Bosang v. Iron Belt Bldg. & Loan Ass'n

• Decision Date: 23 June 1898
• Citation: 96 Va. 119,30 S.E. 440
• Court: Virginia Supreme Court
• Parties: BOSANG. v. IRON BELT BUILDING & LOAN ASS'N.

30 S.E. 440

96 Va. 119

BOSANG.

v.IRON BELT BUILDING & LOAN ASS'N.

Supreme Court of Appeals of Virginia.

June 23, 1898.

Building and Loan Associations —Charters— Retroactive Effect—Usury-Statutes—Titles.

1. A building association was organized under a charter granted by a corporation court. By Laws 1895-96, p. 537, § 5, a new charter was created adopting former by-laws not in-consistent, and providing that all contracts previously made between the company and its members under its former by-laws and charter, and not incompatible with the new charter, should be validated and confirmed. Held, that the legislature had power to, and did in granting the new charter, confirm and validate previous contracts which were usurious under the first charter, for the reason that such charter was granted by a court which has no power to permit loans savoring of usury.

2. Laws 1895-96, p. 537, § 5, entitled "An act to provide a new charter for the * * * building and loan association, " is not unconstitutional, on the ground that the title embraces more than one object (Const, art. 5, § 15), though the act, in addition, validates acts done under its former court charter.

Appeal from circuit court, Pulaski county.

Action by the Iron Belt Building & Loan Association against Giles C. Bosang. From a decree for plaintiff, defendant appeals. Affirmed.

I. H. Larew, for appellant.

T. L. Massie and C. A. McHugh, for appellee.

HARRISON, J. This association was organized under a charter granted in 1890 by the corporation court of the city of Roanoke, with power to conduct a general building and loan business. This charter was amended and enlarged by an act of the legislature passed February 20, 1896. The new charter created by this act provides, among other things, as follows: "But the present by-laws of the said company, when not inconsistent with the provisions of this charter, shall continue of force until amended or repealed in the manner therein prescribed; and all contracts heretofore made and entered into by and between the said company and its members under said by-laws and former charter, and not incompatible with this charter, are hereby validated and confirmed." Laws 1895-96, p. 537, § 5.

The appellant contends that the dealings between himself and the association, which took place under the court charter, were usurious, and that the legislature had no power, in granting the new charter, to confirm and validate the previous invalid and illegal transactions between himself and the company.

The question presented by this contention has been recently decided by this court in the case of Smoot v. Association, 95 Va. —, 29 S. E. 746. The subject is there fully discussed in a well-considered opinion by the president of the court, and the conclusion reached that statutes which validate contracts, otherwise invalid, are sustained when they go no further than to bind a party by a contract which he has attempted to enter into, but which was invalid by reason of some personal inability on his part to make it, or through neglect of some legal formality, or in consequence of some ingredient in the contract forbidden by law. There is no distinction between the case cited and the one at bar, and it must...