Stevens v. Home Savings & Loan Ass'n

• Decision Date: 14 January 1898
• Citation: 5 Idaho 741,51 P. 779
• Parties: STEVENS v. HOME SAVINGS AND LOAN ASSN
• Court: Idaho Supreme Court

51 P. 779

5 Idaho 741

STEVENS v. HOME SAVINGS AND LOAN ASSN

Supreme Court of Idaho

January 14, 1898

USURY.-When the complaint shows that the cause of action is based upon a usurious contract the principal of which has been fully paid a general demurrer to such complaint should be sustained.

PRACTICE-COUNTERCLAIM.-A cause of action arising out of the transaction set forth in the complaint as the foundation of the plaintiff's claim or connected therewith, in favor of the defendant, must, to avail such defendant, be set forth in the answer as a counterclaim, and cannot be made the basis of another suit brought by the defendant against the plaintiff in the former suit.

MULTIPLICITY OF SUITS.-Sections 4183, 4184 and 4185 of the Revised Statutes of Idaho are intended to prevent multiplicity of suits and to settle all controversies and causes of action between the parties which arise out of, or are connected with the transaction upon which the plaintiff's action is founded.

RIGHT OF TRIAL BY JURY.-In a suit brought by a mortgagee to recover the statutory penalty for failing to discharge of record a mortgage which has been fully satisfied, the parties or either of them have an absolute right to a trial by jury.

BUILDING AND LOAN ASSOCIATIONS-SUBJECT TO PENALTIES OF USURIOUS CONTRACTS.-A building and loan association loaned money to one of its stockholders, and the contract provided for monthly payments to be applied in "premium for precedence" and on interest. Held, in determining whether the contract is usurious or not, the so-called "premium for precedence" must be regarded as interest, and that building and loan associations are subject to the penalties provided in cases of usurious contracts.

(Syllabus by the court.)

APPEAL from District Court, Latah County.

Reversed and remanded, with instructions.

George W. Goode, for Appellants.

There is no showing of merits or answer tendered. In order to open or vacate a default he must show to the court a good defense to the action. (6 Am. & Eng. Ency. of Pl. & Pr. 181, 182; People v. Rains, 23 Cal. 128; Gibbons v. Scott, 15 Cal. 285; Reese v. Mahoney, 21 Cal. 306; Bailey v. Taafe, 29 Cal. 423; Nevada Bank v. Dresbach, 63 Cal. 324; Winninghoff v. Wittig, 64 Wis. 180, 24 N.W. 912; Harsh v. Morgan, 1 Kan. 293.) Neither the common law nor any statute has ever authorized the consolidation of cross-actions because from their very nature they cannot be joined in one action. (4 Am. & Eng. Ency. of Pl. & Pr. 696, and note a.) The court refused to grant appellant's a jury trial. (State Const., art. 1, sec. 7, art. 5, sec. 1.) Under the constitution every issue of fact in a civil case (as well as criminal) must be tried by a jury, unless the same is waived by the parties, and especially in cases of this nature where fraud is alleged and damages claimed. (Proffatt on Jury Trials, sec. 89; Taylor v. Person, 2 Hawks (N. C.), 298; Faulk v. Faulk, 23 Tex. 653; Brown v. Burke, 22 Ga. 574.) And under the former equity practice appellants would be entitled to a jury trial. (Proffatt on Jury Trials, secs. 91, 92; Pomeroy's Equity Jurisprudence, secs. 116, 345, 459; Daniell's Chancery Practice, 1090; note to Lee v. Tillotson, 24 Wend. 337, 35 Am. Dec. 624, 626; Flint River S. B. Co. v. Roberts, 2 Fla. 102, 48 Am. Dec. 188; Scott v. Nichols, 27 Miss. 94, 61 Am. Dec. 503.) The court erred in its findings of fact, conclusions of law and decree for the reason that this was a usurious loan from the beginning. In this case the premium provided for in the agreement is undoubtedly interest under our statute. (Code, sec. 1263 et seq.; 4 Am. & Eng. Ency. of Law, 2d ed., 1056, 1067, 1068, 1071 et seq.; Mills v. Salisbury Bldg. etc. Assn., 75 N.C. 292.)

Forney, Smith & Moore, for Respondent.

The matters in litigation in the two actions consolidated were identical. The respondent could not set up its foreclosure in the cancellation case, because new parties were required to be brought in. The defense to the foreclosure case, with denials, if maintained, would have entitled appellants to everything asked for in the original cancellation case. On consolidation, where two cases involve the identical points and subject matter, see Lincoln-Lucky & Lee Min. Co. v. Hendry, 9 N. Mex. 149, 50 P. 330. The right of a jury trial in this state was never granted in mortgage foreclosure cases. The code and constitution fix it. (Idaho Rev. Stats., secs. 4369, 4405, 4406 et seq.; Idaho Const., art. 1, sec. 7; also art. 5, sec. 1.) Premiums for precedence are not interest. (Thompson on Building and Loan Associations, p. 74, secs. 21, 22; 2 Endlich on Building and Loan Associations, secs. 13, 19, 399.) As to contracts with building and loan associations: Roberts v. Building etc. Assn., 62 Ark. 572, 54 Am. St. Rep. 309, 36 S.W. 1085; Bank of Newport v. Cook, 46 Am. St. Rep. 200 (collating cases); 2 Am. & Eng. Ency. of Law, 620-622; Idaho Rev. Stats., secs. 2796-2805 (especially 2801); Setliff v. North Nashville Bldg. etc. Assn. (Tenn.), 39 S.W. 546; Black v. Thompkins, 63 Ark. 502, 39 S.W. 553.

QUARLES J. Sullivan, C. J., Huston, J., and Quarles, J., concurring.

OPINION

QUARLES, J.

On the 1st day of June, 1892, De Wit Stevens, Ida E. Stevens, and G. G. Stevens, three of the appellants here, made and entered into a contract with the Home Savings and Loan Association of Minneapolis, Minnesota, a corporation, the respondent here, in words and figures as follows, to wit:

"$ 2,500. . Tacoma, Washington, June 1, 1892.

"Received of the Home Savings and Loan Association of Minneapolis, Minnesota, twenty-five hundred dollars, as a loan on twenty-five shares of stock, No. 5,923, owned by us in said association. We, G. G. Stevens and De Wit Stevens and Ida E. Stevens, his wife, agree to pay to said association on the first day of each month, at the office of the association, Tacoma, Washington, thirty-seven and 50/100 dollars, which shall be applied as follows: 1. To the payment of any fines or other assessments made against us in pursuance of the by-laws of said association; 2. To the payment of the premium for precedence due on said loan, amounting to eight and 75/100 dollars per month; 3. To the payment of the interest due on said loan, amounting to twelve and 50/100 dollars per month; 4. The balance of said payments shall be credited as dues on said stock. Said payments shall be continued until the dues so credited on said stock, together with the dividends declared thereon, shall equal the amount loaned. Should we fail for twelve weeks to pay said monthly payments, then the whole amount on said loan shall at once become due and payable.

(Signed)

"DE WIT STEVENS.

"IDA E. STEVENS.

"G. G. STEVENS."

On said day the appellants above named, to secure the repayment of the loan mentioned in this contract, executed, acknowledged and delivered to the respondent a mortgage upon lot No. 8, in block No. 8, of the town of Moscow, which mortgage was duly recorded. January 4, 1896, the said mortgagors commenced their action in the district court of the second judicial district in and for Latah county, alleging in their complaint the execution and recording of the said mortgage; that they had fully paid off and satisfied the said mortgage, and that the respondent, after demand made upon it to satisfy said mortgage, failed and refused, and still fails and refuses, to satisfy said mortgage of record; and demanded judgment that said mortgage be adjudged satisfied, and that plaintiffs recover the statutory penalty of $ 100 provided by section 3364 of the Revised Statutes. To this complaint the respondent answered, and denied the satisfaction of said mortgage, and alleged that the sum of $ 802.91 remained due on the mortgage debt, and demanded judgment "that plaintiffs' cause of action be dismissed; that plaintiffs take nothing thereby; that defendant have judgment against plaintiffs for its costs and disbursements; that the defendant have such other and further relief as to the court seems meet and just in equity." January 31, 1896, the respondent commenced an action against the appellants above named and G. W. Stevens and Lydia E. Stevens to obtain a judgment foreclosing the said mortgage, alleging that there was then due on said mortgage debt the sum of $ 802.91. The ninth paragraph of the complaint is in the following words and figures, to wit: "That the amount of fines and other assessments made against the said last-named defendants, made in pursuance of the by-laws of the said Home Savings and Loan Association, from the said first day of June, 1892, to and including the twenty-second day of January, 1896, amounted to the sum of $ 159.96, no part of which has ever been paid, save and except the sum of ten dollars; that the premium for precedence due on said loan, to and until the twenty-fifth day of January, 1896, amounted to the sum of $ 278.25, no part of which has ever been paid, save and except the sum of $ 157.50; that the interest on said loan from June 1, 1892, to January 22, 1896, amounted to $ 295.50, no part of which has ever been paid, save and except the sum of $ 225; that no part of the principal of said loan has ever been paid, save and except the sum of $ 2,191.30; that the membership fee in said association, amounting to twenty-five dollars, has never been paid; that the plaintiff had paid insurance premiums upon policies covering the buildings upon said premises to the amount of twenty-six dollars, no part of which has ever been repaid to plaintiff." To said complaint the appellants filed their demurrer, assigning three grounds: 1. That the complaint does not state facts sufficient to constitute a cause of action; 2. That the court has no jurisdiction of the persons of the defendants;...