Case ID: ohio-cc-ns_4/html/0103-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

BUILDING ASSOCIATIONS — USURY.
    [Circuit Court of Lucas County.]
    Haskel A. Spies et al v. Southern Ohio Loan & Trust Co.
    Decided, 1902.
    
      Premiums and Fines — Imposed by Building Associations — When Reasonable are Not Usury — Section 3836-3 Not Unconstitutional.
    
    The provision of Section 3836-3, declaring that dues, fines, premiums or other assessments imposed by building and loan associations shall not be deemed usury, although in excess of the legal rate of interest, is not unconstitutional. Mykrantz v Globe Building & Loan Association, 19 C. C., 51, not followed.
    In this action the Southern Ohio Loan & Trust Company, a building and loan association organized under the laws of Ohio, brought suit against Spies and others to foreclose a mortgage executed by Spies and his wife to this company, securing a loan of $1,000, advanced to him on his stock for that amount in the company, and also to secure the payment of interest, premium, fines and other charges which might be assessed against him by the company. Default having occurred the company sued for the principal of $1,000, together with $17.71 interest and premium and $3 fines, and further alleged that there would become due and payable from and after July 13, 1900, fifty cents a month as dues on each $100 share of stock, and also interest at the rate of six per cent, per annum, premium at the rate of 16 2-3 cents per month on each share, and fines at the rate of ten cents a month on each share, so long as the defendant remained in default for payments. The defense set up on behalf of Spies was that the fines were unreasonable, and that Section 3836-3 under which building and loan companies collect premiums is unconstitutional. Judge Pugsley in the common pleas court sustained the constitutionality of the statute and entered judgment for the full amount claimed.
    
      Herbert Orr, for plaintiff in error.
    
      Orville S. Brumback, for defendant in error.
    Haynes, J.; Parker, J., and Hull, J., concur.
   In this case suit was brought to foreclose a mortgage upon a loan made by the defendant company, which is an incorporated building and loan association of the city of Cincinnati. A judgment was taken for the full amount prayed. The ease is brought up on error raising questions as to whether certain payments made by way of premiums and fines charged by the company are in the nature of usury; and whether the law of Ohio regulating these companies is unconstitutional. The case of Mykrantz v. Building & Loan Assn., 19 C. C., 51, has been cited, by plaintiff in error. We have not time to discuss this case at length, but we have investigated this matter fully and carefully under the decisions of the Supreme Court, and are satisfied that the decisions of the Supreme Court are in favor of the companies. We have heretofore sustained cases in which the building and loan association law has been held constitutional; and now sustain these charges in this case as being reasonable under a constitutional law.

The judgment of the court of common pleas will be affirmed.