Granite State Provident Ass'n v. Monk

• Decision Date: 03 January 1895
• Citation: 30 A. 872
• Parties: GRANITE STATE PROVIDENT ASS'N v. MONK et al.
• Court: New Jersey Court of Chancery

30 A. 872

GRANITE STATE PROVIDENT ASS'N

v. MONK et al.

Court of Chancery of New Jersey.

Jan. 3, 1895.

Suit by the Granite State Provident Association against George Monk and others to foreclose a mortgage. A reference to a master ordered to ascertain the amount due.

Frank P. McDermott, for complainant.

George W. McEwen, for defendants.

GREEN, V. C. This is a bill to foreclose a mortgage dated February 17, 1890, made by George Monk and Sarah A., his wife, William Gillies (widower), Joseph Shelley, and Norma, his wife, parties of the first part, to the Granite State Provident Association, a corporation organized under the laws of the state of New Hampshire, on certain property in West Hoboken, conditioned to pay to complainant, Its successors or assigns, the sum of $2 per month, monthly, in advance, on the 15th day of each and every month, on each of 15 shares of the building and loan fund of complainant, owned by the said parties of the first part, and standing in their names on the books of complainant; that is, $30 per month on said 15 shares, until the series of shares of which said 15 shares are part should be worth par, or $200 per share, when a proper satisfaction piece for the cancellation of the mortgage was to be duly executed. The mortgagors also assigned, as further security to complainant, the said 15 shares of stock in the building and loan fund of complainant, which assignment is indorsed on the certificate of stock, the latter being delivered to complainant. No part of the principal or interest money or dues upon the said 15 shares having been paid since May 15, 1892, this bill was filed to foreclose the mortgage. The answer of the defendants admits the execution and delivery of a mortgage to secure the payment of $1,000, but claims that at its date they were only indebted to the complainant in the sum of $400, and that the mortgage was given to secure the payment of $400 only; that the consideration of the mortgage was the receipt by them of $400, and no more; claiming that this amount has been paid, and that they were induced to sign a mortgage for $1,000 to secure the loan of $400, upon a false and fraudulent representation that the complainant was a mutual building and loan association, entitled to do business under the laws of New Jersey, and that it was itself loaning to the defendants the sum of $2,400, and, further, that the installments paid to complainant on the mortgage would be applied by them to the said loan of $2,400, and would pro tanto reduce such loan by so much, which representations defendants assert were false and fraudulent. The answer charges that the complainant was not a mutual building and loan association authorized to do business in New Jersey; that the complainant was not itself loaning defendants $2,400, but only $400; that two mortgages were made for said sum of $2,400, and for said additional $600, premium and bonus for the loan of $400, viz. a first mortgage of $2,000, and a second mortgage of $1,000, for said loan of $400, and premium of $600 for said loan; that the said first mortgage was not to the complainant, but said loan was assigned by it to one Barthold Michaels, and was secured by a mortgage for $2,000, at 6 per cent. for five years, no part of which could be paid within five years, and that said $2,000 was advanced by said Michaels, and is now a valid, subsisting lien against said property, unreduced in amount, and is now held and owned by the executrix of said Michaels; that none of the payments made, or to be made, according to the terms and conditions of the loan, were ever applied by the complainant to the payment of said first mortgage, and that it was not reduced by said payments by the amount of those payments, or by any amount whatever; that the defendants have paid to complainant the whole amount of $400 so loaned to them, with lawful interest thereon to date. The defendants also plead that the agreement under which the said mortgage was given was usurious, alleging that the loan was of $400, for which a mortgage of $1,000 was given, with an agreement to pay interest on $1,000, and to pay $600 in addition to lawful interest for the loan of $400, together with interest on said $600 at the rate of 6 per cent. per annum; alleging that the said $600, together with the interest thereon, was agreed to be paid as a bonus or premium to the complainant for the said loan and forbearance; alleging that they have paid complainant the whole of the $400 loaned, with interest thereon for three years, amounting to $72, and, in addition thereto, $360 on account of the bonus and the interest thereon; and insist that the said mortgage is fully paid, and no lien or charge on said real estate. They admit that on the loth of February, 1893, there was justlydue on said mortgage $37, which they allege was duly tendered to the complainant, and was accepted, whereby the mortgage was wholly paid and discharged.

The complainant is a corporation of the state of New Hampshire, incorporated by a special act, approved August 11, 1881. A supplement thereto was approved September 30, 1887. The first section of its charter gives it the right, among other...