Ware v. Bankers' Loan & Inv. Co

• Decision Date: 17 March 1898
• Citation: 95 Va. 680,29 S.E. 744
• Court: Virginia Supreme Court
• Parties: WARE . v. BANKERS' LOAN & INVESTMENT CO.

29 S.E. 744

95 Va. 680

WARE .

v.BANKERS' LOAN & INVESTMENT CO.

Supreme Court of Appeals of Virginia.

March 17, 1898.

Usury — What Law Governs — Construction op Contract.

1. A loan of money by a New York building association in Virginia to a citizen of that state, on land located there, but made payable in New York, is a New York contract; and the question of usury is to be determined by its laws.

2. A bond given in Virginia to a New York building association provided for the payment of the principal "at its office in the city of New York, " and by a subsequent clause for the payment of interest "at its office." The association had a branch office in Virginia, where payments could be made. Held, that the bond was payable in New York.

3. Where parties entered into a contract lawful in New York, but usurious in Virginia, the presumption is that they contracted with reference to the laws of the former state.

4. The fact that a building association incor porated under the laws of New York, capable of contracting in any jurisdiction, and authorized by its charter and by-laws to enter into a contract made usurious in Virginia, selects its home state as the place where a loan in Virginia is to be made payable, does not of itself show that the place of performance was determined on as a mere device to evade the usury laws of Virginia.

Appeal from circuit court of city of Roanoke.

Bill by J. M. Ware against the Bankers' Loan & Investment Company for an injunction. From a decree for defendant, complainant appeals. Reversed.

Scott & Staples, for appellant.

Cocke & Glasgow, for appellee.

KEITH, P. This suit was begun in the circuit court of the city of Roanoke by J. M. Ware to enjoin the sale of certain rexl estate conveyed by him to secure the Bankers' Loan & Investment Company the payment of a bond, with collateral condition, for the sum of $1,500. In the circuit court the appellee recovered $1,114.70, with interest from the 18th of May, 1896; and thereupon Ware applied for and obtained an appeal, from one of the judges of this court.

The appellee, under rule 9, asks to have the errors committed against it corrected in this court.

The first question to be considered is whether the appellee is within the jurisdiction of this court to grant the relief asked for. The decree of the court below, principal and interest, on the day upon which it was.rendered, amounted to $1,170.40. The property was advertised to be sold for the payment of a debt, ascertained as of the 30th of April, 1895, of $1,462.46. To this the circuit court should have added, according to the contention of the appellee, premiums and Interest from the 30th day of April, 1895, to the 16th day of March, 1897, $330, making an aggregate of $1,790.46, from which deduct the decree given by the circuit court, and the sum of $622.06 is the sum put in controversy under rule 9 by the cross appeal.

The circuit court held that the contract entered into was a Virginian contract, and usurious. The contention here is that it was a New York contract, valid according to the laws of that state. The bond was given by James M. Ware, of the city of Roanoke, to the Bankers' Loan & Investment Company, a corporation incorporated under the laws of the state of New York, in the penal sum of $3,000, to be paid to the said company, its officers or assigns, at the office of the association in the city of New York. The condition of this obligation is that Ware, having obtained a loan of $1,500 by way of anticipation of the value of 15 shares of the capital stock of the association, had thereby become liable, in accordance with the articles and by-laws of said company, to pay a premium of 50 cents per share per month, and the monthly install-ment of interest, making premium and interest $15 per month, during the continuance of the loan, which he had bound himself to pay to the company, its successors or assigns, "at its office."

If Ware performed all the various conditions required of him according to the tenor and effect of his bond, until the 15 shares of stock became fully paid, and of the value of $100 per share, then the obligation entered into was to be void; otherwise to remain in full force and effect. The $1,500 advanced was paid to the obligee in Virginia, and its payment was secured by a lien upon real estate in Virginia.

In the case of Crabtree v. Association (Just decided) 29 S. E. 741, we reached the conclusion that, under the laws of this state, dealings like those disclosed by the record, between Ware and the building association, are usurious, unless authorized by a charter granted by the legislature. It was there declared that the theory of a partnership among the members of a building association could not be invoked to sanction practices otherwise usurious; and the authority of the case of Silver v. Barnes, 6 Bing. N. C. 180, and of the courts which followed that decision, was denied. It is also decided in that case that the Acts of 1893-94, p. 560, had no retroactive operation which would...