National Bldg. & Loan Ass'n v. Ballard

• Decision Date: 17 April 1900
• Citation: 27 So. 971,126 Ala. 155
• Court: Alabama Supreme Court
• Parties: NATIONAL BUILDING & LOAN ASS'N v. BALLARD.

27 So. 971

126 Ala. 155

NATIONAL BUILDING & LOAN ASS'N v. BALLARD.

Supreme Court of Alabama

April 17, 1900

Appeal from chancery court, Pike county; Jere N. Williams Chancellor.

Action by John J. Ballard against the National Building & Loan Association. From a judgment in favor of plaintiff, defendant appeals. Reversed.

The bill in this case was filed by the appellee, John J. Ballard against the National Building & Loan Association, which, as averred in the bill, was "a private corporation organized under the laws of the state of Alabama, having the city of Montgomery, in said state, as its principal place of business." It was averred in the bill that on July 2 1891, the complainant effected a loan of $1,000 from the defendant, and entered into a contract and executed a mortgage upon a certain lot to secure the same. The averment of the bill as to the false representations as to the time within which the stock subscribed for would mature is sufficiently stated in the opinion. It was further averred in the bill that said contract is usurious, in that it stipulates for the payment of 6 per cent. interest per annum payable monthly on the sum of $1,000, from the date thereof for the entire term, or "until the dues so credited on said stock, together with the dividend thereon, shall equal the par value of said stock," as represented in said prospectus (Exhibit No. 2) to be about six years, and "by reason of said usurious interest taken or reserved in said contract it is void as to the usury contained therein, and also void by reason of said false representations." The complaint further averred that the loan of $1,000 "has been fully and excessively paid to the corporation," and that the mortgage "described is a cloud upon the complainant's title and the property conveyed in said mortgage." The prayer of the bill was that the contract be declared usurious and void, and that a reference be had before the register to ascertain what was due from the complainant to the defendant, if anything, and that, if it appeared from the report of the register that the loan had been repaid in full, the mortgage be canceled and annulled as a cloud upon the property of the complainant conveyed therein. The complainant also offered to do equity by paying any amount ascertained to be due, and submitted himself to the jurisdiction of the court. The mortgage executed by the complainant and the prospectus issued by the defendant were both made exhibits to the bill. The mortgage recited that the mortgagor, John J. Ballard, did enter into a contract, which was in words and figures as follows "Received of the National Building & Loan Association of Montgomery, Ala., one thousand dollars, loan on 20 shares of stock (No. 806) owned by _____ in said association. I, John Ballard, agree to pay to said association, on the first Saturday of each month from this date, at the office of the association, Montgomery, Ala., nineteen (19) dollars, which shall be applied as follows: First, to the payment of monthly dues on said stock, the sum of seven (7) dollars; second, to the payment of premium for precedence due on said loan amounting to seven (7) dollars per month; third, to the payment of the interest due on said loan, amounting to five (5) dollars per month. I further agree to pay all fines and assessments levied or made against me pursuant to the by-laws of said association. Said payments shall be continued until the dues so credited on said stock, together with the dividend thereon, shall equal the par value of said stock. Should I fail for six months to pay said monthly payments, then the whole amount of said loan shall, at the option of said association, at once become due and payable. It is hereby mutually agreed that this contract, and the mortgage securing the same, are made and shall be construed agreeably to the laws of Alabama, and that this provision shall not be waived, except by stipulation of the parties in writing over the signature of the secretary and corporate seal of the association." The...