bid the highest premium for the preference or priority of loan should be entitled to receive a loan of $100 for each share of stock held by him, and that good and ample security should be given by the borrower for the repayment of the loan; that, in case of non-payment of installments of interest by a borrowing stockholder for the space of six months, payment of principal and interest, without deducting the premium paid or interest thereon, might be enforced by proceeding against the securities according to law; that a borrower might repay a loan at any time, and, in case of such repayment before the expiration of the eighth year after the organization of the corporation, there should be refunded to him one-eighth of the premium paid for every year of said eight years then unexpired. It was also provided that no premium, fines, or interest on such premium that might accrue to the corporation according to the provisions of said act should be deemed usurious, and that the same might be collected as any other debts of like amount might be collected by law in this state.¹ Laws 1872, p. 173.

The Quincy Building Association was organized in April, 1874; its object, as declared by its charter, being the accumulation of a fund by monthly contributions, fines, premium on loans, and interest on investments, sufficient to anable the stockholders to build or purchase for themselves dwelling-houses, or improve real estate, or make such other investments as they might deem advantageous. A charter and by-laws were adopted, in pursuance of which the stock of the corporation was divided into series, that issued for each year constituting a separate series; and it was further provided by the charter and by-laws that each stockholder, at the time of subscribing for stock, should sign his name to the charter, and that no member should own more than 50 shares in his own right; that the stock should be paid for in monthly installments of 50 cents per share; and that, in default of payment of an installment at maturity, the stockholder should pay a fine of 10 cents on a dollar or fraction of a dollar remaining unpaid; and that if the default in the payment of installments should continue six months, the stock should be forfeited, and the stockholder be entitled to receive the amount of installments previously paid in, after the deduction of all fines, and without the allowance of any interest; and that the payment of installments should continue until, with accumulated profits, the stock belonging to the series should be worth $100 per share. It was also provided that each stockholder should be entitled to receive, for each share of stock held by him, a loan of not more than $100, such loan to be disposed of to the highest bidder for priority of right, in open meeting, at stated meetings of the board of directors, interest to be paid at the rate of one-half per cent. per month on the entire loan, including the premium; that the repayment of such loan should be secured by bond and mortgage on real estate, clear of incumbrance, and that every share of stock upon which a loan should be effected should be transferred to the association as collateral security; that any stockholder might withdraw from the association upon giving 30 days' notice of his intention so to do, and that he should then be entitled to receive the amount paid in by him, and 6 per cent. interest thereon, less all fines and other charges, but that no stockholder should be entitled to withdraw whose stock was held in pledge for security; that when the shares of stock of any series, upon which a loan should have been granted, should reach the matured value of $100 each, the amount or value of such stock should be credited to the account of the borrower owning the same, and that the loan should be declared to be fully paid and satisfied, and the stock canceled.

On and for some time prior to the 3d day of May, 1876, the complainants were the owners, as tenants in common, of a certain lot of land in the city of Quincy, with certain buildings thereon, and claimed by them as their homestead. Complainant Warren C. Winget was desirous of obtaining a loan of money from said association on the security of said lot, and, in order to become a stockholder so as to be qualified to apply for such loan, be purchased and procured an assignment to himself from another stockholder of 16 shares of stock of the second series, upon which installments to the amount of $88 had been paid. The certificate of stock thus purchased was surrendered to the association, and a new certificate for 16 shares was issued by the association to him. Winget thereupon made an application in writing to the association for a loan, and appeared at a stated meeting of the board of directors, and became a bidder for priority of right. His bid, which was 38 per cent. premium, was successful, and he thereby became entitled to a loan of $1,600, less the premium bid, being the net sum of $992. The association thereupon paid over to him said sum of $992, and he assigned to the association his 16 shares of stock as collateral security for said loan, and also executed his promissory note, bearing date May 3, 1876, by which he promised to pay to the association said sum of $1,600, 8 years after date, with interest at the rate of one-half per cent. per month, payable monthly, and also all monthly dues and fines on his 16 shares of the capital stock of the association-his wife signing the note with him, as his surety. To secure said note, said Winget and wife, on the same day, executed a deed of trust, by which they conveyed said lot to Rufus L. Miller, as trustee, and to William S. Flack, has successor in trust, with power of sale in case of default for six months in the payment of the moneys mentioned in said promissory note or any portion thereof. At the time of making the loan the association delivered to Winget a pass-book, in which it afterwards entered credits for all moneys paid by Winget as such payments were made, and which contained a printed copy of the charter and by-laws of the association. This pass-book remained in his possession down to the commencement of this suit.

On the 6th day of November, 1878, Winget, desiring to obtain a further loan on the same property, subscribed for four shares of stock of the fifth series, and became a successful bidder for a priority at 31 per cent. premium, and received from the association the net sum of $276, and assigned to the association, as collateral security for said loan, said four shares of stock, and executed to the association his note for $400, of like tenor with his former note, his wife also signing it as surety, and both joined in executing a second deed of trust on said lot to the same trustees, with like power of sale. Winget, though frequently in default so as to subject himself to the payment of fines, paid the installments on both certificates of stock, the interest on both notes, and the several fines incurred, down to February, 1882. The amounts paid by him on account of the first loan were as follows, viz.: Installments on the 16 shares of stock, $640; interest on the $1,600 note, $560; and fines, $62.40. The amounts paid on account of the second loan were as follows, viz.: Installments on the four shares of stock, $88; interest on the $400...