Montpelier examiner. [volume] (Montpelier, Idaho) 1895-1937, 1897-03-31
About Loan Companies.

John r. Sawtelle VS.. the North Ameri-
can Loan and Building company, reverse
ing the judgment of the court below,
and remanding it back with instruc-
tions to modify the findings and to dis
pose Of it III accordance with the opin-
ion.
The defendant corporation is organ
lied under the laws of Minnesota, and
for some time past has been doing bust
ness in this state.
Charles j. Humphries residing at
Ogden, subscribed for seventeen shares
oil stock in December, 1891, receiving
certificate therefor the following April.
According to contract, and to be in
harmony with the bylaws of the associ-
alton, HUMPHREYS was to pay sixty
cents dues monthly on each share
making a total of $40 .20-until the pay
ments, together with the profits, aris-
ing from interests on loans, premiums,
etc., would amount to 500 share, or
III the aggregate SLIGO.
HUMPHREYS procured loan of $3.50 on
these shares from the corporation, Civ
ing as security his promissory note and
mortgage upon certain real property.
In addition to this he transferred to the
company Be shares of his stock as a
premium for the loan and as further
security assigned the other 81 shares of
collateral security.
By the contract he was to pay an in.
terest at the rate of six per cent. per
annum on the borrowed money, and to
also continue paying his dues and in
terest until the stock matured and was
worth 800 per share, after which it was
to be received by the building society in
satisfaction of the loan.
Some time later HUMPHREYS sod the
mortgaged property to Sawtelle, who
assumed all the indebtedness, agreeing
to pay the same of in accordance with
HUMPHREYS contract.
When Sawtelle bought the property
he claims to have no knowledge of the
effect OF the provisions Of the mortgage.
aud was not aware that the stock had
been absolutely assigned over to the
company, He continued paying the
interest and dues until time when the
dues paid amounted to 1867 20. He
then notified the company that he in
tended to pay off the loan, at the same
time claiming the right to apply the
amount paid in dues to the mortgage
indebtedness. He rendered $500 as the
balance due. The corporation refused
to accept this, for the reason that only
one half of the dues could be applied,
because OF HUMPHREYS assigning half Of
the stock. sawte1le then instituted
proceedings to compel it to cancel the
mortgage, pleading the tender Of the
5000, which he deposited with the clerk
of the Second district court.
The defendant filed an answer and a
cross complaint, asking that it be allow
ed to foreclose the mortgage. The
matter was heard before Judge Rolapp.
who dismissed the plaintiffs cause of
action, giving judgment for defendant in
the sum of S626,70, from which plaintiff
appealed.
There are number Of errors assigned
III the appeal, the principal one being
on+he application of the payments on
the stock procured by HUMPHREYS. The
court holds that the 1867 20 paid as
dues must be applied in reduction of the
debt.
Referring to the contract made he.
tween the corporation and HUMPHREYS.
the court sags.
This KIM OF contract for the Loan
ing OF money is not such as to commend
itself to the special favor of n court of
equity, and while it is not necessary
and is not our intention, to pass unon
its validity in this case, under the laws
OF Utah, as between member and the
corporation, still it is important to
notice the results which would flow from
specific performance of it. to see
whether its literal enforcement against
one who is not member of the cornora-
ton, and at time when he undertook
to pay the loan, had no knowledge of
The effect OF its provisions, would be
justified upon any question of ca uitv.
Its complete performance would REQUIRE
and such appears to the contention of
the corporation, the payment of 1920
dues and "a rs interest per month, with
such fines and penalties as might be
assessed, for period of nine years. or
until the seventeen shares of stock be-
came worth 700, or, in other words.
the borrower is to repay the $3.50 loaned,
with T. | er cent. interest, payable
monthly, and an addition thereto, give
the corporation bonus of $3.50, or in