Lindsay v. U.S. Savings & Loan Co.

• Citation: 24 So. 171,120 Ala. 156
• Parties: LINDSAY v. UNITED STATES SAVINGS & LOAN CO. ET AL.
• Decision Date: 08 November 1898
• Court: Supreme Court of Alabama

24 So. 171

120 Ala. 156

LINDSAY v. UNITED STATES SAVINGS & LOAN CO. ET AL.

Supreme Court of Alabama

November 8, 1898

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

Action by Henrietta A. Lindsay against the United States Savings &amp Loan Company and others for an accounting as to the amount due on a note and mortgage, to redeem real estate covered by the mortgage, and to enjoin the foreclosure of such mortgage. A register was appointed to take and state an account. From an order overruling exceptions to the report, and rendering judgment thereon, the complainant appeals. Reversed.

The appellant, Henrietta A. Lindsay, opened negotiations with the United States Savings, Loan & Building Company, a building and loan corporation of St. Paul, Minn., for the purpose of securing a loan from said company; and on May 17, 1890, the negotiations were completed, and Henrietta A. Lindsay subscribed for 50 shares of stock in said company, and executed to it the following note: "St. Paul, Minn., May 27, 1890. $2,500.00. For value received, after three years from date, and before 9 years from date, I promise to pay to the order of the United States Savings, Loan and Building Company, at the office of its treasurer, St. Paul, or to its trustees, in Minneapolis, Minn., the sum of two thousand five hundred dollars, with interest at the rate of 6 per cent. per annum on the sum of two thousand five hundred dollars payable monthly. It is understood that this note is given for a loan obtained on fifty shares of stock of said United States Savings, Loan and Building Company; and if the maker hereof fails to make any monthly payment on said stock, or to pay any installment of interest for a period of three months after the same is due, then the whole amount of this note shall become due and payable. But if the maker hereof shall pay all installments of interest which become due hereon, and all monthly payments and fines which become due on said stock until said monthly payments shall have been past due for a period of six months, then, upon the surrender of said stock to said company, this note shall be deemed to be fully paid and canceled. This note is understood to be made with reference to and under the laws of the state of Minnesota. [Signed] Henrietta A. Lindsay. William M. Lindsay." To secure this note, Mrs. Lindsay, together with her husband gave a mortgage upon certain real estate. This mortgage contained the following stipulations: "This mortgage being given to secure a loan made on fifty shares of stock in said United States Savings, Loan and Building Company, the monthly payments on which amount to thirty dollars ($30) per month, said party of the first part doth further covenant and agree to make the said monthly payments on said stock as they shall become due, until said stock becomes fully paid in together with all fines that may accrue thereon: provided, nevertheless, that if the said party of the first part, her heirs, executors, administrators, or assigns, shall well and truly pay or cause to be paid to the said party of the second part, its successors or assigns, at the office of its treasurer at St. Paul, Minnesota, two thousand five hundred dollars ($2,500.00), and interest according to the conditions of one promissory note executed by Henrietta A. Lindsay and Wm. M. Lindsay, said party of the first part, to said party of the second part, bearing even date herewith, payable after three years from date, and before nine years from date, with interest on two thousand five hundred dollars ($2,500.00), before and after maturity, at the rate of six per cent. per annum until paid, interest payable monthly, or shall pay or cause to be paid to the treasurer of said company all installments of interest which become due on said note, and all fines and monthly payments which become due on said stock until said stock becomes fully paid in, and of the value of $100 per share, and before any of said installments of interest or monthly payments shall have been past due for a period of six months, and shall then surrender said stock to said company in payment of said note, then this deed shall be null and void; otherwise, to remain in full force and effect. But if default be made in payment of the said sum or sums of money, or of any installment of interest thereon, or of any monthly payment on said stock for a period of three months after the same shall be due, or any part of either, or in effecting the insurance or in paying the taxes or assessments at the time or times hereinbefore specified for the judgment thereof, or in any condition in this mortgage contained, then, and in either or any such case, the whole principal sum or sums secured by this mortgage, and the interest thereon accrued up to the time of such default, shall be at the election of said second party, its successors or assigns, or its or their agent, become thereupon due and payable immediately upon said default; and the said parties of the first part do hereby authorize and empower the said party of the second part, its successors or assigns, the owners hereof, its agent and attorney, at its or their election, and without notice of such election, to foreclose at once this mortgage for the whole of said principal sum or sums, and accrued interest and money paid for taxes, assessments, and insurance, as herein provided, or to foreclose for such sum or sums, and interest and money paid as may be due and payable by the terms of said note hereby secured; and to sell the hereby said premises at public auction, and convey the same to the purchaser in fee simple, agreeably to the statutes in such case made and provided; and, out of the money arising from such sale, to retain the principal and interest and fines then accrued on the sum or sums so elected to be foreclosed for, together with any insurance, assessments, or taxes paid as above stipulated, and all costs and charges of such foreclosure, including seventy-five dollars ($75.00) attorney's fees for foreclosing this mortgage, and pay the overplus, if any, to the said party of the first part, her heirs, executors, administrators, and assigns. This mortgage is understood to be made with reference to and under the laws of the state of Minnesota." After the execution of the note, Mrs. Lindsay, up to and including March, 1893, continued to pay to said corporation the monthly installment of $42.50, as stipulated for in the note and mortgage, $12.50 of such amount being called the interest on said loan. After March, 1893, Mrs. Lindsay ceased to pay any monthly installments, whereupon the United States Savings, Loan & Building Company declared Mrs. Lindsay in default, and, acting through and by its attorney, advertised the mortgaged premises for sale on September 16, 1893. Subsequent to the execution of the note and mortgage, the name of the corporation to which they were given was changed to that of the United States Savings & Loan Company.

The bill in this case was filed by Mrs. Lindsay against the United States Savings & Loan Company and their attorneys and, after averring the facts pertaining to the negotiation of the loan, averred that the complainant was paying a usurious rate of interest for the money loaned to her. The prayer of the bill was for an accounting between the complainant and the defendant corporation, for the purpose of ascertaining the money justly due from her, after allowing the legal rate of interest, to redeem the real estate she had mortgaged, by the payment of the amount ascertained to be due thereon; and, further, that the United States Savings & Loan Company and its attorneys be enjoined from foreclosing said mortgage. On the final submission of the cause, on the pleadings and proof, the chancellor rendered the following decree: "This cause is submitted for final decree on the pleadings and the evidence as noted by the register. On consideration, it is ordered, adjudged, and decreed that the complainant is entitled to redeem the property described in the bill, and that there is no usury in the note or mortgage set forth in the pleadings. It is further ordered, adjudged, and decreed that it be, and it is hereby, referred to the register of this court, to take and state an account of the amount due from the complainant to the defendant U.S. Savings and Loan Co.; and, in so doing, he will charge the plaintiff with $2,500, for which said note was given, and interest thereon at the rate of six per cent. per annum from the date thereof to the time of said reference; also, with all installments (monthly payments) due on the stock of said company taken by her up to this time, and any insurance or taxes which the defendant company may have paid on said debt, and with a reasonable fee for the services of the solicitors of the defendant in this case, not to exceed the sum of $75, with interest on said several sums, and will credit her with all payments made by her, whether of interest, installments, or otherwise, and with the withdrawal value of said stock at this time." The register made his report, and the complainant filed her exceptions thereto, as follows: "(1) For that the register erred in stating said account, in this: That he charged the complainant with interest on $2,500 from May 27, 1891, to September 9, 1895, and did not allow her any credit on the partial payments made for thirty-five successive months. (2) For that the register erred in not computing interest according to the rule laid down in section 1753 of the Code of Alabama [of 1886] , in this: That he should have computed the interest on the principal up to the first partial payment, applied the payment to the payment of the interest, and the remainder to the payment of the principal. (3) For that the register erred in allowing to...