Nickels v. People's Bldg.

• Decision Date: 09 July 1896
• Citation: 93 Va. 380,25 S.E. 8
• Court: Virginia Supreme Court
• Parties: NICKELS. v. PEOPLE'S BUILDING, LOAN & SAVING ASS'N.

93 Va. 380

25 S.E. 8

NICKELS.

v.PEOPLE'S BUILDING, LOAN & SAVING ASS'N.

Supreme Court of Appeals of Virginia.

July 9, 1896.

Action by Foreign Corporations—Sufficiency of Complaint — Building and Loan Associations—Forfeiture of Stock—Right to Waive Forfeiture—Contracts—Law of Place.

1. Under Code, § 1104, and Acts 1889-90, p. 170, prescribing the conditions under which a foreign corporation may transact business in Virginia, it is not necessary, in an action brought by such corporation, that the complaint should allege that the plaintiff had complied with the provisions of the law relating to foreign corporations.

2. A bond given to a building and loan association to secure a loan provided that on default of payment of any installment of interest or premiums for three consecutive months the whole principal sum, interest, and premiums should immediately become due. Defendant defaulted May 28, 1892, and continued in default until February, 1893, when he made a payment, with subsequent payments on March 1st and 18th. The sums were sufficient to pay the premiums and dues up to within three months of the time suit was brought, but they were not sufficient to pay interest, premiums, and dues. Held, that though, under the by-laws of the association, defendant's stock might have been forfeited on default, the plaintiff was not obliged to declare forfeiture, but had the right to continue the stock in force, and to apply any payments to the liquidation of any of its dues against defendant.

3. The provision in the bond that upon default of payment of installments the whole sum should become due, is not a provision for the increase of the debt by way of a penalty or forfeiture rendering the contract void.

4. A bond executed in Virginia and payable in New York is governed by the law of New York, and not of Virginia, as regards the question of usury.

Appeal from circuit court, Wise county; W. T. Miller, Judge.

Bill by the People's Building, Loan & Saving Association to foreclose a trust deed executed by W. H. Nickels. There was judgment for plaintiff, and defendant appeals. Affirmed.

H. C. McDowell, Jr., for appellant.

John A. Kelly and Jos. L. Kelly, for appellee.

KEITH, P. The People's Building, Loan & Saving Association, a corporation organized under the laws of the state of New York, filed its bill in the circuit court of Wise county on the 19th day of April, 1894, in which it shows that on the 10th of June, 1891, Nickels was admitted as a member of the said association, having subscribed to 30 shares of the stock. Soon after becom-ing a member, he borrowed from the association the sum of.$3,000, agreeing to repay the same in monthly installments, pursuant to the terms and conditions set forth in the bond dated the 10th of June, 1891, payable to the plaintiff, and signed by Nickels, and in the deed of trust executed on the same day for the benefit of the plaintiff, in which certain property was conveyed by Nickels and his wife to E. A. Walton, trustee, to secure the bond In the bond and deed of trust it is stipulated that, "if default should be made in the payment of any interest or premium moneys provided for in said bond and deed of trust, and the said default should continue for a period of three months after the same shall have become payable, that the whole of the principal sum thereby secured should become due, and the trust deed be liable to foreclosure. The bill then charges that Nickels has made default in the payment of numerous installments of premium and interest provided for; that his default has continued more than three months, and that there is unpaid and owing to the plaintiff for principal and interest the sum of $2,909.50; that Walton, trustee, declines to execute the trust imposed upon him, and that the plaintiff is therefore compelled to come into equity for the enforcement of its lien. Nickels demurred to and answered the bill, admitting that the plaintiff is a corporation, and that it is organized under the laws of the state of New York. He denies that he ever received the sum of $3,000 from the said association. He admits that he did receive the sum of $2,700. He denies that default has been made in the payment of the installments stipulated, and continued for more than three months prior to the institution of the suit; and denies that the sum claimed in the bill, or any other sum, was due complainant at the institution of the suit He alleges that the contract between himself and the association is usurious. He asks that his answer may be treated as a cross bill, and that the People's Building, Loan & Saving Association shall be required to answer its allegations. The association did demur to and answer the cross bill denying all the material allegations therein contained. Thereupon proofs were taken, and the circuit court entered a decree in favor of the plaintiff for the sum of $2,700, with interest, subject to credits for interest and premiums paid, and providing that unless Nickels, or some one for him, should, within 60 days from the date of the decree, pay the sum so found due, the land conveyed in the deed of trust to Walton should be sold. From this decree an appeal was allowed to Nickels by one of the judges of this court.

The first question arises upon a demurrer to the bill. It is contended upon the part of the appellant that, in order to maintain its suit, it was necessary for the plaintiff to aver a compliance with the laws of this state with reference to companies incorporated in foreign states doing business within its limits. See Code Va. § 1104, and Acts Assem. 1889-90, p. 170. It is unnecessary to inquire whether or not, under the statute cited, a contract made in this state by an insurance company chartered under the laws of another state, which has not complied with our laws above referred to, is void or voidable, the question lying behind that being one of pleading. Can the question be raised by a demurrer to a bill, or is it matter of defense? Upon the part of the defendant it is contended that compliance with the conditions prescribed by law is a prerequisite to the right to sue in the domestic courts, and must be made affirmatively to appear. Upon the part of the appellee it is contended, without admitting that the failure to comply with the law would at all affect the validity of the contract, that the question cannot be raised by demurrer, but that It is strictly a matter of defense, and the failure to comply must be made to appear by plea or answer. There is no such issue made in any of the pleadings presented in this record. Without considering the effect of section 1104 and of the statute found in Acts Assem. 1889-90 upon the validity of the contract, w...