11 S.D. 589 | S.D. | 1899
This is an appeal from an order sustaining a demurrer to defendants’ answer. The action was instituted to foreclose a mortgage made by the defendants to the plaintiff, The answer admitted substantially all the allegations of the complaint, except the amount due to plaintiff, and alleged as follows: “And for a further defense this defendant alleges that the directors and officers of the plaintiff, instead of offering said money for loan in open meeting, as directed and required by the provisions of the statute of this state regulating and controlling the plaintiff and like associations, fixed an arbitrary minimum cash premium of seventy cents (70) per month for each one hundred dollars ($100) borrowed, claiming to act under and by virtue of section 4 of article 3 of the by laws of said association, set out in paragraph 6 óf the complaint; but such action, this defendant alleges, was and is without authority of law. And for a further defense this defendant alleges that the monthly payments required by said note and mortgage equal one dollar and seventy cents per month, and exceed twelve per cent per annum upon said principal of one hundred dollars ($100); that said agreement, loan, note, mortgage, and transaction were and are usurious, in that said plaintiff, with full knowledge of all the facts, at the time when said shares were taken, and said loan, note, and mortgage were made, of which the taking of'said share, the making of said loan, the giving of said fixed and arbitrary cash bonus or premium, and said note and mortgage were a part, contracted with this defendant to receive upon the principal of said loan greater rate of interest than twelve per cent per annum.” The learned circuit court evidently sustained the demurrer upon the ground that Section 4, Chap. 40 of the laws of 1889, was still in force. The first act
The appellants contend that the act of 1893, and especially Section 6, is inconsistent with the provisions of Section 4 of the act of 1889. and in effect repealed said section, and con
It is contended that by the act of 1885, as amended in 1887, and by the act of 1893, it is .expressly provided that loans shall be made by offering the money in the treasury for loan to the stockholder who shall bid the highest premium therefor; but this is not inconsistent with the further provision that such corporation may in its by-laws, fix a per cent, premium, at less than whicL’it will not be obliged to accept loans, as provided in the act of 1889. The premium bid may be in excess of the amount fixed by the board, but the board will be under no obligation to accept any bid less than the minimum premium so fixed. It is not uncommon, in sales of property, made under the direction of courts, to the higest bidder, to fix a minimum sum for the property, and no bid for a less sum will be received by the auctioneer. We see no reason why the same principle should not apply to loans made by loan and building associations, when authorized by law.
While, therefore, Section 4 of the act of 1885, as amended in 1887, was, in effect, repealed by Section 6 of the act of 1893,