Fitzgerald v. Hennepin Cnty. Catholic Bldg.

• Citation: 57 N.W. 1066,56 Minn. 424
• Court: Minnesota Supreme Court
• Decision Date: 05 February 1894
• Parties: FITZGERALD v. HENNEPIN COUNTY CATHOLIC BLDG. & LOAN ASS'N. KANNAIN v. SAME. CURTIN v. SAME. LYONS v. SAME.

56 Minn. 424

57 N.W. 1066

FITZGERALD

v.HENNEPIN COUNTY CATHOLIC BLDG. & LOAN ASS'N.¹

KANNAIN

v.SAME.

CURTIN

v.SAME.

LYONS

v.SAME.

Supreme Court of Minnesota.

Feb. 5, 1894.

(Syllabus by the Court.)

By-laws of defendant, fixing the terms on which a borrowing member may pay up the “loan” or “advance” before the maturity of his stock, construed.

Appeal from district court, Hennepin county; Henry G. Hicks, Judge.

Action by Maurice Fitzgerald against the Hennepin County Catholic Building & Loan Association to declare paid a certain mortgage held by defendant on plaintiff's property. There was judgment for plaintiff, and defendant appeals. Modified.

The case was heard on an agreed statement of facts, which are substantially as follows:

That plaintiff is now, and for more than 10 years last past has been, the owner in fee and in possession of a parcel of land in Hennepin county; that defendant is, and has been for more than 10 years, a corporation organized as a building and loan association under the laws of Minnesota.

“(4) That on the 16th day of August, 1883, the plaintiff purchased of defendant eight shares of the tenth series of capital stock of defendant, and paid therefor eight and 40-100 ($8.40) dollars at said time, as provided in said by-laws, and continued said payment of $8.40 per month, monthly upon each regular monthly meeting day of defendant, from and including August, 1883, up to and including September, 1892, amounting in all to $924.

“(5) That said tenth series of defendant's capital stock and said eight shares of said series were issued and dated on the 16th day of August, 1883.

“(6) That the face value of said stock, as fixed by its articles of incorporation, was $200 per share, amounting for said eight shares to $1,600.

“(7) That at the April, 1884, meeting of defendant, plaintiff made an application to defendant for a loan pursuant to said by-laws, bidding as a premium therefor the sum of $103.10 per share, making a total of $824.80 as premium, which sum was paid by plaintiff to defendant by deducting the same from $1,600, the face value of said stock, leaving a balance of $775.20, being the net amount of said loan, which balance of $775.20 was paid to plaintiff by defendant. That no other money was paid or loaned by defendant to plaintiff.

“(8) That on the 28th day of April, 1884, to secure said loan, plaintiff executed to defendant the bond and mortgage set forth in defendant's answer, which mortgage covered the lands hereinbefore described, and which mortgage was on the 29th day of April, 1884, recorded in the office of the register of deeds in and for said county of Hennepin in Book 117 of Mortgages, on page 7 thereof. That said bond and mortgage were made and given under and subject to the provisions of the said by-laws of defendant.

“(9) That from and including the May, 1884, meeting of defendant, up to and including the September, 1892, meeting of defendant, plaintiff paid to defendant monthly, on its regular monthly meeting day, as provided by said by-laws, the sum of $3.88 per month as interest upon the net amount of said loan of $775.20, amounting in all to $391.88, which is the entire amount of interest claimed to be due from plaintiff to defendant on defendant's meeting day of September, 1892.

“(10) That said payment of $3.88 per month was in addition to said payment of $8.40 per month, made as aforesaid. That the total amount paid by plaintiff to defendant is $1,315.88.

“(11) That in December, 1891, all the free stock of defendant's tenth series was paid off, retired, and canceled for less than its face value, to wit, $173.22, and no free stock remained in said series.

“(12) That at the October, 1892, meeting of defendant, plaintiff demanded a settlement of his said account with defendant, a release of his said mortgage, and the cancellation of his said bond, all of which was refused by defendant.”

Gallagher & Kinnane, for appellant.

T. E. Byrnes, for respondent.

MITCHELL, J.

As this case was submitted on the agreed statement of facts, which constitutes the findings of the court, the only question is whether the findings of fact justified the conclusions of law. There is nothing in plaintiff's contention that defendant is not a building society, and hence not authorized to take a premium for a preference or priority of loans. It is true that building associations are the creatures of statute. It is also true that title 2, c. 34, Gen. St. 1878, under which defendant was organized, does not define or outline the powers of building associations. But the general character and purposes of such associations have been so long a matter of common knowledge that the term “building society” has acquired a well-defined meaning. The statute referred to authorizes the formation of “building associations,” and also provides that any premium for preference or priority taken by any mutual building association for any loan of its funds shall not be deemed interest within the meaning of any law of this state, nor shall any excess of such premiums over any rate of interest permitted by the laws of this state be deemed or held to be usury. This clearly authorizes the formation of...