Pacific States Savings, Loan & Bldg. Co. v. Green

Citations

• 123 F. 43
• 59 C.C.A. 167
• 1903 U.S. App. LEXIS 3966

Syllabus

<p>1. Building and Loan Associations—Contract with Borrowing Stockholder-Law Governing.</p> <p>Where the mortgage given by a borrowing stockholder in a building and loan association provides that payments thereon shall be made at the home office of the association, the contract is governed by the laws of the state in which such office is located, although the mortgaged property may be situated in a different state.</p> <p>2. Same—Validity—Premiums.</p> <p>Premiums paid by a borrowing stockholder in a building and loan association are not payments on the debt, but on his stock, of which he receives the benefit by reason of his dual relation to the association in the increased value of his stock and its consequent maturity at an earlier date; and the fact that by reason of his default, or the default of other stockholders, he fails to realize the benefits contemplated by the contract, does not render it unconscionable, nor authorize a court of equity to refuse to enforce it in accordance with its terms, in the absence of fraud, mistake, or undue advantage taken in its execution.</p> <p>8. Same.</p> <p>A contract between a building and loan association and a borrowing stockholder is not unconscionable, so as to authorize a court of equity to refuse to enforce it in accordance with its terms, because it requires the stockholder to carry and mature stock of a par value double the amount of the loan, paying interest on the loan meantime, one-half of which stock is assigned to the association absolutely as a bonus or premium, or, in case of prior payment of the loan through foreclosure or otherwise, to pay in addition the amount due up to that time on the premium stock.</p>