Case ID: ohio-st_31/html/0517-01.html
Source: Caselaw Access Project
Author: {"author": "\n      White, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

A. B. Risk v. Delphos Building and Savings Association.
    In an action brought by a building association against a member, on a mortgage given to secure the payment of weekly dues, and the installments of interest on an advanced loan, the taking of the account, preliminary to an order of sale, should be limited to the amount of dues and interest that had accrued at the time of rendering the decree.
    
      Hagerman v. Ohio Building and Savings Association (25 Ohio St. 187); and the Forest City United Land and Building Association v. Gallagher (id. 208), approved and followed.
    Motion for leave to file a petition in error to reverse the judgment the District Court of Allen County.
    The original action was instituted in the Court of Common Pleas of Allen county, by the defendant in error, a corporation, against the plaintiff in error, A. B. Risk, to foreclose a mortgage on certain real estate. The plaintiff’ • in error was the owner of seven shares of the stock in the association, the par value of each share being two hundred dollars. On this fourteen hundred dollai’s of stock, he received an advanced loan of eleven hundred and ninety-three dollars and fifty cents; and to secure the liability arising therefrom, he executed to the association the note and mortgage on which the suit was brought.
    The following is a copy of the condition in the mortgage : “ Provided, nevertheless and these presents are upon this condition : That whereas the said Abner B. Risk has executed and delivered to the Delphos Building and Savings Association aforesaid, his note of even date herewith for the sum of fourteen hundred dollars, upon the following conditions : said Abner B. Risk being a member of said association, and having at a regular meeting of the said association, on the eleventh day of September, A. D. 1875, bid a premium of twenty-nine dollars and fifty cents per share of stock for precedence in taking an advanced loan, and having thereby obtained said precedence, and having received from said association an advanced loan of fourteen hundred dollars, the full value of seven shares of stock of said association, on each of which seven shares of stock he agrees to pay a weekly installment of twenty-five cents, in all one dollar and seventy-five cents, and on fourteen hundred dollars the amount of said advanced loan exclusive of premium for precedence, he agrees to pay interest at the rate of six per cent, per annum, in equal monthly payments of seven dollars each, on the first Saturday of every month until said association shall be dissolved as provided in the by-laws of said association, the taxes on the premises conveyed by these presents, the fire insurance premium on said property, ground rents thereon, and all fines and forfeitures, according to the constitution and by-laws of said association.
    “Now, if the said Abner B. Risk shall punctually pay to said association, its successors and assigns, the said weekly installments on said seven shares of stock, and the interest as above stated, the taxes on the property conveyed by these presents, the fire insurance premium on said property, the ground rents thereon, and all fines and forfeitures, according to the constitution and by-laws of said association, then these presents shall be void.”
    The only breach alleged in the petition is the failure of the moi’tgageeto pay the weekly dues and the installments of interest for the period of twenty-five weeks.
    No answer having been filed in the court of common pleas, judgment was taken by default.
    The amount found due the plaintiff was six hundred and thirteen dollars and seventy cents; and on default of payment the mortgaged premises were ordered to be sold.
    The’judgment was affirmed in the district court, and it is now sought to obtain the reversal of these judgments.
    The principal error assigned is that judgment was rendered for more than the plaintiff was entitled to recover.
    
      Isaiah Pillars, and John King, for the motion.
    
      B. J. Brotherton, and Cunningham Brotherton, contra.
   White, C. J.

The judgment must be reversed.

It is true, as claimed by counsel for the defendant in error, that there is no bill of exceptions bringing into the record the rules adopted by the association for conducting its business. But the petition contains sufficient data to show that the account between the parties was taken upon a wrong basis.

The authority of these associations under the statute was fully considered in Hagerman v. Ohio Building and Savings Association (25 Ohio St. 187), and in The Forest City United Land and Building Association v. Gallagher, (id. 208); and from the principles laid down in these cases we are not inclined to depart.

It was there declared that on the breach of the condition of a mortgage given to secure the payment of dues, interest on loans advanced, and fines, the decree in an action to foreclose should be confined to the amount of such dues, interest, and fines then due and unpaid. It was also, held that the association is not authorized to charge interest on the premiums allowed for precedence in taking loans, but that the money actually advanced is the basis for the computation of interest.

In the present case the default alleged consisted in the non-payment of the weekly dues for the period of twenty-five weeks, and the failure to pay the monthly installments of interest on the money advanced by the association.

The sum advanced was $1,193.50. It is quite clear that the monthly installments of interest on this sum at the rate of six per cent, per annum, and the weekly installments of $1.75, being the dues on the seven shares of stock, did not constitute the basis on which the account was taken.

As fhe only default charged related to the amount owing to the association for dues and interest, these items should have formed the basis for ascertaining the amount then due the association, for non-payment of which an order of sale might be issued.

The mortgagees would have the right, by paying the amount thus found due, to prevent a sale of the property. Should he fail to make such payment, and the mortgaged property be converted into money, other considerations than those relating to the amount then due would arise in making an equitable distribution of the funds between the parties. Hagerman’s case, sufra, on page 206.

The case of the Licking County Saving, Loan, and Building Association (29 Ohio St. 252) is cited by counsel for defendant in error as supporting the judgment of the court of common pleas in the present case.

The only question in that case was as to the terms upon which, under the by-laws, the legal representatives of a deceased borrowing member might withdraw from the association, and discharge themselves from all future liability.

It was held that in order to be entitled to such discharge, the representatives of the deceased member, upon the true construction of the by-laws of that institution, must refund the money actually received from the association, and also pay the premium bid for obtaining it. The sense in which the term “loan” was used in that particular instance was to be determined from the by-laws, and did not depend upon the sense in which the term is used in the statute. The two cases first above cited relate to the meaning of the term as used in the statute authorizing the creation of these institutions; and the principles declared in'these cases are unaffected by the decision in the case of the Licking County Saving, Loan, and Building Association.

Leave granted; judgments of the district court and of the common pleas reversed, and cause remanded to the common pleas court for further proceedings.