Equitable B. & L. Ass'n v. Vance

The opinion of the Conrt was delivered by Judge Benet, A. A. J. Mary C. Vance, the defendant and appellant in this cause, subscribed in June, 1891, for thirty shares of stock in the Equitable Building and Eoan Association, a corporation created and existing under the laws of Georgia, with its principal office in Augusta, Ga. On 5th February, 1892, the defendant borrowed $1,500 from the association, and executed her bond and gave her mortgage to the association on land in Eaurens, S. C. On condition broken the plaintiff brought its action for foreclosure on August 14, 1895. Besides a general denial, the defendant set up the plea of usury, and also claimed that sundry large payments made by her should be credited on her bond. The cause came on to be heard by his Honor, D. A. Townsend, Circuit Judge, who in his decree held that, the contaact was to be performed in Georgia, and to be construed according to the laws of that State; and that according to the laws of Georgia the contract in question was not usurious. The Circuit decree and the exceptions of the defendant should be embodied in the report of this case. Indeed, there is little need of adding anything to the decree of the Circuit Judge, which in our judgment should be affirmed. The leading questions raised by the pleadings and the exceptions are: 1. Was the contract to be performed in Georgia or in this State? 2. Was the contract usurious? 1 The issue as to place of performance is a mixed question of law and fact. The Circuit Judge reached the conclusion that the parties to the contract intended that it should be performed in Georgia. In this, after carefully [408] considering the testimony, we can find no error. After thus concluding, it followed as a matter of course that the defense of usury would fail, because it is laid down in the law of Georgia “that no fines, interest or premiums paid on loans in any building and loan association shall be deemed usurious-.” 2 The Circuit Judge might have gone further and held that, even under the laws of this State, the contract was not usurious. Referring to the rate of interest charged, he says in his decree: “It is not more than six per cent., because $7.50 per month is exactly six per cent, on $1,500. The other payments are independent of the loan, and had to be paid, whether'a loan was made or not.” Here he touched the very marrow of the matter, when he indicated that the payments made by the defendants referred to two distinct transactions, which should not be blended. In one she acted as a stockholder, and paid monthly instalments on the stock she had purchased; in the other, she acted as a borrower of money, and paid interest monthly on the loan. The testimony shows that the defendant subscribed for thirty shares of stock in the association, in June, 1891, and agreed to pay $15 per month on those shares until they should mature. She thus became a stockholder in a money-lending concern. Seven months later, in February, 1892, she borrowed $1,500 from the association, giving her bond and mortgage to secure the loan, and agreeing to pay, as interest on the amount borrowed, $7.50 per month. She thus became a borrower from the money-lending concern of which she was a shareholding member. As a holder of thirty shares of stock, she had to pay $15 a month, and this whether she borrowed money from the association or no. As a borrower of money, she had to pay $7.50 a month as interest on her $1,500 loan — which is at the rate of six per centum per annum, a rate less than that allowed by law in this State. Her plea of usury is founded on the mingling together of 'these two distinct transactions — the paying of the monthly [409] instalments, or stock-dues, and the paying of the interest monthly. Having thus ascertained that she paid interest at the rate of only six per centum per annum, it only remains to declare that the claim of usury cannot be sustained. 3 The views herein expressed are not inconsistent with the decisions of this Court in the case of the Building and Loan Association v. Dorsey, 15 S. C., 462-470. The facts in that case show that the borrower was required to pay a discount or premium in addition to the interest charged ; and he had this to pay on a larger sum than was actually lent to him. The aggregate amount of interest and discount exceeded the legal rate of interest. But in this case no discount or premium is charged; and the only interest paid is upon a sum of money actually advanced to the defendant by the association. And we have seen that the interest paid is less than the legal rate. Several exceptions were taken to the rulings of the Circuit Judge in admitting certain testimony. We have found no error in the said rulings.' It is the judgment of the Court, that the judgment of the Circuit Court be and the same is hereby affirmed. 4 Petition for rehearing filed May 21, 1897, upon which the following order is endorsed, June 9: Per Curiam. After a careful examination, this Court is unable to discover that any material fact or principle of law has either been overlooked or disregarded; there is, therefore, no ground for a rehearing. It is ordered, that this petition be dismissed, and that the stay of the remittitur heretofore granted be revoked.