Hayes v. Southern Home Bldg. & Loan Ass'n

• Decision Date: 30 June 1899
• Citation: 124 Ala. 663,26 So. 527
• Parties: HAYES v. SOUTHERN HOME BUILDING & LOAN ASS'N.
• Court: Alabama Supreme Court

26 So. 527

124 Ala. 663

HAYES v. SOUTHERN HOME BUILDING & LOAN ASS'N.

Supreme Court of Alabama

June 30, 1899

Appeal from chancery court, Walker county; Thomas Cobbs, Chancellor.

Bill by J. H. Hayes against the Southern Home Building & Loan Association. Preliminary injunction dissolved, and complainant appeals. Reversed.

The bill in this case was filed to enjoin a sale under a power contained in the mortgage executed by the complainant to the defendant, and also for the redemption of the mortgage, and for an accounting. The bill averred that the complainant having become a stockholder of the defendant, negotiated a loan from the defendant, and to secure the payment of the same executed a mortgage upon certain real estate in the town of Jasper, and gave his bond to pay the regular monthly installments and dues, and transferred absolutely to the defendant 10 of the 20 shares of stock subscribed for by him. It was then averred that there was a charge of usurious interest; that the complainant had paid the amount borrowed and that upon an accounting it would be ascertained that the mortgage indebtedness had been liquidated, and the complainant was entitled to have said mortgage canceled. It was further averred that the mortgage was upon the homestead of J. H. Hayes, and that the acknowledgment by the wife was made before one Howard Lamar, a notary public, who, at the time of taking such acknowledgment and making the certificate thereof, was himself a stockholder of the defendant corporation. The mortgage and the bonds and the transfer of the 10 shares of stock were made exhibits to the bill. The defendant answered the bill, setting up that the loan had been negotiated as loans were usually made from building and loan associations; that in subscribing for the stock in the defendant and in borrowing the money the complainant agreed to abide by the by-laws and rules and regulations of the defendant, and that said by-laws, rules, and regulations were a part of the contract of subscription for stock, and a part of the contract entering into the loan by the defendant. The respondent denied that it had charged more than a legal rate of interest, and further denied that the complainant had paid all of said mortgage indebtedness, and set up that, according to the rules, by-laws, and regulations of the defendant, the complainant was yet indebted to the defendant in a large amount. The cause was submitted upon the pleadings and upon an agreed statement of facts. In this agreed statement of facts the following facts were disclosed: The defendant Southern Home Building & Loan Association, is a corporation doing a building and loan business, with its principal place of business at Atlanta, Ga. Some time in the month of May 1890, the complainant became a member of said building and loan association by subscribing for 20 shares of the capital stock of said association at the par value of $100 each, for which he paid at the time he so subscribed for said shares the sum of $20 in cash, and agreed to pay the sum of $20 per month on said stock until it should mature, and become of the par value of $100. The Southern Home Building & Loan Association had a local board of directors at Jasper, in Walker county, Ala., of which complainant, the said J. H Hayes, was president, John A. Gravlee was secretary, and Howard Lamar attorney. On, to wit, the 25th day of July 1890, the said J. H. Hayes made a written application to the defendant for a loan or advance of $1,000, as shown by the application made by him. The application for the loan, together with all the other necessary papers perfected, were annexed to the agreed statement of facts as exhibits thereto. Thereafter, on, to wit, the 17th day of November, 1890, the application for said loan was granted by said association, and the sum of $1,000 was paid to complainant as such loan or advance, and the repayment of the same was secured by a mortgage, a copy of which, as well as of the bond executed by the said J. H. Hayes, and the assignment of his stock, are annexed as exhibits to the bill of complaint. This assignment of stock was made on November 17, 1890, the date of the mortgage, and recited that J. H. Hayes transferred absolutely to the defendant association and its assigns 10 shares of stock held by him in said association, he agreeing to pay the interest, premium, and installments on said stock according to the terms of the bond which was given. The payment of the amount so loaned to complainant by defendant was made in the draft of defendant on its treasurer at Atlanta, Ga., said draft being sent from Atlanta, Ga., to the local attorney, to be delivered to complainant at Jasper, Ala., on the execution by him of the mortgage. There were then set out the payments which had been made by the complainant to the defendant association, which payments were made without instruction as to the application thereof, and were applied by the defendant, according to the by-laws of the association, to the payment of dues, interest, premium, and fines which had been imposed for the complainant's delinquencies. On, to wit, the 11th day of May, 1896, the said J. H. Hayes obtained a loan from defendant on his 10 shares of stock which had not been transferred to said association, the amount of said loan being $500, it being payable in six months' time, the sum of $30 being deducted for premium and interest; so that he actually received on said loan only $470. At the same time Howard Lamar borrowed of the association $200, on the same terms, realizing net $188, and these two amounts of $470 and $188 were paid on complainant's account in May, 1896, and in June, 1896, in the statement above set forth, after which he made no further payments on account of said stock or on account of either of said loans. The complainant is a resident citizen of Walker county, Ala., over the age of 21 years, and was at the time of the filing of the bill in this case. The property conveyed by said mortgage was occupied by the complainant and his wife and family as a homestead at the time of the execution of said mortgage. The execution of said mortgage was acknowledged before Howard Lamar as notary public, and the wife's separate acknowledgment was also made before the said Howard Lamar, who was at that time a known stockholder in said association. Some time in March, 1897, prior to the filing of the bill in this case, the complainant expressed a willingness to pay the defendant the sum of $200 in full compromise settlement of the indebtedness, agreeing at the same time to relinquish all his interest in the shares of stock owned by him in said association, and pledged to the association to secure the payment of said loans; but defendant declined to accept said offer. The amount claimed by defendant to be due to it from complainant on, to wit, the 1st day of July, 1897, was $1,920.50, and the withdrawal value of said 20 shares of stock on the same date was $1,307, as claimed by defendant, leaving a balance due on that date, as claimed by defendant, of $613.50, as shown by Exhibit D, thereto attached. Complainant claims that said withdrawal value is a much larger sum. The withdrawal value mentioned is estimated on the basis that all payments have been made on the stock to July 1, 1897, the same not having been made in fact, but being charged to the stockholders, as shown by said account. At the time the bill was filed, the amount claimed by defendant to be due from complainant on account of said loan of $1,000 was $1,207, and the withdrawal value, at that time, of the 10 shares of stock transferred, amounted to $616.22. The withdrawal value of stock is estimated and determined in accordance with article 6, §§ 5, 6, of the...