ANDRUSS et ux. v. PEOPLE'S BUILDING, LOAN & SAVING ASS'N, 94 F. 575

SHELBY, Circuit Judge. 1. The debt which is the subject of this suit is proved by a bond which is secured by a ’ mortgage. The appellants, who are the obligors in the bond and the mortgagors in the mortgage, are citizens of Texas. The appellee, who is the obligee in the bond and the mortgagee in the mortgage, is a New York corporation. Both the bond and the mortgage are made payable at Geneva, in the- state of New York. The by-laws of the ap-pellee corporation provide that all payments shall be made to the secretary of the association, at Geneva, N. Y.

The appellee corporation is a building and loan association organized pursuant to statutes of the state of New York, and both the bond and the mortgage contain a stipulation that it is to be governed by the taws of that state. In view of all these facts, we hold that the contracts in question are not usurious, if they are valid under the laws of the state of New York, the place of performance. Andrews v. Pond, 13 Pet. 65-78; Association v. Logan, 14 C. C. A. 183, 66 Fed. 827; Miller v. Tiffany, 1 Wall. 298; Sturdivant v. Bank, 9 C. C. A. 256, 60 Fed. 730; Dugan v. Lewis, 79 Tex. 246, 14 S. W. 1024; Association v.

Tinsley (Va.) 31 S. E. 508. 2. It is not necessary, as claimed by the appellants, to offer evidence of the public statutes of another state. The United States courts sitting in Texas will take judicial notice of the public statutes of New York. Owings v. Hull, 9 Pet. 607; Gormley v. Bunyan, 138 U. S. 623, 11 Sup. Ct. 453. 3.

While it is true, as claimed by appellants, as a general proposition, that contracts in New York for more than 6 per cent, interest are usurious and void, yet an exception is made by statute of building and loan associations, of at least it is provided that premiums for loans may be paid such associations without a violation of the usury laws.

The following is the statute: “No holder of redeemed shares shall claim to be exempt from making the monthly payments provided in the articles of association, upon the ground that by reason of losses or otherwise the association has continued longer than was originally anticipated, whereby the payments made on such shares may amount to more than the amount originally advanced, with legal interest thereon; nor shall the imposition of fines for non-payment of dues or fees, or other violation of the articles of association, nor shall the making of any monthly payment required by the articles of association, or of any premium for loans made to members be deemed a violation of the provisions of any statute against usury.” 1 Rev.

St. N. Y. (4th Ed.) p. 1200; Laws N. Y. 1851, c. 122, § 7. This statute prevents the contracts between the parties from being usurious under the general statutes. Association v. Read, 93 N. Y. 474. 4. The claim of the appellant George W. Andruss, that he is entitled to credit on his bond for borrowed money on account of the payments he made on his subscription for stock, cannot be sustained.

He was a subscriber for stock in the association, and he-was under contract to pay for it, just as any other stockholder, Payments on the stock, his stock being forfeited under the rules of the association, cannot be applied to his debt on account of the ioan. Blakeley v. Association (Tex. Civ. App.) 26 S. W. 292; Association v. Logan (Tex. Civ. App.) 33 S. W. 1088. 5.

On (he 3d day of larch, 1893, the appellants both signed a writing designating certain real estate as a homestead, and concluding with this statement: “And wo do hereby exempt from the operation of the homestead law, and do disclaim any homestead right in and to, the north half of lot number ten in block number six of Bishop’s addition to the town of Dublin.” This instrument was duly recorded. George W.

Andruss testifies that: “The pnrpose of executing said instrument was to enable me to procure the loan on said property. * * * My purpose in getting the money was for the purpose of improving said property.” He admits that he vacated the property, but he says this was only temporary, for the purpose of allowing the building to be erected.

Eto further testifies: “Myself and wife executed and recorded the instrument [the homestead disclaimer] in good faith, and it was our intention to relinquish our homestead right in 'dioiiorUi half of lot ten, in said instrument.” Having executed this relinquishment to secure the money, the defendant!; offer to rejmdiiite it in defense of a suit to collect the money. This cannot be permitted. In the case of Jacobs v.

Hawkins, 63 Tex. 3. the supreme court of Texas said: “In casos in which properly has not been used as a homestead, or is not so used, the declara lions of a husband would seem to be admissible for llie purpose of showing that there was no intention so to use it as to make it the homestead; and this would seem to be true where a place formerly used as a homestead is not longer occupied, and so for the purpose of indicating an intention never again to use it, which, coupled with ihe act of removal, would amount to an abandonment.” Ano Unir case which is analogous to the one at bar is Kempner v.

Comer, 73 Tex. 202, 11 S. W. 196. The owners were improving the property for the purpose of making the same the business homestead, but had not sufficient means to complete the improvements; and, in order to procure a loan on the property to make the improvements already begun, the husband and wife executed a renunciation, renouncing all homestead interest in the property.

The supreme court said: “But the parties claiming homestead expressly abandoned and renounced their’ intention to occupy and use the premises as a homestead before it was so used, and this renunciation was made, not by mere declarations, but in the solemn form oí a deed, 1lie wife joining; and all this was done in order to include the property in the deed of Irust then being made to secure advances and borrowed money. Tn such case the law will give effect to the renunciation.

There was in fact no homestead in the premises when renounced.” The renunciation, as this case shows, would have no effect if the premises had really been occupied as a homestead, and if the renunciation had only been made to avoid the effects of the homestead laws. But here the appellant Andruss testifies that the relinquishment was in good faith, and the evidence shows an actual abandonment of the lot as a business homestead.

The money having been lent on the representation that the property was abandoned as a homestead, and having been used to build a house on the lot, it would be manifestly inequitable to allow the claim of homestead to be now used to defeat the deed of trust. The judgment of the circuit court is affirmed.