Schober v. The Accommodation Saving Fund and Loan Association
| Decision Date | 01 January 1860 |
| Citation | 35 Pa. 223 |
| Parties | Schober versus The Accommodation Saving Fund and Loan Association. |
| Court | Pennsylvania Supreme Court |
The case of the defendant below, now plaintiff in error, is most dishonest and repulsive, but if it be legal, it must prevail.
His plea was, that the loan association was a body corporate; that it had loaned to him the sum of $2080, for which loan he had executed and delivered his bond and mortgage, conditioned for the payment of $2600 within one year; that he was a member of the corporation, and had bid or offered for said loan the difference between it and the sum of $2600 as a premium, whereby the bond and mortgage were discounted by the corporation, and therefore void.
The defence intended to be set up by the plea is, that such a loan as it describes is a "discount," within the meaning of the 25th section of article 1st of the amended constitution of 1838, and therefore that the plaintiffs below were not privileged to make it. The constitutional inhibition is as follows: — "No corporate body shall hereafter be created, renewed, or extended, with banking or discounting privileges, without six months' previous public notice of the intended application for the same, in such manner as shall be prescribed by law." On the 1st of June 1839, the legislature prescribed the manner of giving this notice. Though the plea does not make the averment, it is assumed that the plaintiffs below were incorporated since the 1st of June 1839, and that they were incorporated without having given six months' notice of their intended application for a charter.
Was then the transaction a discount within the meaning of the constitutional prohibition? For if it was not, the plea is bad. Then the loan was not illegal, and the bond and mortgage are not void.
Upon this question we can entertain no doubt. It is nothing to the purpose, that the word discount, among its many significations, has one which would include this transaction. The inquiry is, how was it understood by the framers of the constitution? Did they contemplate a prohibition of anything which had ever been called a discount, or which makes up any of the definitions of the word to be...
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Hemperley v. Tyson
...for a debt cannot, when sued upon his mortgage to the association, claim a credit for the value of such shares of stock: Shober v. Saving Fund, 35 Pa. 223. the stock of a building association is assigned as collateral security for the payment of a mortgage or judgment given to the associati......