Preston v. Brinley

Citations

• 106 A.D. 593
• 94 N.Y.S. 782
• 1905 N.Y. App. Div. LEXIS 2638

Syllabus

<p>insolvent building and loan association — enforcement of a mortgage given to it by a stockholder —fines imposed are not secured by the mortgage — mortgage construed in favor of the borrower — nature of the relation between the association and the borrowing member —no reduction allowed in the foreclosure action for dues, interest or premiums paid to the association,</p> <p>-Fines imposed by a building and loan association pursuant to its by-laws upon a borrowing member for a failure to make timely payment of the dues and interest charged against his stock do not constitute a part of the principal secured by the mortgage given by the borrowing member in the absence of a provision to that effect contained in the mortgage, at least as between the-building and loan association and a person purchasing the mortgaged premises from the borrowing member.</p> <p>'The fact that the by-laws of the association and the certificates of stock issued to the borrowing member contained a provision for the imposition of the fine, and that the mortgage contained the following clause: “All payments to be made by the party of the first part * * - shall be deemed to be conditioned upon the * * * By-laws of the said corporation, although the same may not be fully expressed herein,” does not establish an express agreement between the parties that the fines shall constitute part of the principal due upon the mortgage.</p> <p>If there is any uncertainty or ambiguity in the terms of the mortgage executed by the borrowing member, that construction must be adopted which is most favorable to the latter.</p> <p>The nature of the relation existing between the association and the borrowing member, and the status of such borrowing member in the event of the insolvency of the corporation, considered.</p> <p>■Semble, that in an action brought, after the association has become insolvent, to foreclose the mortgage executed by the borrowing member, the latter is not entitled, by way of reduction in the a