104 Ga. 814 | Ga. | 1898
The Equitable Building & Loan Association was incorporated by tbe superior court of Richmond county, and among other provisions contained in its charter is the following: “The object of said association shall be pecuniary profit
Another set of by-laws was introduced, under which this loan was probably made, providing for two classes of loan shares, the monthly instalments on the same to be one dollar and twenty cents and one dollar respectively, which were to continue until payments and accumulated dividends amounted to one hundred dollars for each share in the series to which the borrower’s invested stock. originally belonged, when it should be declared to be matured. Under this set of by-laws, there were also two classes of investment stock, on which were to be paid monthly instalments of sixty and fifty cents per share respectively. At maturity of the serial stock, the shareholder had a right to withdraw the full face value of his stock, to wit, one hundred dollars for each share. These members also had the right to withdraw their shares before maturity, after a stipulated length of time, receiving back moneys paid into the loan fund with a stipulated interest for the average time; but the amount withdrawn should in no case exceed the book value of the stock at the time of withdrawal. Members were allowed to receive advancements upon their stock, in the nature of loans upon approved security given by them, as might be required by the board of directors. For each one hundred dollars advanced the member is required to first own two shares of Class A serial stock of the association, which, when the application, and the title to the property offered as security, are fully accepted by the association, will be assigned to the
The testimony showed that the character of stock above designated was issued by the association ; and none was issued that was not provided for in the by-laws. It further appeared from the testimony, that the loan was made to John B. Cook, the borrower in this case, for the purpose of building a house, and the money was advanced, as the house was erected, in instalments of one third each; that Cook had paid fines for 17 months, making a total of $91.80, at $5.40 per month; that he paid the admission fee, which was paid by all members, both investors and borrowers, one dollar per share; that he had paid twenty-one months instalments, twenty-seven dollars each; and the total amount paid by him was $897.30, distributed as follows: $235-.98 to the loan fund; same amount premiums; $95.04 to expense fund; $184.50 interest; $91.80 fines. John B. Cook,
Mrs. Cook set up in defense, that the deed from Cook to the plaintiff was void for usury, because the sums contracted to be taken for the use of the money advanced to him amounted to more than eight per cent, per annum; that the plaintiff, although nominally a building and loan association, was .not one within the meaning of the law, and was not conducting its business as such; that it combined with some of the features of such an association those of corporations of a different character; and that the general scheme or plan upon which it was operated embraced usurious designs; also, that the statute providing that no fines, interest, or premiums paid on loans in any
A more comprehensive definition of such organizations as they generally exist to-day in this country is embodied in the following language from Thompson on Building Associations, §2: “The building association, as now existing, is a private corporation, designed for the accumulation by the members of their money by periodical payments into its treasury, to be invested from time to time in loans to the members upon real estate for home purposes, the borrowing members paying interest and a premium as a preference in securing loans over other
The question of usury in such transactions is no longer an open one in this court; but we have dealt with it at some length, for the reason that a few learned members of the profession have doubted the correctness of the above rulings. We think they are not only sustained by reason, but they are certainly supported by a decided weight of authority both in England and in this country. In Endlich on Building Associations (2d ed.), § 341 et seq., a great number of authorities in the courts of England and this country are reviewed. Among the States
Judgment affirmed.