Farmers' & Mechanics' Sav. Co. v. Bazore

• Decision Date: 09 December 1899
• Citation: 54 S.W. 339
• Parties: FARMERS' & MECHANICS' SAV. CO. et al. v. BAZORE et al.
• Court: Arkansas Supreme Court

54 S.W. 339

FARMERS' & MECHANICS' SAV. CO. et al. v. BAZORE et al.

Supreme Court of Arkansas.

December 9, 1899.

Appeal from circuit court, Boone county, in chancery; Brice B. Hudgins, Judge.

Suit by Bazore & Wilson against the Farmers' & Mechanics' Savings Company and others. From a decree for plaintiffs, defendants appeal. Reversed.

The appellees executed to the appellants their promissory note, which reads as follows: "Springfield, Mo., Sept. 20th, 1894. Six months after date, I promise to pay the Farmers' and Mechanics' Savings Company of Springfield, Mo., $2,500, for value received, with interest from date at the rate of six per cent. per annum, payable in monthly installments, on the fourth Saturday of each month; and I promise to pay said company sixty monthly dues of $50 every month, as stockholder in said company, upon fifty shares of stock, which I agree to carry until the loan is fully paid, with all the penalties of said stock, according to the by-laws and prospectus of said company. I further agree to pay said company the sum of $25 every month from [for] sixty months, being the premium for this loan. [Signed] T. E. Wilson. Mary E. Wilson. A. D. Bazore. Mary A. Bazore." At the same time they executed to C. E. Boyden, as trustee, their deed of trust upon lands in Boone county, Ark., to secure the payment of said note. The appellees brought their bill in equity to cancel said deed, alleging that said note and deed were usurious and void, and stating that the said contract was executed in Boone county, Ark.; that they had paid on the principal sum, of $2,500, $600, as dues on stock in said company, and $388.75, interest and premium; and that the sum of $1,900 is now due and owing on said $2,500 principal. They charge that the company corruptly charged and demanded and exacted more than 10 per cent. per annum, and that said deed of trust was a cloud upon their title to the lands conveyed, and prayed that the deed of trust and note be canceled, and that they have judgment for costs. The defendants denied that the contract was usurious, and denied all allegations and charges of the complaint, and said that said contract was not executed in Boone county, Ark., but that, on the contrary, it was executed in the state of Missouri. They then, for further defense, filed a cross bill, in which they state: "Before plaintiffs could borrow from defendant corporation the said plaintiffs T. E. Wilson and A. D. Bazore were compelled to become, and did become, stockholders in defendants' company. And defendants say that said plaintiffs on the 1st day of September, 1894, subscribed for fifty shares of stock of said company, with a view of borrowing from said company, and as a part of said transaction of said loan. Defendants say that 25 shares of stock were taken, upon which to borrow the sum of $2,500, as required by the by-laws of said company, and the other twenty-five shares were taken by said defendants as investment stock. Defendants say that by the terms of said subscription, and by-laws of said company, the said plaintiffs agreed and promised to pay, and to become obligated to pay, as monthly dues on said stock, on the 4th Saturday of every month, for a period of sixty months, the sum of $50, being $1 per month for each share. Defendants further say that, having so subscribed for said stock, the said plaintiffs filed with the board of directors of said corporation, at Springfield, Mo., their written application for the loan of $2,500, payable sixty months after date; that said application for a loan was acted upon, approved and accepted by the said defendant company, at Springfield, Mo., by and through a vote of its board of directors; that thereupon the said plaintiffs delivered to the defendant corporation, at Springfield, Mo., the promissory note in said petition described, and delivered to defendant corporation and C. E. Boyden, at Springfield, Mo., the deed of trust in said petition described, and said note and said deed of trust were by said corporation and trustee accepted and received at Springfield, Mo. And defendants say that the said sum of $2,500 was by said corporation paid to said plaintiffs at Springfield, Mo., and the same was by them there and then accepted and received. Further answering, the defendants say that by the terms of said contract, note, and deed of trust, the said principal sum was due and payable 60 months after date, and the said plaintiffs had obligated themselves to pay $50 each month upon said stock, and had agreed to pay interest on said sum at the rate of 6 per cent. per annum, payable monthly; that is to say, promised and agreed to pay, as interest, the sum of $12.50 per month for 60 consecutive months, and also promised and agreed to pay defendant the sum of $25 per month as a premium for said loan for a period of 60 consecutive months. Defendants say that no part of said principal sum was due and payable, except at the option of the plaintiffs, until the expiration of the 60 months, when at said period the value of said shares of stock are applied as a lump payment upon said debt, and the moneys so paid by the plaintiffs as dues, interest, and premium were used by defendant corporation, and used to enhance the value of the plaintiffs' stock. Defendants further say that for the months of September, October, November, and December, in 1894, the months of January, February, March, and April, in 1895, plaintiffs paid as dues on said fifty shares of stock the sum of $50 each month, and during the same period paid the sum of $100 as premium on said loan, and on July 10, 1895, executed and delivered their certain notes for the payment of $100 dues, $25 interest, $50 premium, and $5 fines, or a total of $180. Defendants say that on said July 10th plaintiffs withdrew 25 shares of their stock from their company, and the withdrawal value of said shares at said time was...