Jackson v. Cassidy

• Decision Date: 17 May 1887
• Citation: 4 S.W. 541
• Parties: JACKSON v. CASSIDY.
• Court: Texas Supreme Court

4 S.W. 541

JACKSON v. CASSIDY.

Supreme Court of Texas.

May 17, 1887.

Appeal from Travis county.

Robertson & Williams and Smith & Trigg, for appellant. Walton, Hill & Walton, for appellee.

WILLIE, C. J.

Under repeated decisions of this court, the first error assigned upon this appeal cannot be considered. We are not informed by the assignment whether the court erred in overruling the general demurrer, or whether it erred in overruling some one of the many special exceptions taken to the answer. The fact that the errors complained of are specified in the propositions does not cure the defect in the assignment. In view, however, of our decisions upon the findings of law and fact made by the judge below, his ruling upon the demurrer and exceptions becomes of no importance. The Austin Home Building & Loan Association was incorporated under the general laws of our state, for the erection of buildings, and the accumulation and loan of funds for the purchase of real property. Its charter had "this extent; no more." The association adopted a set of by-laws, which it will not be necessary to repeat, as they are substantially the same as those which govern the numerous associations of the kind existing throughout the United States. On the fourth day of each month the money of the association was offered for loan to the member who would pay the highest premium for it; that is, receive the smallest amount in cash upon his shares of stock, and execute his obligation for the payment of their full ultimate value, i. e., $100 to each share. The appellee owned five shares, whose ultimate value was $500. She agreed to take 43 per cent. on that amount in cash, bidding thereby a premium of 57 per cent., and accordingly she received from the association $215, and executed her obligation for $500. This $500 bore interest at the rate of 6 per cent. per annum, to be paid in monthly installments of ½ per cent.; and the obligation for its payment included a further stipulation to pay one dollar a month on each share of stock, and all fines and other charges that might be assessed against the obligor. It provided for a return of the loan at any time, — which, according to the by-laws, could be done by repaying the amount received, and a part of the premium bid, in the proportion the apparent value of the stock bore to its ultimate par value, — and for foreclosure in default of over six months in payment of dues and interest. To secure the performance of this obligation, Miss Cassidy transferred her stock to the association by way of collateral security, and executed a deed of trust to that body upon the land in controversy. She paid dues, fines, and interest for some time, but finally defaulted for more than six months; and thereafter the deed of trust was foreclosed, and the property sold under it was purchased by one Morris, who transferred his bid to the appellant. The deed of trust made the then president of the association, and his successors in office, trustees for the execution of the trust; and, in default of their acting, it was to be executed by the sheriff of Travis county. The sale under the deed was made by a deputy sheriff of Travis county. At the time the sale took place the books of the company showed that Miss Cassidy's account with the company was as follows:

                  She was charged with the amount paid her,  -     -     -     $215 00
                  Fines,    -       -       -      -      -     -     -           7 10
                  Dues on stock in arrears,    -      -      -     -     -       74 60
                  Interest, -       -       -      -      -     -     -          32 50
                                                                               _______
                      Total,   -        -      -      -      -     -     -     $329 20
                  She was allowed as credits
                  Value of her stock at the time, -     -     -     -    -     $247 25
                  Rebate of interest for 52 months, at 35 cents, -     -         18 20
                                                                               _______
                     Which statement brought her in debt to the company, -      $63 75
                

The property was sold under the deed of trust for $90, part of which went to pay the expenses of the trust; but there was a balance still left more than sufficient to pay the $63.75 due from Miss Cassidy. What became of this balance is not shown. The land sold was worth about $750. It is apparent that if the account is to be stated, or it is taken from the books of the company, the appellee was indebted to the association in the sum of $63.75, and it was authorized to foreclose the deed of trust. But it is claimed by the appellee that her contract with the company was usurious, as it stipulated for more than 12 per cent. per annum interest on the sum received by her; and that, as a consequence, she must be credited with all sums paid by her as interest, and no other amounts of this kind must be charged against her. If this be so, the $32.50 charged as interest must be deducted; and, it having been proved that Miss Cassidy had paid to the company $95 as interest on her loan, that amount must be credited to her. This restatement of the account brings the association in debt to her, and makes the sale under the deed of trust unauthorized. Our statute declares that all written contracts whatsoever, which may in any way, directly or indirectly, stipulate for a greater rate of interest than 12 per cent. per annum, shall be void and have no effect for the whole rate of interest. Rev. St. art. 2979. If, therefore, the contract bound Miss Cassidy to pay more than 12 per cent. interest upon the money she received from the association, it is void as to the entire interest, and she must receive credit for every item of interest paid, and must not be charged for such unpaid amounts as have accrued in this way under the contract. The effect of the contract was to bind Miss Cassidy to pay 6 per cent. interest on $500 for the use of $215, which would be more than 14 per cent. on the latter sum. She therefore either paid lawful interest upon money she had never received, or unlawful interest upon money she had received. The weight of authority holds it unlawful to charge interest upon the premium for this is a charge, not upon what the member received, but upon what he relinquishes to the society. It is very easy to see how, under the guise of such a transaction, the usury law may be evaded, and the member be made to pay for the use of money a much larger premium than our statute allows. Association v. Gallagher, 25 Ohio St. 208; Society v. Taylor, 41 Md. 409; Association v. Blackburn, 48 Iowa, 385; Gordon v. Association, 12 Bush, 110; Martin v. Association, 2 Cold. 418. ...