Cont'l Bldg. & Loan Ass'n v. Boggess

CHIPMAN, C.

Foreclosure of mortgage executed to plaintiff by defendants Emma A. and Riley A. Boggess on certain property situated in the city of Marysville, Tuba County, to secure the payment of a promissory note for three thousand dollars. Plaintiff had judgment, from which defendants appeal on bill of exceptions. It was recited in the mortgage that the mortgagors, having subscribed for thirty shares of the capital stock of plaintiff corporation at the par value of one hundred dollars each, evidenced by certificate number 15,935, the mortgagors promised to pay to mortgagee said amount, in monthly installments of thirty cents per month, for each said share, on the 15th of each month, until fully paid by said payments and by the dividends and accumulations on said shares, and further to pay the monthly premium of eighteen dollars on said loan on the fifteenth day of each month, until said shares are fully paid. And as further security for the payment of said promissory note and interest and the par value of said shares, mortgagors pledged the said shares, and in case of foreclosure of said mortgage or the non-payment of said promissory note or interest, or the said

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installments as above set forth, or the premium, mortgagee “may apply, at its option, without notice to said mortgagors, the cash surrender value of said shares as provided in the by-laws of said corporation, ... to the payment of said promissory note, and the said shares shall thereupon become the property of and vest in said mortgagee. ’ ’ Other provisions to cover advances, payment of taxes, and similar provisions usual to mortgages are set forth in the mortgage.

It is alleged in the complaint also that plaintiff did by resolution declare the whole of said note and mortgage due and payable and elected to foreclose the mortgage; that the advances, installments, and premiums on said loan from March 15, 1901, amount to $851.40; that the cash surrender value of said certificate No. 15,935 of plaintiff’s said stock, pledged to plaintiff, was, on March 23, 1903, the day of passing said resolution declaring said note to be due, the sum of $18.41. Demand of payment and refusal is alleged, with usual prayer for sale of premises, etc.

Defendants answering admitted the execution of the note and mortgage set forth in the complaint; on information and belief denied that plaintiff passed the resolution above referred to; and on information and belief denied that plaintiff made any further advances, and denied that interest, installments, and premium on said loan amount to $851.40 or any other sum. Further answering the complaint, and particularly that portion which alleges the cash surrender value of said certificate No. 15,935, the answer, after alleging the existence of plaintiff corporation (which is but an admission of the allegation in the complaint), proceeds, in folios 65 to to folio 75, to set forth sundry matters which are apparently intended to show that the cash surrender value of said certificate should have been “largely in excess of the value of $18.41,” if the affairs of the corporation had been properly and honestly managed. A motion was made by plaintiff, and granted by the court, to strike out this portion of the answer designated “a” in the motion, on the ground that it is “sham and irrelevant and surplusage” and not “proper matter of averment,” and does not “show any defense to an action to foreclose a mortgage.” This motion was granted. The answer then sets forth what is called “an equitable and for a further and distinct defense.” This portion of the answer