Globe Building & Loan Co.'s Assignee v. Spillman

Opinión op the court by CHIEF JUSTICE PAYNTER Reversing. In the fall óf 189B the appellee Sophia Spillman subscribed for ten shares of stock in the Globe Building & Loan Company. It was to be paid for in monthly payments of $6. In May, 1894, she borrowed from thie company, $800, agreeing to pay $S per month interest therefor, and to secure which «ble gave a mortgage on real property in Soottsyille, Ky. From the time she borrowed the money her weekly payments were to be $14, $6 of which was paid on [158] stock and $8 on interest. In the fall of 1896 she concluded to pay the debt, but in doing so she .desired it should credit h'er with all the payments which she had made it either on stock or interest; in other words, she desired all the payments which she had made should be applied as partial payments on the debt. The company’s attention seems to have been first called to her desire to settle the debt by a letter which her husband wrote to it on November 25, 1896. In this letter he said that she desired to settle the debt, and wanted a tabulated statement showing the amounts that 'had been paid on it. He said that she desired to know the “amount of the dividends, and in fact all the transactions.” On March 24, 1S97, he again wrote the company that his wife desired to pay the $800, and claimed that on March 1, 1897, there was due it $406.38, and said that, the amount was ascertained by taking the $800 principal with six per cent, interest from date otf loan, and applying the several payments as credits thereon. He said that she was ready to pay the amount and surrender the stock. The company made him, a statement Which showed that the amount due it was much more than claimed by him.' The company, in answer to his letter of March 24th, wrote him that it had been referred to its attorneys, Sims & Covington, Bowling G-reen. Spillman, representing his wife, seems to have bad an interview with the attorneys, and made them substantially the same offer that he had made the.company in Ms letter. He never tendered the money either to the attorneys of the company or to it, nor did he ever actually tender the stock, except in the manner stated. At this time it was a going concern. The appellee does not seem to have taken any further steps with reference to the settlement of.-the debt. The company [159] shortly afterwards appeared to be insolvent, and: made an assignment. The question to be determined is whether or not in the settlement of this transaction between the company and Mrs. Spillman it should be settled as if it were a going or insolvent concern. If it is to be made with it in its present insolvent condition, then the case of Association v. Reed (110 Ky., 874), (23 R., 342), (62 S. W., 1020), must control. It was held in ' that case that, after a building and loan association has made an assignment for creditors, it is too late for the borrowing stockholder to 'have payments made by him on his stock subscription applied as credits on his loan, though they would have been sufficient to extinguish the debt in that way prior to the assignment. If the proposition which was made before the assignment, which we have detailed, operates as an application of all payments as a credit upon the debt and as a cancellation of the stock, then Mrs. Spill-man, while it was a going concern, acquired the right to have the court settle her rights as if the company were a new’ and going concern. In the Reed case the court said: “It' was not until after the assets of the company were in the hands of the assignee for administration that any effort was made to have a different application of the payments. It was then too late.” By the use of the language the court was simply stating the facts of the case, and was not determining what kind of effort made by him before the company assigned would entitle a borrowing member, after the assignment, to settle with the company as if it were a going concern. There was no such tender as would stop the running of hhie interest upon the debt. No money was .ever tendered the company in payment of its debt. No actual tender of the stock was ever made. It was sim [160] ply a general statement made by the husband of Mrs. Spill-man that she was willing to settle the debt upon a certain basis, which meant the surrender of the stock and the application of the money which had been paid therefor as a credit upon the debt which she owed the company. Instead of actually tendering the amount which she claimed she owed and the stock which slhe held, she let the matter drift along until the association made an assignment. The company could not, by reason of the effort which had been made by the husband for his wife, have compelled her to have surrendered her stock, and treated the debt as matured. 'It could not have gone into court and enforced a settlement -according to the offer of Spill-man. It seems to us the company was never called upon to act, and the appellee was never entitled to have any part of the- amount which she had paid on her stock subscription applied as a credit upon her debt before the association made an assignment. We are therefore of the opinion that this debt should be settled upon the principle enunciated in the Reed case, which is a settlement with am assigned estate. The judgment is reversed for proceedings- consistent with this opinion.