112 Ky. 164 | Ky. Ct. App. | 1901
Opinion of the court by
Affirming.
In 1895 appellee, being a holder of ten shares of the •stock of appellant, association, borrowed $1,000 from it, upon which he made payments from time to time, according' to the by-laws of the association, which payments, unden numerous familiar decisions of this court, included usurious interest. In 1897 this court deciding the case of Simpson v. Association (19 Ky. Law Rep., 1176), (41 S. W., 570), (42 S. W, 884), exactly defined the relations between building and loan associátions that were going concerns and their borrowing stockholders. The result of that decision was to declare unconstitutional the Kentucky 'Statutes allowing such institutions to collect greater than the simple rate of six per cent, per annum interest upon their loans to their members, which was materially different from the general plans upon which they were then being operated. It seems that some confusion and material alteration of plans resulted, and so appellant claims to have had such experience in the conduct of its affairs. Thereafter, in 1900, when many similar conqerns had found! it necessary to quit business, or, at least, had found it so un
It may be accepted as an uncontrovertible proposition that agreements between a debtor and creditor, while the debt exists, by which the debtor undertakes to waive objections to usurious rate of, interest, or obligates hims-elf not to claim the benefits of’the statutes against usury, are void. “The law regards the debtor, in executing such a release, as acting under the coercion of the creditor, and yielding to the -demand, under the pressure of his-condition. If such agreements were recognized as valid, it would take from the statute its entire force and efficacy for the suppression of usury or the protection of borrowers; for the lender would always procure, for some small consideration, a release from the borrower of his right to refuse to pay the usury promised.” Browning v. Thompson, 13 B. M-on., 3S7. In fact it may be stated that any settlement of a
It follows that the court below properly rejected the answer pleading the contract of settlement, and its judgment is affirmed.