Barker v. Bigelow

Dewey, J.* The decisions of this court in the cases of Merrill v. McIntire, 13 Gray, 157, and Baxter v. McIntire, 13 Gray, 168, that a bond like those in the present case is a valid bond, and that its performance may be enforced by an action upon it, or by an action .to foreclose a mortgage given to secure the same sum, seem to leave nothing further open in the present case but the amount for which a conditional judgment is to be entered. Looking merely at the case as disclosed by the mortgage deeds, and the duties required of the mortgagor to prevent a breach of the condition thereof, the rule stated by the plaintiffs, that the conditional judgment should be for the sums unpaid for the monthly dues on the respective shares, and the monthly interest on the amount of money advanced to the defendant, and any fines that may have accrued under the articles of associationj1 all to be computed to the time of the judgment, and that the mortgages should stand as security for the future performance of subsequent liabilities secured thereby, would seem exactly adapted to this case. — 135 — But the defendant, who also asks that a conditional judgment may be entered, seeks to ’• ave the judgment entered at this time for such sum as will, if paid, forever acquit and discharge him from all further future liabilities. While it is conceded that the mortgagor cannot compel the mortgagee to receive payment at an earlier day than that stipulated in the contract entered into by the parties, it is insisted that, by force of the articles of the association of which both parties are members, or trustees representing members, the defendant has a present right to redeem his premises from the mortgages which he has given to the asso ciation. This right is said to result from the twentieth article oi association, and the subsequent amendment thereof. Under the rights secured by this article, the mortgagor, desir ing to redeem his premises from these mortgages to the association, gave the proper notice to the secretary, who brought the same before the board of directors, which board proceeded to decide the amount to be paid by the mortgagor to redeem the premises from the mortgages. This amount is made up of items fully stated by the directors, and made a part of the case before us. The mortgagor denies the correctness of this computation. It is conceded, on the part of the plaintiffs, that it embraces items beyond the amount of the loans to the mortgagor, and monthly dues and interest unpaid, adding as a charge to be paid by the mortgagor the sum of $ 235.07, under the charge of “ profit,” by which we understand a bonus to that amount is claimed for the privilege of withdrawal from all further liability to pay monthly dues, &c. The amount of payments for monthly dues not having as yet amounted to the sum borrowed of the association, the defendant cannot enforce his right to have his mortgages now discharged under the amended article added to article 20. He has pot paid the sum required by the directors. But he asserts that, having signified in due form his desire to redeem the premises, and his readiness to pay all such sums as are justly chargeable thereon, or proper to be paid before the same are discharged, he has the right to have the question of the amount to be paid fixed upon correct legal principles, and, upon failure of the — 136 — directors so to decide, to present that question to the court for revision. This is denied by the mortgagees, who insist that the right to discharge all dues, present and future, secured by the mortgages, is a mere privilege to be enjoyed by a literal compliance with the terms of the twentieth article, viz. paying the amount which the directors shall decide ought to be paid by the mortgagor. The question thus presented is by no means free from difficulty. In an ordinary contract for a simple loan, or obligation to perform certain duties at a future distant day, dischargeable at an earlier period only upon such terms as the mortgagee might prescribe, it might be properly urged that the court could not interfere. But we have thought it our duty to look at this case in a different light; and finding the provision for a full discharge of the mortgagor’s land from incumbrance of the mortgages, whenever he should desire to redeem the same, to be so fully and broadly recognized as one of the fundamental articles of the association, we are of opinion that this duty of the directors, in deciding the proper amount to be paid on such application to redeem, is not one to be exercised capriciously or under any assumption of unfounded liabilities, but that the basis of such computation must be the sum due from and properly chargeable upon the mortgagor. The system adopted by this association in reference to its members is very peculiar, and difficult to be fully understood or carried out. The mortgages do not in terms require the payment of the sum loaned, but that is incidentally secured by the payment of monthly dues and interest, which are required to be paid. The payment of monthly interest prevents any accumulation of the principal sum loaned, and the monthly dues required to be paid furnish the security for the discharge of the principal. Now, inasmuch as it is directly provided that, when the monthly dues paid amount to the sum loaned, and all arrearages of interest and all fines have been duly paid, the mortgages shall be considered satisfied and shall be discharged, we must understand that no further charges, such as have been claimed — 137 — in the present case, could be demanded as a condition precedent to the discharge of the mortgages, when the period shall have arrived that the monthly dues paid amount to the sum loaned. In the opinion of the court, the same rule should apply to the case of a member desiring to redeem his mortgage at an earlier period, as at the later, when the monthly dues will discharge it. If his interest has been punctually paid, the remaining claim against him to be discharged is the principal sum loaned. Toward payment of that, the mortgagor may properly apply the gross amount of all sums paid as monthly dues, computing the same as the amount may be at the time of the adjustment. But upon such payments of monthly dues the mortgagor can claim no interest, nor require any application of them to be made as payments at the time when received. They are not payments originally required or stipulated to be paid as payments toward any loan. They are paid as the capital of the company, and paid alike by those who do, and those who do not, take loans. Those who take loans may apply them, on the final adjustment of the loans, to the discharge of the loans, but they are to be applied in a gross sum and without any allowance for interest thereon. The amount thus paid as monthly dues, the fines and interest having been duly paid, is to be deducted from the amount of money loaned, and the balance made the basis upon which the mortgages may. be redeemed. These questions would have arisen more appropriately under a bill to redeem; but the parties have presented them in this form, and, being thus settled, they will also fix the amount for which a conditional judgment may be entered. We do not see any grounds for applying the moneys paid as entrance fees in discharge of the sums loaned. No provision to that effect is found in the article providing for discharging the mortgage, when the monthly dues shall be equal to the loan. These entrance fees are more properly applicable to the discharge of the ordinary expenses of the association, and are not properly to be considered a deposit or payment, to be aflerwards allowed to the member upon any future loan. — 138 — We have been referred to several English cases that have arisen under articles of somewhat similar associations. We have not thought it our duty to adopt to the full extent the views taken by the English courts and apply them to this case, the terms of the articles of association in the present case being, in our opinion, such as would authorize the mortgagor to redeem upon the principles we have above stated. Case to be referred to an assessor. The parties then agreed upon a supplemental statement of facts, in substance as follows: The sums advanced by the association to the defendant amount, without interest, to § 2,589.50. The amount of interest unpaid on the 4th of February 1857 was for one month, or $ 12.95. The monthly dues paid by the defendant amount to $ 962. The fines imposed by the eleventh article of association (nearly resembling article 9 of the Merrimack Association, 13 Gray, 159, note), for neglect to pay monthly dues on the defendant’s thirteen shares for six months, amount to S104; and this is all that the plaintiffs claim of the defendant in this case for fines, inasmuch as they contend that they had, though they did not and will not exercise, the right by that article to declare the share forfeited for his neglect to pay fines for that time. Upon these facts, two questions were submitted and argued by the same counsel: First, whether the monthly dues paid by the defendant were to be credited to him at the time of the account rendered to him by the directors on the 4th of February 1857, or at the time of entering the conditional judgment. Second, whether the defendant was liable for any, and if so, foi what, sum of money under the denomination of fines. Dewey, J. Upon the further questions submitted by the supplemental statement of facts, the court are of opinion that the gross amount of monthly dues paid by the defendant should be credited to him on the 4th of February 1857, and that no fines are proper subject of charges against him subsequently to that date, the defendant having previously signified his request to discharge his mortgages, and the plaintiffs on that day having — 139 — recognized that request by rendering him an account of all their claims against him. The details have since that period been the subject of controversy, and the result has shown that both parties were in error as to the amount justly due at that period. The amount due on the 4th of February 1857 will be ascertained upon the principles already stated, and interest upon that sum computed to the day of entering up this judgment; and this will be the sum for which conditional judgment will be entered, and upon the payment of which, with the costs of this suit, the defendant’s mortgages will be discharged. Conditional judgment for $ 1,640.45, with interest from February 4th 1857, and costs. Footnotes [*] Bigelow and Hoar, JJ. did not sit m this case.