Pioneer Sav. & Loan Co. v. Nonnemacher

• Decision Date: 27 November 1900
• Citation: 127 Ala. 521,30 So. 79
• Parties: PIONEER SAVINGS & LOAN CO. v. NONNEMACHER. [1]
• Court: Alabama Supreme Court

30 So. 79

127 Ala. 521

PIONEER SAVINGS & LOAN CO. v. NONNEMACHER. ^[1]

Supreme Court of Alabama

November 27, 1900

Appeal from city court of Anniston; James W. Lapsley, Judge.

Bill by Charles Nonnemacher against the Pioneer Savings & Loan Company. Decree for plaintiff, and defendant appeals. Reversed.

The substance of the averments of the original bill, having regard to the paragraphs thereof, is as follows: Section 1 alleges that on or about August 1, 1889, orator owned a certain lot (his homestead), which is described, in Anniston and, desiring to make additional improvements, applied to the National Building, Loan & Protective Union, a Minnesota corporation, for a loan of $4,800. Section 2 alleges that said corporation has changed its name to Pioneer Savings &amp Loan Company. Section 3 alleges that, before the corporation would make the loan, it required complainant to make certain advance payments, which he did, amounting to $366, and on the 2d day of December, 1889, he executed his nonnegotiable note for $4,800, due 56 months after date, and secured same by a mortgage on said lot, which note and mortgage are attached as a part of the bill. Said note and mortgage were executed and delivered in Alabama, and forwarded by defendant's agent to it, and were made to secure said loan of $4,800. It was then further averred in said sections that, although the note was given for $4,800, the complainant had received only $4,339 of this amount, after deducting the advance payment as stated above, and that during the months following, up to the maturity of the note (i. e. August 2, 1894), he had paid on account of said loan, including payments above named, $5,449 which was largely more than enough to satisfy the said amount he received and interest; said payments being made monthly and averaging from $91 to $106 per month. Complainant avers that he has fully paid said loan and mortgage, and there is nothing due thereon. Section 4 alleges that, notwithstanding full payment of loan and interest, the defendant is claiming that he is largely indebted to it on account of the loan, and is proceeding to foreclose the mortgage, and has advertised the property for sale. Section 5 alleges that notwithstanding full payment as aforesaid, he has offered to make additional payments, at one time $500, and at another $750, both of which offers have been refused; the defendant demanding $1,700 or $1,800 as balance on said debt. Orator avers he does not owe any such amount, or any amount, on said mortgage debt, and avers that said contract is usurious, and so appears on its face. Section 6 alleges irreparable injury to orator if defendant is allowed to foreclose the mortgage under the power of sale, and that orator will be unable to have ascertained the balance, if any, due on the mortgage debt, and will not be able to redeem from the sale, and will be deprived of possession of the premises. After the usual prayer for process, the bill asks that the sale under the power be enjoined until it can be ascertained by decree whether there is really any balance due the defendant, and, if so, what amount, and that upon payment of the balance so ascertained, which orator now offers to pay, said injunction be made perpetual.

There was attached to the bill, as Exhibit A, the note which was given to the defendant, and which was in words and figures as follows: "Minneapolis, Minnesota, December 2, 1889. Fifty-six months after date, for value received, I promise to pay to the National Building, Loan and Protective Union, a corporation duly organized under the laws of the state of Minnesota, the sum of four thousand eight hundred dollars, with 5 per cent. interest per annum and five per cent. premium per annum thereon from date until paid, payable monthly on or before the last Saturday of each month; principal, interest, and premium payable at the office of the National Building, Loan and Protective Union, at Minneapolis, Minnesota. Any failure to pay interest or premium when due shall make principal, interest, and premium at once due, and any waiver of such right shall not prevent the payee from enforcing the right upon any recurrence of the default. The shares of stock in the National Building, Loan and Protective Union held by the undersigned, as shown by certificate of stock No. 12,932, are hereby transferred and pledged to the National Building, Loan and Protective Union as collateral security for the performance of the conditions of this obligation and of the mortgage securing same. [Signed] Chas. Nonnemacher. Melanie Nonnemacher."

The bill was subsequently amended by adding after the averments of the third paragraph the following averment: "That, notwithstanding this, the defendant claims that on the 9th day of August, 1889, orator subscribed to 60 shares of stock in defendant corporation, which was issued to him on the 1st day of September, 1889, by which orator agreed to make certain payments on said stock, and which, by its terms, was to mature in 5 years from its date, to wit, September 1, 1894, and in which the defendant agreed to pay orator $100 for each such share at that time, making in all $6,000 as the face value of said stock at its maturity; that it was transferred to defendant as collateral to said note, and which stock, defendant claims, was to pay off said note at its maturity, provided certain payments (all of which were promptly made) were made to defendant by orator during said 5 years; and orator avers that the payments he made to defendant during said 5 years were largely more than enough to pay said note and satisfy said mortgage, and which amounted, as aforesaid, to $5,449, before said 1st day of September, 1894. Should your honor determine that orator is mistaken and defendant is correct in this contention, then orator avers that said stock is fully paid up and should be applied to the payment of said note, and, when so applied, not only pays said note, but leaves the defendant due your orator a large sum in addition, to wit, $1,200, with interest since the maturity of said stock; and orator asks that so much of the value of said stock as may be necessary be appropriated to the amount ascertained by your honor to be due on said note; that all amounts paid to defendant by orator, whether upon said so-called stock, etc., or otherwise, or by whatever name called, were in fact payments on said mortgage loan, and will by this court be so appropriated to such payment; and orator has a right to have, and asks to have, it done by the court, as he had instructed defendant to do in August, 1894. Orator avers that said stock subscription was only a part of the plan or scheme by which orator procured said loan, and was made for the further purpose of avoiding the usury statute of Alabama; that orator signed said subscription for the sole purpose, and only for the purpose, of securing and procuring said loan, and it was required by defendant of him before the said loan would be made; and orator avers that the said note, on its face, calls for the payment of 12 per cent. per annum interest on said loan. The word 'premium' therein is only another name for so much interest. Orator further shows that the said defendant, though conceding that by the terms of said stock certificate the said loan would be paid long before the maturity of said so-called stock on the 1st day of September, 1894, yet it claims and insists, in order to avoid the effect of said concession, that orator agreed in June, 1891, to postpone the maturity of said stock and continue payments indefinitely on said stock, and that all payments made by orator were not payments on said loan, and that orator having ceased making payments to said defendant in August or September, 1894, the defendant had a right to declare said stock and all payments made by orator, and has declared it, forfeited to defendant, and to demand of orator the payment of the full amount of said note, interest, and attorney's fees. But orator avers that said alleged agreement was void (1) for lack of consideration, and (2) because it placed additional burdens and payments on his homestead without the consent or concurrence of his said wife, and (3) because the same was based upon the insistence of a right alleged by defendant to exist, and which was in fact unfounded; that the claim of said defendant that it had a right to forfeit said payments and stock is unfounded in law and in fact. The statutes of Minnesota, where defendant resides and does business, which it alleges control in this whole matter, do not authorize such forfeiture. But if the court should determine that the said agreement modified the alleged stock contract so as to postpone the maturity of the stock indefinitely and was a valid contract by the defendant, then orator insists that the alleged effort of defendant to declare said stock forfeited, and said alleged forfeiture, was a conversion by defendant of the same, and makes defendant liable in this court to orator for its value, which is shown by its letter dated August 30, 1894, to be of the value of $3,492.12, and orator avers that he is entitled to have the value of said stock credited on said mortgage debt to be ascertained by your honor."

The prayer of the bill was subsequently amended by praying for the following additional relief: "That all payments made by orator to defendant, or any amount which may be found to be due orator on account of payments on said so-called stock or the maturity of said stock, are, on account of the conversion of said stock by defendant, or otherwise, to be applied to the payment of said mortgage debt. If your honor should find or determine that said stock is fully paid up, or that there is a balance due orator from defendant on that account, or on account of other...