The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1874-11-06
BOILDING AND LOAN AssOCIA.
TIONH,
An Adverse Decision on Their Right
TO Extra Interest, -

TlONS.
An Adverse Decision on Their Right
TO Extra Interest. --
(From the Cleveland Leader, NoY.s)
A decision second in importance to very
few that have been rendered by the
Courts in the State, was rendered yester-
day by Judge Barber, speaking the genti,
ments Of the general term Of the Superior
Court. In 1867 the Legislature of the
State passed law incorporating Building
Societies, with the ostensible object Of ena'
bling tho working classes 10 combine to.
gether to procure homes Tor themselves.
Under that law some one hundred Build.
ing Societies have been organized in the
State, having somewhere near 100000
members. AS is usual, a large number
became members with the purpose Of oh.
tanning the benefits which the law confer.
red, but o very large number Joined these
Societies with speculative motives.
There arc fourteen OF tho associations
10 this city, and among them is one
called "ThG Forest City Land and Build.
ing Association" 1t appears the custom
was in this society 10 put upa sum ol
money for competitive bidding, and TO the
member who offered to give the highest
premium the loan was made. As soon
as the loan was made tho stock OF the
borrower was cancelled and redeemed by
the society, and he ceased to have any
further interest In the profits. In some
cases the premium offered by some Of the
members was fifty per cent, and where
he received $500 he had to give his note
and mortgage for $1,000.
The Society above referred to had
among It's members u Mr.. Farrel E. Gal
lagher. II appeared that in July, 1867,
he made loan and bid for the right Of
precedence 40i per cent, and received in
cash from the Society $3O3 on three
shares, and had TO give the society his
note and mortgage tor 5000, lie con-
tinued TO pay into the Society until he
had paid $40. In consequence Of dc.
fault the Society commenced suit in Oc-
tober last against him on his noie for
5000 and 10 iOreClose his mortgage. The
case was tried at the May term Of the
Supreme Court before Judge Griswold,
Messrs. Estep u Burke and Kerruish 8p-
pearing for the Building Society, and
Messrs. Slutz Il Lsvan appearing lOr Mr..
Gallagher. On hearing OF the case the
Court gave judgment Tor the Society in
the sum OF $270, and decided that he
should pay them So month during its
existence. The counsel for Mr. Gala
CHER excepted, and it was taken on bill
oi exceptions before the General Term
oil the Court, Sluiz & Lavan appearing
for Gallagher, and Messrs. Estep tS Burke,
and Kerruish appearing for the Forest
City Building Society. Judge Barber de
livered the decision OF the Court and laid
down the following propositions
First-That for the purpose for which
the society was organized, the law under
and by vlrtue,oI which it was organized
should be literally construed.
sccond-That so far as the law con-
ferred unusual privileges and extraordi-
nary powers, il should be strictly con.
strued.
Third-That these associations have
four modes OF raising money.
/. BY stated dues.
@ By fines.
8. BY interest on loans 10 its members
A By premiums paid by members ior
precedence in taking loans.
Fourth-The law gives no power tC
collect as interest more than the legal
rate.
Fiith-ThGse associations cannot collect
interest under the name of fines.
Sixth-They cannot discount their
loans, nor can they charge interest on
premiums paid for precedence in taking
loans.
Seventh-The amounts actually paid
by the Association 10 the borrower con.
slitute the loan.
The decision of the Court was that the
Judgment Of the Court below should be
reversed. That when suit was commenc'
ed by the Association against Gallagher
he had overpaid them $170, and thai the
case against him should be dismissed
judges Jones and GriswOld COnCurred in
opiEi0n with Judge Barber, Judge Girls
void remarking that in his decision in thG
court below he felt constrained 10 &C
Cept for his guidance decision of the Dis
triCt Court, and not because he expressed
his own opinions, but as the Supreme
Court had allowed writ OF error in thu
case tried before the District Court, h,
felt that the case was laid open, and HI
also concurred in the opinion Of Judgt
Barber.
Mr.. EStep, on behalf OF the Society
took exception to the ruling OF the Court