Equitable Building & Loan Ass'n v. Corley

Citation52 S.E. 48,72 S.C. 404
PartiesEQUITABLE BUILDING & LOAN ASS'N v. CORLEY et al.
Decision Date07 October 1905
CourtSouth Carolina Supreme Court

Appeal from Common Pleas Circuit Court of Lexington County; Watts Judge.

Action by the Equitable Building & Loan Association against P. H Corley and the Roof & Barre Lumber Co. From circuit decree defendant appeals. Affirmed.

Efird & Dreher, for appellants. R. W. Shand, for respondent.

WOODS J.

The Equitable Building & Loan Association, a corporation having its principal place of business in Augusta, Ga., brings this action to foreclose a mortgage on land in Lexington county S. C., executed by the defendant Corley, a resident of South Carolina. The land was afterwards conveyed by Corley to Roof & Barre, and by them to the defendant Roof & Barre Lumber Company. The answer sets up the plea of payment. The first question arising under this plea is whether all sums paid to the Equitable Building & Loan Association by Corley and his grantees, after Corley made the mortgage and borrowed the money, should be credited on the sum borrowed and interest, or should be applied not only to that, but also to the expenses of the association and premiums, as provided by the bond.

We first consider this question as it effects the rights of Corley, the original mortgagee. If the contract is governed by the law of this state, as defendants contend, the former method of computation would be correct, and the bond and mortgage would be overpaid. Association v. Holland, 65 S.C. 448, 43 S.E. 978. The circuit judge, however, held the contract fell under the law of Georgia, and that by that law the bond was to be computed according to its terms, which included, not only the sum actually borrowed, with interest but the expenses and premiums for which Corley was liable as a borrowing member of the association. The following is the statute of Georgia under which the computation in the circuit decree was made: "Be it further enacted, that no fines, interest or premiums paid on loans in any building and loan association shall be deemed usurious, and the same may be collected as debts of like amount are now collected by the law in this state, and according to the terms and stipulations of the agreement between the association and the borrower." Laws Ga. 1890-91, vol. 1, p. 181, § 8. This statute was construed by the Supreme Court of Georgia, in Cook v. Equitable Building & Loan Association, 30 S.E. 911, and Burns v. Equitable Building & Loan Association, 33 S.E. 856. If the Georgia statute governs the contract, it is obvious from its terms, as construed by the Supreme Court of Georgia, that there was no error in the decree of the circuit court. The complaint alleges "that at Augusta, in Georgia, on August 3, 1895, the plaintiff advanced to the defendant Patrick H. Corley, on four shares of the stock of this plaintiff held by him, the sum of $400, and in consideration thereof the said Patrick H. Corley made, executed, and delivered to plaintiff his bond, dated August 3, 1895, in the penal sum of $800."" The pleadings and the bond and mortgage are silent as to the place of payment. The law of the place where the contract is made governs as to its construction and the obligations which arise from it, where it does not provide for the application of the law of a different place and makes no mention of the place of payment. 9 Cyc. 668; Touro v. Cassin, 1 Nott. & McC 173, 9 Am. Dec. 680; Pegram v. Williams, 4 Rich. Law, 219. Here it is not only admitted the contract was made in Georgia, but also that by the bond the parties expressly contracted "that this obligation is a Georgia contract, and in all respects subject to and governed by the laws of Georgia." The law applicable to such an agreement is so well and accurately stated by Scates, C.J., in McAllister v. Smith, 17 Ill. 328, 65 Am. Dec. 651, 654, that we quote at some length from his opinion, though it would be sufficient to refer to our own cases of Thornton v. Dean, 19 S.C. 583, 45 Am. Rep. 796, Association v. Hoffman, 50 S.C. 303, 27 S.E. 692, and Association v. Rice, 68 S.C. 236, 47 S.E. 63: "The contracts were made in this state, and the laws of this state would, had the parties been silent, have become part of the contracts for the construction and meaning of the...

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