Burns v. Equitable Bldg. & Loan Ass'n

• Decision Date: 21 July 1899
• Court: Georgia Supreme Court
• Parties: BURNS. v. EQUITABLE BUILDING & LOAN ASS'N.

33 S.E. 856

108 Ga. 181

BURNS.

v.EQUITABLE BUILDING & LOAN ASS'N.

Supreme Court of Georgia.

July 21, 1899.

USURY — WHAT CONSTITUTES — MISAPPLICATION OF PAYMENTS.

1. Under the decision of this court in the case of Cook v. Association, 30 S. E. 911, 104 Ga. 814, the contract sued on in this case was free from usury.

2. This being a valid contract entered into by the parties, illegal or unauthorized conduct on the part of the officers of the plaintiff corporation in misapplying payments made by the defendant on his debt to the company does not infect the contract with usury. Hence there was no error in sustaining the demurrer to the defendant's plea of usury.

(Syllabus by the Court.)

Error from city court of Atlanta; H. M. Reid, Judge.

Suit by the Equitable Building & Loan Association against James A. Burns. Judgment for plaintiff, and defendant brings error. Affirmed.

T. C. Battle and W. I. Heywood, for plaintiff in error.

J. Howell Green, for defendant in error.

LEWIS, J. The Equitable Building & Loan Association brought suit against James A. Burns in the city court of Atlanta, making by its petition substantially the following case: Defendant, as member of the association, is the owner of 10 loan shares of stock in plaintiff company. On November 28, 1894, he received a loan from plaintiff of $1,000 on said shares, and to secure the payment of the same he hypothecated these shares with the association, and as further security executed his bond to the association in the penal sum of $2,000, a copy of which is attached to the petition, and made a part thereof. The bond provides that Burns shall pay to the association monthly installments of $1.20 on each of the 10 loan shares, and interest at the rate of 6 per cent, on the $1,000 advanced, until the shares of loan stock mature, when the stock is to be canceled, the indebtedness paid, and the bond declared void. The bond further provides that, in case of default in payment of any of the sums therein stipulated for the space of six months, then the whole principal sum secured, together with all interest thereon, shall become due and payable at the option of the association. The petition further alleges that the by-laws of the association provide that all members in arrears in their payments on stock shall pay a fine of 10 cents per share on each share of stock so in arrears, for each month, and that Burns had failed and refused to pay the association the amounts due on said shares for several months past, and also interest on the sum loaned. As further security for the payment of the said advance of $1,-000, Burns executed to the association his deed conveying a certain tract of land described in the petition. The association executed and delivered to him its certain bond, conditioned to reconvey the land upon the performance of the stipulations contained in the bond. This is the substance of the first 14 paragraphs of the petition. The fifteenth and sixteenth paragraphs are simply conclusions of the pleader as to the amount due by the defendant; itemizing the same, and showing the sums due by the defendant in accordance with the foregoing allegations. The petition then concludes with a prayer for the recovery of said sums, and also that its special lien on the land described in the petition be set up and established. Attached to the petition as exhibits are the bond given by the defendant, the deed executed by him to the association, and an itemized statement of his account with the association. To this petition the defendant filed an answer, and therein admitted the allegations in the first 14 paragraphs of plaintiff's petition, but denied the correctness of paragraphs 15 and 16, and the right of the plaintiff to a special lien on the land. He then specified in his plea the requirements of the by-laws of the association with reference to lending money (which portions of his answer are in no wise in...