The Findlay Jeffersonian. [volume] (Findlay, Hancock County, Ohio) 1870-1881, 1874-11-20
From the Cleveland Leaderl
BUILDING AND LokH AsSocIA-
TiORS.
An Adverse Decision on Their Right To
ENIEa Intere-I

A decision second in Importance 10
very few that have been rendered by the
| Courts in the State. was rendered yester-
day by Judge Barber, speaking the sem
| timentS of the general term of the Su-
| perior Court. In 1867 the Legislature of
the State passed a law incorporating
Building Societies, with the ostensible
object of enabling the working classes
to combine together TO procure homes
Tor themselves. Under that law some
one hundred Building Societies have
been organized in the State, having
somewhere near 400, 900 members. As is
usual, large number became members
with the purpose of obtaining the bene-
tits which the law conferred, but a very
large number Joined these Societies with
speculative motives.
There are fourteen of the associations
in this city, and among them is one
called THE Forest City Land and Build
ing Association" 1t appears the custom
was in this society to put up a sum of
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 the stock
of the borrower was cancelled and re-
deemed 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 81. 900
The society above referred to had had
among its members a Mr.. Farrell E. Gal
lagher; it appeared that in July, 1867,
lie made loan and bid for the right of
precedence 40 1-2 per cent. and received
in cash from the Society S303 on three
shares, and had to give the Society his
note and mortgage for $500. He contin-
ued to pay into the Society until he had
paid S419. In consequence of default.
the Society commenced suit in October
last against him On his note for $500. and
to fOrclose his mortgage. The case was
tried at the May term of the Supreme
Court before Judge Griswold Messrs.
Estep 4 Burke, and Kerruish appearing
for the Building Society, and Messrs.
SlutZ & Lavan appearing for Mr.. Gala
CHER. On the hearing of the case the
Court gave Judgment for the Society in
the sum of $40, and decided that he
should pay them S6 q month during its
existence. The counsel for Mr.. Gala
her excepted, and it was taken on bill of
exceptions before the General Term of
the Court, SIutz and Davan appearing
for Gallagher, and Messrs. Estep &
Burke, and Kerruish appearing for the
Forest City Building Society. Judge
Barber delivered 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 virtue of which was organized
should be literally construed.
SecOnd-That so far as the law con-
ferred unusual privileges and extraordi-
nary powers, it should be strictly con-
strued.
Third-That these associations have
four modes of raising money.
1. By stated dues.
2. By fines.
3. By interest on loans to its mem
bers.
4. By premiums paid by members for
precedence in taking loans.
Fourth-The law gives no power to
collect as interest more than the legal
rate.
Fifth-These associations cannot col
lect 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 to the borrower con-
stitute the loan.
The decision of the Court was that
the Judgment of the Court below should
be reversed. That when suit was COM
menced by the Association against Gal
lagher, he had overpaid them S179, and
the suit against him should be dismiss
ed. Judges Jones and Griswold conce-
ded in opinion with Judge Barber, Judge
GriswOld remarking that in his decision
in the court below he felt constrained to
accept for his guidance decision of the
District Court, and not because he ex-
pressed his own opinions, but as the Su-
preme Court had allowed a writ of er-
ror in the case tried before the District
Court, he felt that the case was laid open,
and he also cOncurred in the opinion OF
Judge Barber.
Mr.. Estep, on behalf of the Society,
took exception to the ruling of the
Court.