Phillips v. Columbus City Bldg. Ass'n

• Decision Date: 12 June 1880
• Citation: 53 Iowa 719,6 N.W. 121
• Parties: PHILLIPS v. THE COLUMBUS CITY BUILDING ASSOCIATION.
• Court: Iowa Supreme Court

53 Iowa 719

6 N.W. 121

PHILLIPS

v.THE COLUMBUS CITY BUILDING ASSOCIATION.

Supreme Court of Iowa.

Filed June 12, 1880.

Appeal from Louisa circuit court.

This is an action in equity, the object of which is to cancel a mortgage upon certain real estate, upon the alleged ground that said mortgage was usurious, and that a sum equal to the principal secured thereby had been paid. Upon a trial on the merits the petition was dismissed, and the plaintiff appeals. The facts appear in the opinion.R. H. Hanna, for appellant.

Sprague & Springer, for appellee.

ROTHROCK, J.

The plaintiff, being the owner of certain shares of the capital stock of the defendant, applied for a loan of money upon said shares. He obtained a loan of $402, for which he agreed to pay a premium of $198. To secure the payment of the loan he executed to the defendant a mortgage upon two lots in Columbus City, by which he contracted to pay the defendant 10 per cent. per annum interest on not only the sum of $402 actually received by him, but also upon the sum of $198, being the premium for the loan. Afterwards he sold and conveyed the mortgaged lots to one Stronach, and the loan and membership in the building and savings association were tranferred to Stronach. Stronach sold the mortgaged property to one Esther Forbes, October 24, 1877. In October, 1879, Forbes sold said property to R. H. Hanna, and in the same month Hanna sold and conveyed the same to the plaintiff.

It appears from the record before us that the dues and other obligations accruing by reason of membership in the association were paid by the parties owning the mortgaged property. An actual transfer of the stock was made by Phillips to Stronach. No formal transfer was made upon the books of the company from Stronach to Forbes, but it appears that Forbes paid the dues while she owned the property. In June, 1878, there was a meeting of the stockholders of the association, at which it was resolved that interest theretofore charged and collected on premiums be refunded or credited to those entitled thereto, and that thereafter interest be charged on the actual loan of money only. This action was taken in order to purge the loans of the association of usury, under the decision of this court in Hawkeye Benefit & Loan Association v. Blackburn, 48 Iowa 385. The sum of $104.50, being the amount of the interest which had been paid on the premium, was credited to the shares of stock, which then stood on the books in the name of Stronach, but which were actually owned by Forbes. No interest was at any time after that charged or collected upon the premium, and that which had been paid was refunded by Mrs. Forbes accepting it as a credit, and it was applied upon dues thereafter accruing until it was exhausted. After that, and while Mrs. Forbes owned the property, she paid the dues and interest, but no payment of interest was made or...