St. Louis Domicile & Sav. Loan Ass'n v. Augustin

• Decision Date: 25 April 1876
• Parties: ST. LOUIS DOMICILE AND SAVINGS LOAN ASSOCIATION, Respondent, v. EDWARD AUGUSTIN, Appellant.
• Court: Missouri Court of Appeals

2 Mo.App. 123

ST. LOUIS DOMICILE AND SAVINGS LOAN ASSOCIATION, Respondent,

v.EDWARD AUGUSTIN, Appellant.

St. Louis Court of Appeals, Missouri.

Apr. 25, 1876.

1. Where a committee of a corporation are authorized, by a resolution of the directors, to make collections due the corporation, they may institute proceedings to collect, in the name of the corporation, against an individual, without an order specifying the mode of collecting that particular indebtedness, or without any more particular authority with reference thereto.

2. Neglect to choose officers of a private moneyed corporation does not work a dissolution of the corporation. The acts of the officers holding over are valid.

3. In an action on a penal bond, judgment may be entered for the amount of the bond, with interest from the date of suit.

4. Where a corporation is, by its charter, authorized to make an usurious contract, and where no instruction as to usury was asked or given the jury, and where usury was not pleaded, a verdict will not be disturbed because the evidence discloses usury.

5. An entry of judgment on the assessment of damages by a jury in a suit upon a penal bond, which is not in the proper form for such a judgment, cannot be amended by a subsequent entry of judgment, the court taking the cause as then submitted, without having made any order whatever regarding the first entry; and on appeal both judgments will be set aside for irregularity.

APPEAL from St. Louis Circuit Court.

Reversed and remanded.

Gottschalk and H. D. Wood, for appellant, cited: Forest City United Land and Building Assn. v. Gallager et al., 25 Ohio St. 208; Mercer v. Conc. B. & S. Assn., 25 Ohio St. 187.

Slayback & Haeussler, for respondent, cited: Wag. Stat. 293, 783, sec. 5; Kansas City Hotel Co. v. Harris, 51 Mo. 464; Rutherford v. Williams, 42 Mo. 18; Smith v. Best, 42 Mo. 185; DeKalb v. Hixon, 44 Mo. 341; Packman v. Meatt, 49 Mo. 348.

BAKEWELL, J., delivered the opinion of the court.

This is a suit on a bond in the penal sum of $3,400, executed by defendant on April 15, 1858.

Plaintiff is a corporation created by the Legislature of this State in 1857. Its object, as declared in the act, is “accumulation of a fund, by small monthly installments, to enable the members of the association to purchase real estate, erect buildings, redeem mortgages, satisfy ground rents, and effect similar purposes.” Each stockholder is to pay $1 monthly on each share of stock, until the value of the whole stock is sufficient to divide to each share $200. For neglect to make such payments, 10 cents monthly is to be paid on each share.

Each stockholder is entitled to a loan of $200 for each share he holds, the loan to be disposed of to the highest bidder, not to be made under par, the premium offered for the loan to be deducted when the loan is made. The loan must be secured by bond, mortgage, or deed of trust, and one share of stock for each $200 to be assigned as collateral, interest to be paid monthly, at agreed rates, not to exceed 1 per cent. per month.

The officers of the association are declared to be a president, vice-president, and secretary and treasurer, and eight directors, who may enact by-laws for their own government. The charter also provides that the president, treasurer, and directors shall constitute the board of directors, and shall be elected at the regular annual meeting.

It appears from this statement that certain provisions which, when existing in the shape of a constitution and by-laws, in similar institutions, have been held by the courts of Pennsylvania, Tennessee, and, perhaps, of other States, to be unlawful, are, in the case of this corporation, made a part of the charter itself, and directly sanctioned by the legislative power.

Defendant, at the time of the transaction set forth in the petition, was a director, as well as a stockholder, of plaintiff.

It appears from the pleadings and evidence that he borrowed $3,400, on April 15, 1858, from plaintiff, bidding 40 per cent. for the loan, and getting it over others who competed. After deducting the premium, $1,360, he, therefore, received but $2,040. Defendant was then the owner of twenty-three shares of stock. The loan was made on seventeen of these shares, which he then assigned to plaintiff as collateral, and executed the bond sued on, securing its payments by a deed of trust upon certain real estate in the city, which seems to have been a sink-hole of little value, and which was a source of expense, not only for taxes, but to comply with orders of the board of health.

Appellant paid his dues till August, 1860. On May 15, 1861, he assigned to the plaintiff the six shares on which he had obtained no loan, and received a credit of $308.15 for them upon the books of the association, to which he was indebted, at the date of the payment, $302.50. After that date he wholly ceased to make any payments. His shares were forfeited, and the deed of trust foreclosed by order of the board of directors, by a sale which took place on April 5, 1852. The net proceeds of this sale were $126.11. The property was purchased at the sale by plaintiff.

Nothing further was done in the matter on either side until 1866, when plaintiff, having expended $1,005 on the real estate for taxes and charges, a portion of which were a lien when it bought the land in at the sale under the deed of trust, and being unwilling to spend any more money upon the lot, sold it, at the instance of defendant, for $1,100, to his brother-in-law, Nischuitz, who owned the adjoining piece of ground.

In July, 1867, a meeting of stockholders of plaintiff was held, at which time it was resolved that the loan committee should collect, and divide amongst the stockholders, the assets of the association, the shares of stock having reached $200. The loan committee consisted then of the president, secretary, and treasurer. The secretary, who was much urged by stockholders to take action in making this collection, saw the president and treasurer in regard to the matter just before suit was commenced, and was then directed to commence the suit in the name of the corporation, although there was no formal meeting of the committee as such, and no formal resolution or entry in regard to the matter in the minute-book, or otherwise. The petition in the cause was filed on May 18, 1871. On the trial, defendant swore that, at the time that plaintiff, at defendant's instance, conveyed the lot mentioned to Nischuitz for $1,100, it released defendant from all further liability on his bond. But, in this he is directly contradicted by the officers of the company, with whom he says the transaction was had, and no circumstances appear which corroborate the view which he seems now to take of what passed between them at that time.

The jury found a verdict for plaintiff in the sum of $3,400, with interest from commencement of the suit, upon which judgment was entered for $3,400, the penalty of the bond sued on, with interest from the commencement of the suit, amounting to $306, making in the aggregate the sum of $3,706 for its damages, ““together with costs.” A motion for a new trial, and in arrest of judgment, were at once filed. These motions were taken under advisement, and, at the next term, the plaintiff entered a remittitur of $1,397.68.

The motions were then overruled, and judgment then and there entered anew for plaintiff, in the following form:

“Now at this day the plaintiff, by attorney, freely remits the sum of one thousand three hundred and ninety-seven dollars and sixty-eight cents, part and parcel of the judgment heretofore entered in this cause, on 19th November, 1872, and the cause having been submitted to the court upon the pleadings herein and the proofs, the court doth find the issues for the plaintiff, and that the damages herein amount to the residue of said original judgment. It is, therefore, considered by the court that the plaintiff recover of the defendant the sum of three thousand four hundred dollars, the penalty of the bond sued on in this cause, and, also, its costs and charges herein expended, and have execution for the sum of $2,308.32, and costs aforesaid.”

To the overruling of these motions, and the entry of this judgment, defendant excepted, and the cause is brought here by appeal.

1. It is contended by appellant that, because the board of directors never expressly, by resolution, authorized the commencement of this suit, and, inasmuch as the charter of respondent provides (sec 17) that “if monthly dues and interest be suffered to remain unpaid more than three months, the directors may compel payment of the principal and interest, ordering proceedings on the bond and mortgage according to law,” therefore this suit was commenced without proper authority, and should be dismissed. We do not think so.

The loan committee appears to have been authorized to collect all outstanding amounts due the corporation, and could, undoubtedly, use the name of the corporation in any suits necessarily commenced to effect this object. The suit was commenced by direction of this committee. A consent of a majority of the board of directors was not necessary under the circumstances of this case.

Nor do we agree with counsel for defendant in thinking that this corporation is shown to have been dissolved, or that there were no officers competent to act. The acts of the officers of a corporation irregularly elected are...