Central Building & Loan Association v. Lampson
| Decision Date | 29 March 1895 |
| Docket Number | 9239 |
| Parties | CENTRAL BUILDING & LOAN ASSOCIATION v. HEWS S. LAMPSON and Others |
| Court | Minnesota Supreme Court |
Appeal by defendants from an order of the district court for Hennepin county, Pond, J., denying a motion for a new trial. Affirmed.
Order affirmed.
F. B Hart, for appellants.
F. C Harvey, for respondent.
The respondent is a mutual building and loan association organized in 1885, under the provisions of G. S. 1878, c. 34, § 109 (see G. S. 1894, § 2794). Its business from the beginning has been and is local, and limited to Hennepin county, but no evidence was offered, upon the trial of the action, as to whether or not it had filed with the public examiner the statement, as provided by Laws 1889, c. 236, § 34 (see G. S. 1894, § 2887). The appellants, Hews S. Lampson and Wesley Neill, on January 22, 1891, applied to the secretary of the respondent for a loan of $ 2,500, and were informed that, in order to secure the loan, it would be necessary for them to subscribe for the stock of the association, and thereby become members. Such proceedings and negotiations were thereafter had and consummated, on February 3, 1891, that the appellants did subscribe for 100 shares of the stock of the association, and borrowed and received from it $ 2,500 as a loan, which was evidenced by their bond, also signed as an accommodation maker by their codefendant, Lillie Neill, and secured by a mortgage on real estate, also by pledge of the stock so subscribed for by them. Default was made in the conditions of the bond, and the mortgage was foreclosed by advertisement. The net proceeds of the foreclosure sale were applied in partial payment of the bond, leaving a deficiency of $ 1,303.48, for the recovery of which this action was brought. A verdict for the respondent was directed, on the trial, for this amount, with interest. The appellants appeal from an order denying their motion for a new trial. The appellants claim that the action of the trial court in directing verdict was error, because (1) the contract was ultra vires; (2) the contract was usurious, within the intention of the parties, or, in any event, the evidence as to usury was such that the question should have been submitted to the jury.
1. The appellants' contention in support of their first point is to the effect that the respondent, while it is organized as a building and loan association, did not transact its business with them, in respect to the loan in question, within the provisions of the statute (Laws 1889, c. 236), but entirely contrary thereto. It is true that the appellants were not members of the association at the time they applied for the loan, and that they had only a leasehold interest in the real estate which they mortgaged to secure the loan. These matters, however, are not material in this case, except as items of evidence on the question whether or not the loan was usurious, because they were a party to the contract, which has been fully executed on the part of the respondent, and they have received from it $ 2,500 by reason thereof. They are therefore, upon the plainest principles of justice, estopped from urging the plea of ultra vires, which is not permitted to prevail in cases of executed contracts, either for or against a corporation, where it would not advance justice, but, on the contrary, accomplish a wrong, under the forms of law.
2. Does the evidence tend to establish the fact that the loan was usurious, so that the question should have been submitted to the jury? Our answer is, "No." The burden is upon a party interposing the defense of usury to negative by his answer and proof every supposable fact...
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