Thudium v. Brookfield Loan And Building Association
| Citation | 72 S.W. 134,98 Mo.App. 377 |
| Parties | JOHN C. THUDIUM et ux., Respondents, v. BROOKFIELD LOAN AND BUILDING ASSOCIATION, Appellant |
| Decision Date | 16 February 1903 |
| Court | Court of Appeals of Kansas |
Appeal from Linn Circuit Court.--Hon. John P. Butler, Judge.
AFFIRMED.
Judgment affirmed.
Chas K. Hart for appellant.
(1) Under the Act of April 20, 1895, which is carried forward into the revision of 1899 as article 10 of chapter 12, no competitive bidding is necessary in order to render a premium charged by a loan association a legal charge. Sections 1363 and 1364, art. 10, chap. 12, R. S. 1899. Covey v. Loan Association (not yet reported). (3) The demurrers to the evidence offered by the appellant at the close of the respondent's case, and at the close of all the evidence should have been sustained for the reason that there is no evidence of any notice in writing to the appellant of intention to repay loan on the part of the respondents. This is a condition precedent to recovery by the respondents. Section 1368, art. 10, chap. 12, R. S. 1899.
T. M Bresnehen and Harry K. West for respondents.
(1) The evidence shows, and the court found, that there was no open, competitive bidding. The secretary states that no bid of less than sixteen per cent was ever considered by the association, and that it was an arbitrary unwritten rule of the association that all bids of less than sixteen per cent would be rejected. Where this is true, the bidding is not open, competitive bidding, and if the premium and interest together exceed the rate of interest allowed by law, the loan is usurious. (2) Appellant's counsel contends that inasmuch as the loan was made subsequent to the Act of 1895, and inasmuch as the evidence simply shows that there was no competitive bidding, the demurrer to the evidence should have been sustained. It is true that competitive bidding is not required where an association has a by-law such as is authorized by the amendment of 1895, and the loan is made pursuant to such by-law. Appellant had no such by-law, and the loan was not attempted to be made under the amendment of 1895. (3) Plaintiffs were not required to give notice, in writing, of their intention to repay their loan before bringing this suit. The statute cited and relied upon by appellant's counsel applies only to loans made in pursuance of the statutes, and not to usurious loans made in violation of the statute.
--This proceeding is by a bill in equity to cancel a note and deed of trust given by plaintiff to defendant for borrowed money. The trial court found there was yet due defendant on said loan the sum of $ 336.78, and decreed that upon the payment of that sum the note and deed of trust should be cancelled. The defendant, claiming that it was entitled to more than that sum, duly appealed.
Defendant is a building and loan association. Plaintiff executed his note and deed of trust to such association on November 2, 1896, for $ 1,200, with eight per cent interest from date, payable in monthly installments. The loan as shown by its date was made since the amendment of the building and loan statute enacted in 1895 and carried forward into the revision of 1899. The association had a by-law adopted in 1886 and amended in 1889, wherein it was provided that at a competitive letting of loans no bid would be entertained of less than sixteen per cent; and in answer to a question propounded by the court, the defendant's secretary stated that if a bid was offered at less than sixteen per cent it was not considered. That rate of premium for preference of loan was an arbitrary basis to start from in the letting. The present loan was let at auction to defendant at a premium of twenty-two and one-half per cent.
As before stated, this loan is governed by the building and loan statute now known as article 10 of chapter 12, Revised Statutes 1899. By the provisions of section 2812 of the old statute of 1889, loans were to be made by competitive bids in open meeting called by the directors. The section governing the manner of making loan in the present statute is 1362 which omits the requirement that the bids shall be in open meeting called by the directors, but still makes it necessary that loans shall be let...
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