Callison v. Trenton Building And Loan Association
| Decision Date | 05 January 1903 |
| Citation | 72 S.W. 477,98 Mo.App. 677 |
| Parties | ELIZABETH CALLISON et vir, Appellants, v. TRENTON BUILDING AND LOAN ASSOCIATION, Respondent |
| Court | Kansas Court of Appeals |
Rehearing Denied 98 Mo.App. 677 at 681.
Appeal from Grundy Circuit Court.--Hon. P. C. Stepp, Judge.
REVERSED AND REMANDED (with directions).
Judgment affirmed.
W. G Callison and O. G. Williams for appellants.
(1) The original loan made to Mrs. Endicott in 1894, was an usurious transaction. (2) The renewal of the original loan by Mrs Endicott in 1897, and the execution of a new money bond and deed of trust, did not purge the transaction of usury. (3) Mrs. Endicott was entitled to relief from the usurious conditions of the original contract, and this plaintiff being her assignee, becomes entitled to the same relief. (4) The whole series of transactions, being in violation of the laws of this State, was usurious, unreasonable and oppressive, and the court should have investigated and corrected these wrongful acts of defendant association, by granting an accounting as prayed for in plaintiff's petition.
Platt Hubbell for respondent.
(1) The plaintiff's theory of the case ignores the statute of 1895, page 105. R. S. 1899, sec. 1362. (2) The plaintiff's theory of the case ignores the Covey case giving the judicial interpretation of that statute. Wherever the question has arisen, the Covey case is supported and approved. Zenith B. & L. Ass'n v. Heimbach, 79 N.W. 610; Ass'n v. Fawich, 79 N.W. 847; Manship v. B. & L., 110 F. 856; Cumberland B. & L. v. Sparks, 111 F. 647.
--This is a proceeding in equity seeking to cancel a note and deed of trust securing the same and to restrain a sale under the deed of trust. The ground relied upon by plaintiff is that on the 22d day of May, 1900, she only owed $ 286 on the loan, when proper credits, including usurious payments, were allowed, and she tendered that amount. Defendant claimed that there was due on that date $ 341.60, and refused the tender. The result in the trial court was for defendant.
It appears that, in 1894, Mrs. Endicott was a member of the defendant association and borrowed of it $ 400. At that time the association was governed by the general statutes of 1889 relating to building and loan associations. That statute required competitive bidding in open meeting for premium for loans in order to protect them from usury. It was not had in making this loan and under repeated rulings of the appellate courts of the State the loan was usurious and the illegal payments could, ordinarily, have been forced as credits on the note. Brown v. Archer, 62 Mo.App. 277.
But Mrs. Endicott, in November, 1897, settled and adjusted that loan and made a new loan (the one in controversy) for $ 400. In this settlement she accepted all proper credits in the association which, being a mutual organization, included the profits to which, as a shareholder, she was entitled. The case, so far as concerns the first loan, is therefore governed by those of State ex rel. v. Stockton, 85 Mo.App. 477, and the recent case of Cover v. B. & L. Ass'n, 93 Mo.App. 302. Mrs. Endicott made various payments under the new loan until in 1899, when she sold to plaintiff the land in controversy and plaintiff succeeded her in membership in the association. Plaintiff then continued payments until in 1900, when a difference of $ 55.60, in what was considered due, arose and plaintiff made the tender as above stated.
This proceeding seems to have originated as though the controversy was governed by the statute of 1889, chapter 42, article 9. Under that statute, as above stated, and has been many times decided, organizations like defendant could receive interest and premium for privilege of the loans, which, together would go beyond the rate of interest permitted by law in ordinary contracts. Te secure such extraordinary privilege it was necessary to make the loan on a premium determined by open competition of bidders. But in 1895, two years before the present loan was made, the Legislature saw fit to make very material changes in the former statute, and that change has been carried forward into the...
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