Floyd v. National Loan & Investment Co.
| Decision Date | 23 March 1901 |
| Citation | 38 S.E. 653,49 W.Va. 327 |
| Parties | FLOYD et al. v. NATIONAL LOAN & INVESTMENT CO. et al. |
| Court | West Virginia Supreme Court |
Syllabus by the Court.
1. So far as it conflicts with the provisions of section 30 of chapter 54 of the Code of 1899, the general law of comity, as affecting the rights of foreign corporations, has been repealed in this state.
2. By virtue of the second clause of said section, providing that "such corporation so complying shall have the same rights, powers and privileges, and be subject to the same regulations, restrictions and liabilities, that are conferred and imposed by this and the 52d and 53d chapters of this Code, and of chapter 20 of the Acts of 1885, on corporations chartered under the laws of this state," foreign corporations, upon complying with the conditions required by said section, have the same rights, powers, and privileges respecting their contracts and remedies, if not otherwise repugnant to the policy of the state, as domestic corporations of like character, whether, under the general law of comity, they would have had such rights, powers, and privileges or not, but they can exercise no greater powers in this state than its domestic corporations.
3. A foreign corporation, coming into this state to transact business, must conform to the law of this state, if there be any, regulating similar corporations organized under the laws of this state; and its contract, although in terms solvable in the foreign state in which such corporation has its domicile, must be such a contract as a similar domestic corporation is authorized to make, or the courts of this state cannot enforce, or permit the enforcement of, its performance.
4. A domestic building and loan association may fix a minimum premium to be deducted in advance or paid in periodical installments, but in either case such premium must be a certain, definite sum, fixed and determined at the time of the making of the loan, and the contract of a foreign building association, made with a citizen of this state secured by a deed of trust upon real estate situated in this state, and by its terms to be performed in the domiciliary state, must conform to this requirement; and, if it does not such contract is not within the exemption from the operation of the usury laws given by our statute to domestic building and loan associations, and in such case only the principal of the loan, with legal interest, thereon together with such sums as have been necessarily expended in preserving, the property, less the amounts paid into the association by the borrower as dues, interest, premium, and fines, to be treated in the settlements as partial payments can be collected, and a sale under the deed of trust will be enjoined until the amount thus due is settled, unless the basis of settlement herein laid down be conceded by the association in proceeding to sell.
Appeal from circuit court, Kanawha county; F. A. Guthrie, Judge.
Bill by Clara J. Floyd and John B. Floyd against the National Loan & Investment Company and B. H. Oxley. Decree for defendants, and plaintiffs appeal. Reversed.
J. W. Kennedy, for appellants.
Brown, Jackson & Knight, for appellees.
On the 1st day of September, 1894, the plaintiffs, by their deed of trust, conveyed to the defendant B. H. Oxley, trustee, certain real estate, situated in the city of Charleston, Kanawha county, in trust to secure to the National Loan & Investment Company of Detroit, Mich., the payment of $2,500, according to the conditions of a certain bond bearing even date therewith, executed by the plaintiff to said company for the loan of said sum of $2,500 by it made to them, and to secure the repayment of any and all sums said company might pay for taxes, insurance, and maintaining the property in repair, in case of the failure of the plaintiffs to make such necessary payments, and to secure the strict performance of all the obligations incumbent upon the said Clara J. Floyd as a shareholder in, and borrower from, said company under its charter, by-laws, rules, and regulations then existing, or which might thereafter lawfully be made, altered, or amended. It is recited in this deed that said Clara J. Floyd is the owner of 25 shares of stock in said company, and has borrowed of it, pursuant to its bylaws, the money thereby secured, and by said deed she covenants and agrees to all things required of her to be done by the by-laws of said company as a shareholder and as a borrower, and to pay to said company the sum of $1.45 per share per month on her stock and loan, that being, as stated, stock, interest, and premium; also to pay all fines that should be legally assessed against her, such payments to be made until the stock owned by her should mature under said by-laws, and, when it shall have matured or reached the value of $100 per share, said stock to be surrendered and canceled, and thereupon the deed to be void, and the property thereby granted to be released. Said deed provided that, in case of default, said trustee, upon the request of the company, should make sale of the property upon the following terms: "(a) For cash in a sum sufficient to pay (1) the costs of executing this trust, the same to include a commission to said trustee of five per centum upon the gross amount of said sale; and (2) the whole amount then due to said third party, according to the terms of this deed, the bond herein mentioned, and the by-laws and regulations of said company; (b) and the residue, if any there be, upon such terms as the said trustee or his successor may deem best." And it was further expressly agreed therein that in case said trustee should sell said premises as provided in said deed, by reason of the default of said parties of the first part in computing the amount due said party of the third part, said first parties should be considered and treated the same as a borrowing member of said company. It was also covenanted and agreed in said deed that all payments therein mentioned should be made at said company's office in the city of Detroit, Mich., that being the place where the contract therein set forth and the bond therein referred to were made; that the bond and instrument given to secure the payments mentioned in the bond shall in all cases be construed as under and in accordance with the laws of the state of Michigan, and the articles of incorporation and by-laws of said association, any provision whatsoever in the laws of any other state to the contrary notwithstanding; and that any provision in the laws of any other state at variance with the laws of the state of Michigan, either on the subject of interest, premium, or any other matter, is expressly waived,--it being mutually intended by the parties thereto to make the contract in all things as a contract under and in accordance with the laws of the state of Michigan.
Upon her obligations thus contracted, Mrs. Floyd made 16 payments of which the first was in September, 1894, and the last in December, 1896, amounting in all to $618.22, of which $120 was dues on stock, $220 interest on the loan, $240 premium, and $38.22 fines for failures to pay. She having ceased to make payments, the trustee advertised the property for sale for cash in a sum sufficient to pay the costs of executing the trust, including 5 per cent. commission to the trustee upon the gross proceeds of the sale, and the whole amount due said company, $3,022.20, as of the 19th of July, 1897, and the residue to be paid in two equal installments, of one and two years, and fixing August 21, 1897, as the day of sale. On the 17th day of August, 1897, the plaintiffs filed their bill of complaint in the cause in the circuit court of Kanawha county, setting forth substantially the foregoing facts, and alleging that said transaction was, in substance and in fact, a simple loan only, and was put in the form in which it was made under the requirement of the defendant company as a shift and device on its part to avoid the usury laws of the state; that the balance claimed to be due by the defendant on account of said loan is about $600 more than under the laws of this state it is entitled to on account of said loan, it being greatly in excess of the principal advanced, with 6 per cent. per annum interest; that defendant company is entitled only to the balance due on account of said loan, computed upon the principal advanced, with 6 per cent. interest, allowing as credits the monthly payments, upon the principle of partial payments; that by reason of the covenants and provisions of the deed of trust, for breaches of which authority could not be vested in the trustee to fix the damages, it could not be executed in pais, and, though in form a conveyance to a trustee, it is in fact and law nothing but a mortgage, and can be executed and enforced only by judicial decision in a court of equity; that the terms of sale specified in the trust deed and notice of sale are not such as the law requires in such case, and a sale thereunder would be improper, erroneous, and illegal, and greatly to the prejudice of the plaintiff's rights; that said company has no authority, under the laws of this state or the state of Michigan, to make the loan in the manner and form in which it was made, as thereinbefore alleged, the sole object for which said association was formed, and the only legal authority vested in it, being to afford its members a safe and comfortable investment for their savings, and aid them in the purchase and improvement of real estate, and the building and improving of homesteads; that less than nine persons having formed said company, the number required by the laws of this state, it was without authority to make said loan; and that the amount claimed by said...
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