58 Md. 569 | Md. | 1882
delivered the opinion of the Court.
. The appellee is a Building Association, duly incorporated under the laws of this State. The appellant, having two shares of the stock of the Association of the value of two hundred dollars each, executed a mortgage to the appellee to secure the payment of four hundred dollars advanced him, on his two shares, which were thereby declared redeemed and transferred to the Association. The covenant of the mortgage was “to pay the mortgagee the weekly sum of one dollar as weekly dues, and the further sum of sixty cents as weekly premiums, on every Monday evening until the dissolution of the said body corporate shall have taken place according to the charter, and the constitution and by-laws thereof which charter, constitution and by-laws, are made part of this mortgage; also, to pay all ground rent and taxes (State and city) for which the property hereby mortgaged may become liable, when payable. And to pay all fines which may be imposed on him by the said mortgagee, for any failure to perform the requirements of the charter, constitution and by-laws aforesaid.” It also provided that all payments and covenants should continue in force until the holder of every share of the stock of the Association shall have received therefor two hundred dollars, when the corporation, by its charter, would be dissolved. The mortgagor consented in the mortgage to a decree for sale in the event of default, and the appointment of Luther M. Eeynolds, as trustee, to make the sale, in such case, in accordance with the provisions of sections 182 to 199, inclusive, of Article 4-, of the Code of Public Local Laws.
The appellant having failed for two consecutive weeks to pay his weekly dues and premiums, the appellee filed
The amount in controversy is small; but the question presented is important to the Association and its members. The mortgage cannot be regarded as ultra vires, as contended for by the apjDellant’s solicitor. Nor can it be regarded solely as for a simple loan of money, between borrower and lender. The Peter’s Building Association No. 5 of Balto. vs. Jaecksch, 51 Md., 201. To the extent, however, that the appellant is called on by the appellee, to pay as weekly premium a sum larger than six per centum per annum upon tbe four hundred dollars advanced, the claim is usurious, and consequently, not recoverable.
Article 7, of the constitution of the corporation, provides, that whenever there shall be two hundred dollars in the treasury, a share shall be loaned on or redeemed, and that if there is no application for it, some member may be forced to take it. In this respect, it is claimed, this Association differs from all others heretofore considered by this Court, and that the difference is material.
Article 8 of the appellee provides that any shareholder who has received a loan or advance, either on application or by compulsion, shall pay the Association for every
The argument of the appellee’s counsel is very ingenious, hut we can find no solid reason for excepting this case from the operation of the principles announced in The Peter’s Building Association case, 51 Md., 198, and in the Border State Perpetual Building Association vs. McCarthy, 57 Md., 555, and The Home Mutual Building Association of Baltimore vs. Thursby, supra, page 284.
The law under which the appellee was incorporated restricts the charge for interest on money loaned, to six per centum, and the general law of the State forbids the charge of more. The thirty cents premium, per share, provided for in Article 8 of appellee’s constitution, and charged this appellant, is more than six per cent, on the value of the share, which is $200.00. Sixty cents is charged the appellant on the two shares ($400.00) advanced him. This is nearly fourteen cents per week in excess of legal interest. It is not called interest, hut is called premium; hut it is manifestly intended for interest, and is an evasion of) and in violation of, law. The contention that this charge is warranted by the Act of 1872, ch. 178, cannot he sustained. That Act has no application to this case, and we now express no opinion as to the effect of its provisions in cases where it was intended to apply. It was intended for an entirely different class of corporations, and does not include Building Associations in its provisions. It is very clear that this case does not fall within
From what we have said it is apparent that the pro forma decree of the Circuit Court dissolving the injunction must be reversed, and the cause must be remanded, to the end that an account may be taken to ascertain the exact amount due from the appellant to the appellee, before the sale shall be allowed to proceed; which account .shall be stated in accordance with the views herein expressed.
Decree reversed, and cause remanded.