Juniata Building & Loan Ass'n v. Mixell

Mr. Justice Sterrett delivered the opinion of the court, The mortgage on which the scire facias in this case issued, was executed and acknowledged, in due form, by Mixell and his wife, to secure a loan which he, as a stockholder, procured from the Juniata Building and Loan Association. It cannot be doubted that it was competent for Mrs. Mixell to unite with her husband in executing a valid mortgage on her separate property to secure his debt to the association, and the only question is as to the amount of his indebtedness. If, under the facts found by the jury, he is liable for the amount of the loan, including premiums, fines and interest on premiums, his indebtedness, at the date of the verdict, has been ascertained to be $450.38 ; but, if he is not liable for premiums and fines, it was only $313.28. The difference between these sums is the subject of controversy. The special verdict of the jury finds, inter alia, that the loan was made without inquiry by the plaintiff as to the purpose for which the funds were to be used, and without stipulation or condition as to how they were to be expended, and that they were, in fact, applied by Mixell to the payment of his debts. In view of these facts, the learned judge was of opinion that the association had no right to enforce the payment of the premiums [316] and fines ; that in making the loan under the circumstances found by the jury, the association transcended its authority and was no.t entitled to recover any part of the premiums and fines, for the reason that they were usurious, and accordingly he entered judgment for the lesser sum found by the jury. In this we think there Avas error. The fourth section of the Act of April 12th 1859 makes it the duty of the officers of such associations to offer, at stated times, the money on hand, and loan the same in open meeting to the stockholder who shall bid the highest premium for the preference or priority of loan; and the sixth section declares that no premiums, fines or interest on such premiums shall be deemed usurious, and the same shall be collected as debts of like amount are now by laAv collected. We have recently held, in Wolbach and Wife v. The Lehigh Building and Loan Association, ante 211, that these' provisions do not apply to borrowers who are not members of the association, or who- are not mi juris and incapable of incurring liabilities incident to membership; but, the language of the act is too plain to admit of any doubt that, as between the association and its members, the intention was to legalize the payment of premiums and fines and preserve such loans from the taint of usury. In Selden and Wife v. The Reliable Savings and Building Association, 2 Weekly Notes of Cases 281, it is said that in a scire facias on a mortgage given by a member to the association, ‘‘ it is no defence to say that the borrower has only received a certain sum; for the difference betAveen that and the face of the mortgage is presumptively the premiums, which the act makes legal.” There is nothing either in the letter or the spirit of the act, or in the charter of the plaintiff in error, that makes it the duty of the association, to inquire for what purpose loans are being obtained, or to require any stipulation from the borrower as to the use he shall make of the money, or in any manner to supervise or control its disbursement. The first article of its constitution declares that the association shall have such object and exercise such poAvers as are conferred by the Act of April 12th 1859 ; and the fourth article makes it the duty of the officers to hold stated meetings, at Avhich the money in the treasury shall be offered for loan, upon the conditions and according to the directions and provisions of the fourth and fifth sections of the same act, It thus appears that the charter authority is co-extensive with the power conferred by the act under which the association was incorporated. The learned judge is no doubt correct in saying that cases of extreme hardship sometimes arise under the operation of the law governing building and loan associations, but it will perhaps be found that they are generally traceable either to the fault or misfortune of the parties themselves rather than to the law under which the associations are organized. Whether this be so or not, if there [317] is anything wrong in the law, the legislature must be appealed to for correction of the evil. The judgment of the Court of Common Pleas is reversed and judgment is entered, on the special verdict, in favor of the plaintiff for $450.38 and costs, with interest from April 21st 1876, the date of the verdict.