Schell v. Equitable Loan & Investment Ass'n.

• Decision Date: 21 March 1899
• Citation: 51 S.W. 406,150 Mo. 103
• Court: Missouri Supreme Court
• Parties: SCHELL v. EQUITABLE LOAN & INVESTMENT ASS'N OF SEDALIA.

51 S.W. 406

150 Mo. 103

SCHELL v. EQUITABLE LOAN & INVESTMENT ASS'N OF SEDALIA.

Supreme Court of Missouri.

March 21, 1899.

BUILDING AND LOAN ASSOCIATIONS — POWERS — USURY — PLEADING.

1. A building and loan association organized on the mutual plan, under Rev. St. 1879, c. 21, art. 9, has no power to contract that shares of its stock pledged by a borrowing member shall reach their par value within a fixed time; such power not being contemplated by the statute governing such associations, and its exercise being likely to give borrowing members a share of the profits that would be unequal to that of the other members.

2. In an action against a building and loan association for a cancellation of a trust deed executed to secure a loan, a question of usury is not in the case, where the ground for relief is based on an allegation of compliance with the obligations of the deed, and no mention of the usurious nature of the transaction is made.

In banc. Appeal from circuit court, Greene county; James T. Neville, Judge.

Suit by Charles E. Schell against the Equitable Loan & Investment Association of Sedalia. Decree for plaintiff, and defendant appeals. Reversed.

Barnett & Barnett and Sam. H. West, for appellant. Massey & Tatlow, for respondent.

ROBINSON, J.

This is a suit in equity, instituted in the Greene circuit court by the plaintiff, a borrowing stockholder, against the Equitable Loan & Investment Association of Sedalia, a building and loan association organized under article 9, c. 21, Rev. St. 1879, to cancel and declare satisfied two certain deeds of trust on lot 4 in Kelley's addition to Springfield, Mo., given to secure loans obtained by plaintiff from said association. On the hearing in the circuit court, the issues were found for the plaintiff, and a decree rendered that said deeds of trust be canceled and for naught held, and that plaintiff recover of defendant his costs expended therein, from which judgment defendant appealed.

The petition, after stating that defendant is a building and loan association organized under the statutes of this state, in substance alleges that on the 20th day of March, 1889, being the owner of the real estate in question, and desirous of borrowing $800 with which to build a dwelling house on said premises, and the further sum of $200 for the purpose of making certain other improvements thereon, the plaintiff was solicited to take five shares of stock in the association, on the assurance that the association would loan him said sums of money upon his securing such loans by a pledge of his shares and a deed of trust upon his Springfield real estate; that thereupon he took and subscribed for five shares of stock in the association; that on April 17, 1889, the defendant loaned the plaintiff from its accumulated assets the sum of $800, plaintiff giving his note therefor, whereby he obligated himself to pay the sum in 100 monthly payments of $12 per month; that afterwards, on April 12, 1890, he borrowed of said association the further sum of $200, and gave his note promising to pay the last-named sum in 100 monthly payments of $3 per month; and that the loans and obligations assumed in relation thereto were secured by a pledge of plaintiff's five shares of stock and the two deeds of trust in question. It was further alleged that both deeds of trust and the notes secured thereby contained the following provision, to wit: "The payment of said monthly sum of ____ dollars for the full period of said one hundred months, and fines and penalties, shall entitle each of said shares of stock to redemption by said association at the par value of $200 each, and the said shares so entitled to redemption shall at the end of said one hundred months be taken and canceled by said association in full satisfaction of the obligation, and of the deed of trust to secure the same. In consideration of the said redemption of the said stock and the satisfaction of this obligation and said deed of trust, at said end of one hundred months, I hereby waive and release all further right, interest, and benefit in or to the profits and earnings of said association, and hereby transfer and assign same to said association." The petition further alleged that plaintiff had fully complied with all of the terms and conditions of said deeds of trust and the obligations secured thereby, and paid all monthly dues, installments, and premiums, as therein required, for the full period of 100 months, and that thereupon plaintiff had requested the defendant company to cancel his pledged shares, and acknowledge satisfaction of said deeds of trust, or to execute and deliver to him a sufficient deed of release therefor, the costs...