Gallettey v. Strickland

• Decision Date: 25 May 1906
• Citation: 54 S.E. 576,74 S.C. 394
• Parties: GALLETTEY v. STRICKLAND.
• Court: South Carolina Supreme Court

54 S.E. 576

74 S.C. 394

GALLETTEY v. STRICKLAND.

Supreme Court of South Carolina

May 25, 1906

Appeal from Common Pleas Circuit Court of Anderson County.

Action by George Gallettey, receiver of the Commercial Building & Loan Association, against A. C. Strickland. Decree for plaintiff, and defendant appeals. Reversed and remanded.

Quattlebaum & Cochrane, for appellant. Willcox & Willcox and George Gallettey, for respondent.

JONES J.

The plaintiff, as receiver of the Commercial Building & Loan Association, an insolvent Virginia corporation brought this action to foreclose a real estate mortgage executed by defendant to said association. The action resulted in a decree by Special Judge Frank B. Gray adjudging foreclosure for an amount to be ascertained by a reference to be governed by the principles announced in said decree. The defendant appeals upon numerous exceptions.

1. We notice, first, the question presented by the seventeenth exception, whether the failure of said foreign association to comply with the statutes in reference to foreign corporations doing buisness in this state rendered the contract in question null and void. It is conceded that the Commercial Building & Loan Association was incorporated under the laws of Virginia and did business in this state, but failed to file with the Secretary of State a written stipulation or declaration designating some place within the state as the principal place of business or location of said corporation in this state, failed to file, also, in the office of the Secretary of State, a copy of its charter and by-laws, and also any sworn statement by an officer of the corporation showing the residence of the corporation, the amount of the capital stock, and the names and residences of the president and secretary and board of directors, as required by sections 1780 and 1781 of the Civil Code of 1902. Section 1783 provides as a punishment for failure to file any such papers a liability to indictment, and upon conviction to a fine not exceeding $500, and prohibition from further carrying on business in this state until such fine is paid and the statute complied with. Such was the law in force on September 25, 1895, when the contract in question was made. We agree with the circuit court that the statutes in force at the time of the making of this contract do not nullify contracts with a foreign corporation before conviction. This case does not require us to consider the effect of the act of 1897, 22 St at Large, p. 484, embraced in section 1784 et seq., Civ. Code 1902.

2. The first, second, and third exceptions raise the controlling question in the case, viz., whether the contract in question was made with reference to the laws of Virginia or South Carolina. The circuit court held that the contract was a Virginia contract and to be construed under the laws of Virginia, and therefore, was not usurious, relying upon Association v. Rice, 68 S.C. 238, 47 S.E. 63, and Association v. Powell, 55 S.C. 320, 33 S.E. 855. The defendant became a stockholder of the Commercial Building & Loan Association on June 25, 1895, holding 15 shares of the par value of $100 each. On September 25, 1895, having paid three monthly installments as stock dues, etc., he made application to the association for a loan of $1,250, which was granted, and thereupon defendant executed his bond and mortgage securing the same. At the time of the execution of the bond and mortgage defendant resided at Anderson, S. C the papers were signed at Anderson, S. C., and delivered there to an agent of the association, and by him were forwarded to the office of the association at Richmond, Va. The mortgage was upon real property in the state. The loan was paid to defendant by check of the treasurer of the association, drawn at Richmond, Va., on a Richmond bank which check was delivered to defendant at Anderson, S.C. The application for the loan was addressed to the board of directors, home office, Richmond, Va., and, was approved by the appraisers of the local board at Anderson, S.C. The certificate of stock held by defendant and assigned to the association as additional security for the loan contains this recital: "This certificate is issued to and accepted by the holder upon the conditions named on the back thereof and the by-laws of the association," and among those conditions is the following: "All moneys due from stockholders to the association or due from association to stockholders shall be due and payable at the home office Richmond, Va." The bond was drawn payable to said association or its assigns, at Richmond, Va., and was conditioned for the payment of $21.50 monthly until the said stock shall mature and be fully paid up. This monthly installment consisted of stock dues, $9, interest on $1,250, ...