Hawkeye State Sav. & Loan Ass'n v. Johnston

• Decision Date: 08 October 1898
• Citation: 106 Iowa 218,76 N.W. 678
• Court: Iowa Supreme Court
• Parties: HAWKEYE STATE SAVINGS & LOAN ASS'N v. JOHNSTON ET AL.

106 Iowa 218

76 N.W. 678

HAWKEYE STATE SAVINGS & LOAN ASS'N

v.JOHNSTON ET AL.

Supreme Court of Iowa.

Oct. 8, 1898.

Appeal from district court, Marion county; J. D. Gamble, Judge.

Suit in equity to foreclose a mortgage, and to cancel certain shares of stock held by defendants in the plaintiff association. Defense, usury and certain payments which were not credited upon the notes. Decree for plaintiff, and defendants appeal. Affirmed.G. W. Crozier and S. C. Johnston, for appellants.

J. E. Mershon and L. N. Hays, for appellee.

DEEMER, C. J.

Appellee is a building and loan association, organized in the year 1894, under the then existing laws. Appellant became a member of the association, and in the year 1895 borrowed the sum of $1,200, agreeing to pay $20.40 per month until the installments so paid, together with the profits on 12 shares of stock, should equal the aggregate par value of said stock. This monthly payment was made up of $7.20, the monthly installment on the stock; $6, as interest; and $7.20, as premium bid for the loan. After making nine payments, appellant defaulted, and in November, 1896, this suit was brought. Afterwards, and on the 1st day of March, 1897, appellee filed a supplemental petition, asking that it recover three more of the monthly installments. Appellant denies that he received the full sum of $1,200, pleads usury, and, further, asks credit for the sum of $225 paid by him.

While Johnston received but $1,162.60 at the time he made the loan, yet it clearly appears that the difference between this sum and the amount of his notes was applied upon the payment of an indebtedness he was then owing the association, and of expenses incurred in perfecting the papers incident to the loan. None of it was retained for the use of the money borrowed, and it was not withheld for the purpose of avoiding the statute with reference to usury. Before securing the money, appellant signed an application in which he stated that he agreed to pay a premium of 60 cents per share upon his 12 shares of stock, which premium he authorized the secretary of the association to bid in his name for priority of loan. Whether any bid was actually made does not appear, but it is conceded that he agreed to pay $7.20 per month as premium. This, it is contended, rendered the loan usurious, for it also appears that he agreed to pay 6 per cent. interest on the total amount received. When the loan was made, the law provided (Code 1873, § 1185) that such an association might levy, assess, and collect from its members such sums of money, in premiums bid by its members for the right of...