Hollowell v. Southern Bldg. & Loan Ass'n

• Decision Date: 09 March 1897
• Citation: 120 N.C. 286,26 S.E. 781
• Court: North Carolina Supreme Court
• Parties: HOLLOWELL. v. SOUTHERN BUILDING & LOAN ASS'N.

26 S.E. 781

120 N.C. 286

HOLLOWELL.

v.SOUTHERN BUILDING & LOAN ASS'N.

Supreme Court of North Carolina.

March 9, 1897.

Usury—Loan from Building Association.

1. Where a member of a building association borrows from it, any charges made against him in excess of the lawful rate of interest, whether called "fines, " "charges, " "dues, " or "interest, " are usurious.

2. Under Code, § 3836, allowing a party who has paid usurious interest to recover double the amount so paid, such recovery can be had, though the party paying is in pari delicto.

Appeal from superior court, Guilford county; Starbuck, Judge.

Action by R. L. Hollowell against the Southern Building & Loan Association to recover a penalty for taking more than the legal rate of interest. Prom a judgment overruling a demurrer to the complaint, defendant appeals. Affirmed.

J. T. Morehead and Shaw & Scales, for appellant.

J. A. Barringer, for appellee.

FURCHES, J. It is alleged in the complaint that the plaintiff borrowed of the defendant $1,000, which sum had been paid off and satisfied by plaintiff before the commencement of this action; that defendant charged plaintiff $5 as interest, and $12 as dues, to be paid on the last Saturday in each month; that plaintiff continued to pay this interest and these dues, as required by the contract of loans, until the 1st of July, 1894, when he had paid the defendant $450.60. This left, as defendant contended, the sum of $730.97 which the plaintiff paid to the defendant, making the sum of $181.57 he had paid to defendant for the loan of $1,000 for 14 months and 21 days. Plaintiff then claims that he is entitled to recover of the defendant $363.14, this being double the amount of interest paid by him to defendant association. To this complaint the defendant demurs. The court overruled the demurrer, gave judgment for plaintiff, and defendant appealed.

This court has decided that whatever is collected over and above 6 per cent., whether called "interest" or "dues, " is in fact interest, and usurious (Meroney v. Association, 116 N. C. 882, 21 S. E. 924; Rowland v. Association, 115 N. C. 825, 18 S. E. 965; Miller v. Insurance Co., 118 N. C. 612, 24 S. E. 484; Roberts v. Insurance Co., 118 N. C. 429, 24 S. E..780); that a member of the association may be a borrower from the association, and any charges made against him in excess of the lawful rate of interest, whether called "fines, " "charges, " "dues, " or "interest, " are in fact interest, and usurious (Strauss v. Association, 117 N. C. 308, 23 S. E. 450, and 118 N. C. 556, 24 S. E. 116). Whenever more than the lawful rate of interest is charged, it is usurious, and the party paying it may recover back from the party...