Building and Loan Association v. McNally

November 6, 1914. The opinion of the Court was delivered by There is at issue only $121.00. The printer's bill will amount to one-half that amount.

The master found against the defendant, as did the Circuit Court, and now the defendant appeals here; and this is the second appeal, though the first appeal was by the plaintiff.96 S.C. 38, 79 S.E. 796.

The action is one for foreclosure of a mortgage. It is conceded that plaintiff is entitled to a judgment for foreclosure for $456.67, and attorney's fees, whereas plaintiff claims judgment for $624.05 and attorney's fees. The exceptions are five, but the issues are only two by appellant's admission: (1) The defendant claims a credit of $60 which was disallowed, and which now amounts to $121.00; (2) the defendant denies to the plaintiff's attorneys interest on their fee of ten per cent, on the recovery, which fee is stipulated in the bond, and is reasonable.

The only testimony is (1) the book issued by the Building Loan Association to defendant called the pass book; (2) three bonds, executed to the plaintiff by defendant, to wit: 10th September, 1900, penal sum of $400.00; 17th June, 1903, penal sum of $200.00; 9th August, 1904, penal sum of $400.00; (3) sections 3 and 8 of Article II of the laws; sections 1 and 3 of article V of the by-laws; section 2 of article VIII of the by-laws.

The defendant testified that the entries in the pass book contained all the credits claimed; he testified naught else, and there was no other witness. The testimony does not show it, but it is a part of the history of the State that the treasurer of this association defaulted, and there is no one now to explain his books, or this pass book.

The pass book shows that in January, 1897, the defendant became the owner of five shares of the plaintiff's capital stock, of $200.00 per share; and that in each month thereafter he paid $1.00 per month on each of the five shares through 1898; and that the last payment on stock was made April, 1907; and that then, at the end of ten years and three months, the defendant had paid in on his stock subscription $575.00, or $425.00 less than its par and maturing value.

The pass book also shows, that the defendant first became a borrower from the association in October, 1900; he got then $200.00, and that is evidenced by the first bond above recited; he borrowed, also, in July, 1903, $600.00, and that is evidenced by the second bond above recited; he borrowed, also, in September, 1904, $200.00, and that is evidenced by the third bond above recited. The notation on the book of the three several loans is meagre; it consists only of the numerals preceded by the dollar character, on a line with the other entries of that month.

The bonds do not declare what rate of interest the defendant agreed to pay upon the loans made to him; nor does the pass book; but it does otherwise appear, sec. 3, art. V of the by-laws, fixes the rate at six per cent.

The pass book shows that up to the time of the first loan, October, 1900, the defendant paid $100 per share on each of his five shares, and the book denominates that at the top of the first column "installments."

So much is plain. The defendant had up to that time been an investor, and had laid away $5.00 every month, a total of $200.00, the exact amount he borrowed.

The book contains two other columns, one, or the second, is denominated "interest." and the other, or the third, is denominated "premiums." Thus:

---------------------------------------------------------- Date | Installments Interest | Premiums ----------------------------------------------------------

In October, 1900, and for the first time, entry was made in the "interest" and "premium" columns; it was then the defendant borrowed $200.00.

Therein, for interest, was written $1.00, and for premium was written .70. Thus:

----------------------------------------------------------------------- Date | Installments | Interest | Premium | $200.00 (marked in October, 1900 | 5.00 | 1.00 | .70 | pencil) -----------------------------------------------------------------------

One month's interest on $200.00, at 6 per cent., is $1.00. There is no parol testimony to explain "premium," but it is explained in sec. 1, art. V of the by-laws. There is no contention by defendant that he was charged a usurious rate of interest upon the loan; the right of the association to charge interest and premium is not gainsaid.

The book carries these two items of $1.00 and .70 in appropriate columns up to June, 1907. In the month of June, 1901, the book reads thus:

----------------------------------------------------------------------- Date | Installments | Interest | Premium | $400 (written in pencil June | 5.00 | 3.00 | 1.20 | and pencil out) -----------------------------------------------------------------------

And it so runs through May, 1903, a period of twenty-four months.

This marginal entry of $400.00 is made the same as were the three other marginal entries for loans, but which other three are evidenced by the bonds sued on, save a pencil mark is not run through the other three entries, as it is through this.

Thereafter, that is, for twenty-four months after June, 1901, the interest column carries an entry of $3.00 and the premium column carries an entry of $1.20.

The interest, therefore, is three times what it was before; that is to say, before it was six per cent. on $200.00, while after it was six per cent. on $400.00.

But the premium is not three times what it was before; and the reason is, the premium was arbitrary under section 1, article V of the by-laws; it was fixed by the offer of the highest premium bid for redemption (sec. I, art. V, by-laws).

The exact contention of appellant is, that the increase of the interest by $2.00 and the increase of premium by 50 cents, for 24 months after June, 1901, amounts to $60.00; and such increased payments must be applied as credits upon the bond indebtedness sued on; that there is no evidence any other loan upon which these payments may be credited.

The respondent contends, that there was a loan of $400.00 in June, 1901, that these payments should be applied to it, and that loan is not now in issue, but is out of the case.

It is true no witness has sworn to respondent's contention; and no witness has sworn that the $400.00 was not borrowed in June, 1901; the issue of fact must, therefore, be determined by the circumstances of the case. Method is always a circumstance from which a conclusion may be drawn.

In the three unquestioned instances wherein the defendant did borrow money, or "redeem his shares," to use the curious and inapt language of the by-laws, that is to say $200.00 in October, 1900, $600.00 in July, 1903, and $200.00 in September, 1904, the numeral and character therefor were entered in the margin of the book in pencil; and in each instance the entry in the interest column was increased at the rate of six per cent., and the entry in the premium column was arbitrarily increased, dependent upon the "bid" for redemption.

In the questioned instance, that of June, 1901, the same circumstances appear; the inference is that in June, 1901, there was a loan of $400.00; that the interest and premium were paid on it for twenty-four months; that the payments thereafter ceased, and other and different methodical payments commenced; that, therefore, the $400.00 was in some fashion paid.

The circumstance that a pencil mark was drawn through the $400.00 marginal entry strengthened this conclusion.

At all events, the circumstances do not warrant the conclusion that the increased methodical and periodical payments of twenty-four months were made to be credited on the $200.00 loan of October 2, 1900.

We conclude this issue of fact for the respondent. On the other issue, that of interest on attorney's fees, there need not be much said.

The judgment is dated 19th January, 1914; it was for the balance due on the mortgage debt and ten per cent. thereof for attorney's fees. The amount was found by the master to be reasonable, and in that we concur. It was a part of the judgment, and bears interest like the other part of the judgment.

The decree below is affirmed.