The Nashville daily union. [volume] (Nashville, Tenn.) 1862-1866, 1866-02-20
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BUILDING ASSOCIATIONS.

BUILDING ASSOCIATIONS.
Important Decision by the Suprem
Court.
&. T.. II. Martin vs.. the NashvilI
Building Association et al.
This suit IS brought by the complainant
against the defendants, body polite ans
corporate, IN the city Of Nashville, organ
lied under the provisions Of an act passe,
by the General Assembly OF the State o
| Tennessee, on the 4th Of February, 1854
The object and purpose, IS expressed il
the act Of incorporation, was 70 form ;
mutual benefit and stock company, to ena
bic the working men in the city Of Nash.
vile 10 become their own landlords; all th,
powers incident 10 corporations were con.
ferred.
BY the 2d section Of the act the power
was given the members Of the corporation
TO adopt sach constitution, bylaws and
regulations for itsgovernment, and 10 choose
such officers and SCENTS for the transaction
Of their business, and such constitution
rules and regulations should have the force
and effect OF legal euactments upon It's
members; provided that such constitution,
rules and regulations shonld not conflict
with the law Of the land.
The bill alleges that by the act Of incor-
pOration the Association was a mutual ben
eft and stock company, having for its OBJ
ieet TO assist the members thereof 10 become
their own landlords or owners Of such real
estate as they might need, and to carry out
this object said Association was authorized
10 lean money at a rate not exceeding six
per eent.per snnum, on mortgage or by deed
OF trust, on real estate. Said Association was
organized on the ID Of August, 1854, and
adopted constitution and bylaws for its
government. The complainant became the
subscriber for twenty sharesOf stock in said
company, aud as such paid into the treasury
thereof $50 per month, or one dollar per
share per month, and he continued 10 psy
the same from the 2d Of August, 1854, TO the
3lst OF December, 1886, when he borrowed
OF bought OF said Association q certain sum
Of money, under the rules and regulations
OF said Association, as set forth in article
5th, as adopted by the Association or com
pany.
The complainant being the owner Of
twenty shares, they were supposed 10 be
NtENu C1sNu0 hnEn AAt AHtDClAAlOu M0AAQ
wind up, and it was 10 wind up when said
Association had a sufficient capital TO make
each share worth $500, which was calculated
would be in about ssven years from its com
mencement.
The complainant was allowed 10 bid on
the sum Of 81 900 which he did, and bought
the same at 371z per cent discount, or ss it
is termed by them " the premium OIL" and
he did receive on the 3lst Of December, 1856,
the sum of g, 500, and from that time he had
been compelled 10 pay TO said Association
the sum OF $40 per month, instead of $50 as
previously. Before receiving the said
3, 500 he executed on the said 31st Decem-
Der, 1856, a mortgage to the Building Asso-
citation TO secure the repayment of the said
81 ,00o. He Furthermore executed to the said
Association, his bond, in the final sum of
s., 600, conditioned for the payment Of the
said sum of 81 ,OO0, by monthly installments
of $40, and conveyed by assignments to said
Association a certificate Of stock Of the 20
shares TO secure the payment Of the S4, 900.
By the provisions ofthe deed, should be fail
TO pay the said sum Of $40 per month for a
period of three months, then the Treasurer
Of the said Association, should advertise and
sell the bonds as Trustee, without the equity
of redemption, at public sale, TO the highest
bidder, and receive the purchase money, or
u sufficient amount thereof to pay the said
sum of 81 900, or any balance lhereofunpaid
with any fines aud penalties indicted for
default of payment.
By the 4th Section, Article 9Th, Of the
Constitution, if any Stakeholder fails To pay
his monthly dues, he iorfeils ten cents for
every such failure, and for each dollsr thus
unpaid, which is charged and added to the
monthly dues. From the 3lst OF December.
q. kn LET Of Afuunh
aud three months, the complainant eon
tinued to pay said $40 per month-naking
the sum of 81 ,660, when he ceased 10 nav,
and the Association now claims to be due
on the 3lst Of October, 1850, the further sum
of $3.50.
On the 18th day Of January, 1853, the
complainant bought Of 4 StOckholder, by
paying the amount previously paid in by
said St0ckholder, 20 other shares, on which
he borrowed in the manner previously
stated, the supposed value OF 20 shares,
81 900, at premium Of q per cent, and
received s., 100 IN cash, and gave mortgage,
bond and assignment as before stated, ana
continued 10 pay till the 3lst of March,
1860, fourteen months, $500, and said Asso-
citation claims TO be due the further sum of
| S2S0 on the l4th Of October, Is60. The
lands were adyertized to be sold under the
trust deed. The complainant charges that
the contracts are usurious, that the deed
and assignments were made to secure
money, a large part Of which is usury-
that the monies still claimed are, or a large
| part thereof, is usury. The bill prays that
the sale be enioined, that an account be
taken to ascertain the amount of usury
heretofore paid by him, and the amount
now claimed ,thatth defendants be enioined
| from collecting the same-that the amount
he now owes be ascertained and declared
The amended bill charges that the stock
assigned TO secure said loans has been sold
by the association, and that the same be
credited on his debt. The defendants ad.
nit corporation and organization as charged
refer 10 their charter and bylaws, fol
their power and authority, and particularly
70 lOsu money, 10 their'stockholders. They
admit that the association sold the stock o
the complainant and it brought SS42O, fol
/ which they gave the complainant 0 credit
but when the credit was given the associs
tion was entitled 10 the monthly install
ments paid in. The act Of incorporation
and the constitution, bylaws and regula
tions, were made part Of the bill. Tn,
mortgage deed executed by the complain
ant recites that whereas c. +. II. Martin
has this day executed MS land by which h
is firmly bound TO the Nashville Building
Association in the sum Of s, ,000, conditicne,
for the payment Of $4,000, in the manne
following, that is to say, $40 on or beior
the last day of each month succeeding tn
date Of these presents, until the whole sun
OF 3 600 be paid, and satisfied. Now, &c
The Chancellor was Of opinion that th
contract was usurious and that the consti
tuition, bylaws and regulations operate
injuriously aad oppressively upon the mem
hers and borrowers of its money, and tina
the effect was 10 exact usury from the com
plainant.
An account was ordered from which De
PENDANTS have appealed 10 this court.
The principal question presented for on
. | consideration ~ ''was this q usurioRs con
/ tractg' Usury is an "ilegal and oorrur
| agreement whereby more than legal intel
= | est Is taken for the loan Of monev''-5t
Hump. R. 405. Il is not an inference
law, but q question Of intention 20 be mad
! out by the facts proved, Ham;hon vs. Moor
. | 7th Hump. L. 50. To arrive at correct cor
emsious in this csse 10 becomes necessary
!. examine the art Of incorporation of the q,
: fendants, and the constitution adoptel d
l. | them for their government, and the tram
/. | action Of their business, ami see if the nos
: ers assumed by them are within the nr5vii
Z ion az the act and in violation Of no LAW
= the land, and particularly the law of usur-
3, THE object and purposes of said act crestiu .
tbe Association was ~ Incorporate a putu,
bene6t and stock company-hayipg for i
object 70 assist the members thereof to ),
E. come their own landlord, or the owners
sprb real estate as they may need instead
y, bains renters thereof All the power
: rirhts. privileges and immunities which a
incident 10 eorp0raiions were granted
them. Thev we're AUTHORISED to sdopt
! constitution. rules, by-lsWs, and reenlatiai
that were 20 have the force Of leesl eusc
4 ments. uroBilaa. they aid not coadiot W.
the laws Of the lsud. By ihe Srd section
the set the capital stock Of the corporate
Wa divided into shares Of one dollar u
ninth. each 20 be paid monthly Until i
corporation shall determine aid close. q
he capital stock shsll Dot be loss than s. o,
$. to- more thaa s. .eaa shsrsa- Sec stu pl
v{5es that the iduds ol the corporation shi
be loaned cut 70 the stockholders On su
ts-rns All conditions ard under such reg
lsiions as the corporation may preicF1oe
jts constitution and BY y-iaW5s provided {
same be secured by real estate. sad a
- monies not wanted hy tae atoo kaoiaers m
n Be losaei s. others 8; SIX Per cent seeui
hv real estate. Section 5th gives tnem 20
81 70 take and hold resl estate BY moriga
y. conveved in trust 20 secure the iunez -o-
=, "a. Section 9Th provides, when rssh $40,
~ holder for each and every share o. siock
he him or her hel3 shall hs eatitled q
os. eeive the sum Cf S2ao on distribuiion Qt I
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