Sullivan v. Ferryall

• Decision Date: 30 July 1897
• Citation: 69 N.H. 192,44 A. 109
• Parties: SULLIVAN v. FERRYALL.
• Court: New Hampshire Supreme Court

44 A. 109

69 N.H. 192

SULLIVAN

v. FERRYALL.

Supreme Court of New Hampshire. Hillsboro.

July 30, 1897.

Bill to foreclose a trust deed, filed by W. K. Sullivan, as receiver of the American Building, Loan & Investment Society against Abram Ferryall. Case discharged.

Bill in equity for a foreclosure and sale under a trust deed. Facts found by the court. The American Building, Loan & Investment Society, of which the plaintiff is receiver, was a foreign corporation, and did business in this state. Its capital stock was divided into shares of $100 each, issued in monthly series. Shareholders were required to pay 75 cents per month upon each share subscribed for by them. If they continued these payments for 78 months (6 1/2 years), the shares matured, and they were entitled to receive $100 for each share held. A shareholder was entitled to borrow $100 from the society for every share of stock he owned by giving a satisfactory note therefor, secured by a first mortgage on real estate. April 1, 1890, Mrs. Ferryall, the owner of 22 shares, upon which five monthly payments had been made, borrowed of the society $2,000, and executed the trust deed in question, conditioned to pay the society $2,311.91, evidenced by 73 promissory notes of $31.67 each. Each note was made up of two items,—one of $16.67, the Interest at 10 per cent. for one month on $2,000; and the other of $15, the amount due monthly on 20 shares of stock at 75 cents per share. On December 1, 1891, Mrs. Ferryall conveyed the real estate to the defendant, subject to the mortgage under consideration. In 1894 the society became insolvent, and the plaintiff was appointed receiver. At this time 40 of the 73 notes had been paid, representing $1,266.80. The defendant claims that he should be allowed to redeem upon payment of the other 33 notes and the bill for insurance. The plaintiff claims that the insolvency puts the matter upon an equitable basis, and that the part of the notes paid, which represent the monthly dues, should not be regarded as a payment on account of the shareholder's loan indebtedness, except to the extent of the 20 per cent. dividends on the 22 shares which the society had declared. All other facts necessary for a consideration of the questions raised will be found in the opinion.

George B. French and Collins & Fletcher, for plaintiff.

Charles W. Holtt, for defendant.

PIKE, J. The instrument under which the plaintiff claims, although called a "trust deed," is in fact a mortgage. The relief sought is a foreclosure of the defendant's rights under it if he does not pay the sum found to be due the plaintiff within a time to be limited in the decree. The controversy relates to the sum that is due the plaintiff by the terms of the deed. The deed sets forth that the grantor is justly indebted to the American Building, Loan & Investment Society of Chicago in the sum of $2,311.91, "the same being the principal, interest, and premium of a loan from said society" made and accepted "under the provisions" of its by-laws (which are part of the contract), and evidenced by 73 promissory notes of even date, signed by the grantor, and payable to the society at its office in Chicago, one on or before the last Saturday of each and every month, beginning with a month named, until all are fully paid, together with all fines assessed for nonpayment of any of them at maturity, as provided in the by-laws. By the deed the grantor covenanted and agreed to pay "the money and interest and premiums at maturity" (that is, the notes), and the fines accruing on the notes after maturity; to keep the buildings insured against loss by fire for the benefit of the grantee, and to its satisfaction; to pay all taxes, assessments, rates, and other charges upon the property, and remove all adverse claims and incumbrances upon it; to repay all advances for insurance, taxes, rates, redemption from sales for taxes, or anything else made by the grantee to protect the security; to do whatever may be necessary to collect insurance in case of loss; and to do nothing or suffer nothing to be done, whereby the property shall be diminished in value, or the insurance shall be vitiated or affected. It is further provided that, if default shall be made in the payment of any of the notes or of the fines accruing for the nonpayment thereof at maturity, or if there shall be waste, or nonpayment of taxes or assessments, or if there shall be neglect or refusal to keep the property insured in suitable companies in a sufficient sum to protect the indebtedness, or to keep the improvements upon the property in good order and repair, or if there shall be a breach of any covenant or agreement contained in the instrument, or a failure to duly observe and keep the by-laws of the society, then "the whole of the said principal sum, interest, premiums, fines, dues, and costs shall at once become due and payable, at the option of the said society, or its assigns, or the legal holder or holders of said notes," and upon the application of any of them it shall be lawful for the said grantee, or its successors in trust, or any authorized officer or agent of said society, to enter and take possession of the property, and collect the income thereof, and,...