143 Mich. 117 | Mich. | 1906
(after stating the facts).
“Sec. 10. All applications for loans shall be made in writing on blanks to be furnished by the company, and all required questions must be fully answered.
“ Sec. 11. All members filing applications shall have the privilege of bidding for loans. Bids shall be opened on the second Tuesday in each month and on such other days as the directors may appoint.
“ Whenever the board is prepared to make a loan, a notice stating the time when the bids shall be opened, shall be sent by mail to every applicant at least fifteen days before the daj for opening the bids.”
These by-laws, therefore, require the making of competitive bids which shall be opened at specified times, and notice when they are to be opened to be sent to the applicant. There is no evidence in this record to show that this was done, and it cannot rest upon presumption. Where this provision has not been complied with and the payments made are more than the legal rate of interest, the contracts are held usurious. Myers v. Building Ass’n, 117 Mich. 389. In that case a minimum premium was required in contravention of the law; See, also,
Defendant Summers testified that he wanted a loan of $2,000 and talked with the company’s agent about it, and they talked about the stock, and that the agent told him:
“ If I borrowed it in that way, I could pay it in three years. I could pay it all up in three years. * * * Hayes [the company’s agent] did all of this business for me. He made this loan. It was talked over with him and with the agent, and the understanding was, when I paid the $2,000 and interest, that was all there was of it.”
It is quite manifest that Summers understood, and he had good reason to so understand, that, when he had paid this loan, he was entitled to some stock, and that he did not understand that he was to pay $4,000, $2,000 for his mortgage and $2,000 for stock. Complainant seeks to apply $12 per month under the contract on the bonus stock in which defendants in fact had no interest whatever. For what purpose 40 shares of stock should be issued in the name of Mr. Summers, and 20 shares immediately assigned back to the company, is rather incomprehensible to me. At all events, Summers was required, under complainant’s theory, to pay $12 per month upon stock in which he had no interest. Defendants have paid considerably more than 6 per cent, on the loan. They paid 6 per cent, a year for many years on $2,000, when, in fact, they received only $1,860. Under the above authorities, and under National Mut. Bldg. & Loan Ass’n v. Burch, and Hoskins v. Loan Ass’n, supra, the contract must be held usurious.
The decree is affirmed, with costs.