The Morning herald., 1877-09-28
BUILDING ASSOCIATIONS.


ment,of the rights Of members of Loar
Funds, and how far the contracts with such
societies are in derogation of the statute
against usury. Feeling that such informa'
4 tion Is properly demandsble by the public
q Of agjournalist we therefore comply, to
the best Of our ability, with the request.
Building Associations may be said to be
a corporate growth of Pennsylvania. They
existed in Philadelphia, Reading and
Pottsville prior to 1850, as an act was
passed on the 22d Of April in that year for
the incorporation Of such associations in
Philadelphia, Berks and Schuylkill coun-
ties, extended to Montgomery in 1851, Del
aware county iu 1852, Alles shany in 1858;
in 1855 to Bucks, Carbon, Lancaster, Le-
high, Mifflin, Juniata, Northampton and
Dsuphin, and in 1859 to all the State.
The law, incidentally and by implica.
tion, gave power'to the societies to make
bylaws and inAlct penalties for non-pav-
ament of dues. They speedily increased,
and their usefulness was vaunted on every
side. No doubt the small ventures men
took in those days did not materially
cramp them, and there were many in.
stances of poor persons acquiring a small
house through their membership in such
societies; but ten times as many thus early
were engulfed in their usurious NAV.
Up to 1859 the legal status Of Building
Associations in Pennsylvania, as regards
their power to charge usurious rates of in
terest and infict fines, was exactly, in all |
particulars, the same as it is to-day in Del. !
aware; hence fair and impartial review
of the decisions Of the Supreme Court OF
Pennsylvania affecting Building Associa-
tons, np to 1889, would by precedent and !
analogy throw light upon the rights of
members of Building Associations in Del
sware at present. In 1859 the following
law was passed at Harrisburg:- |
No premiums fines or interest on such
premiums that may accrue to the said cor
porstions, according to the provisions of
this act, shall be deemed usurious and he
same may be collected as debts o like
amount are now ty law collected il this
Commonwealth
1t will be seen tina. here is a grant Of
power such as no one OF the Delaware as.
sociasious pretends TO have. In fact, the
main grant is a powerto sell to the highes,
bidder, bat with the curious limitation
that the interest shall be six per cent. In
all the charters We have read there is This
striking proviso - |:
Proriei that the same" meaning by- .
laws, contracts, &C. Shall not be incon- :
sistent with this act, the Constitution and
lars OF the United States or the State OF
l. hwas held by the Supreme Conrt Of
Pennsylvania, in Bechtold vs.. Brehm,
Dering VS.. West Philadelphia Savings and
Association, and in the Premium
Funds Associations Appeal, tina, a Build.
ing Association tha, holds the bond Of one
Of the members for the amount advanced.
inclading premium, and that forfsiis the
membership Of the obligor and then pro-
ceeds on the bond, can only recover the
amount actually advanced. with interest a,
ak per cent, dedueting payments.
2. In the North American Building As
sociation VS.. Sutton it was held that stock
payments or monthly dues are no, ipsg
iaeto an e1tinguishment of the mortsssef
debt, though the mortgagor may 50 treat
them, at his option, in a suit upon the
mortgage
This decision created much feeling en-
the part of the friends Of Blilding ASsoci-
tions, and has been attacked in various
ways, but uniformly sustained in about
twenty otter cases, the last one being tie
Delaware Building Association VS.. Keller,
decided abou. two years ago.
3. In RUPERT VS., the Gutenberg Build.
ing Association it was held that purcha.
ser a, Sheriti's sale, subject TO Building
Association n,ortsa age is entitled to credit
for the value Of the shares ass sned As col
lateral security for the mortgage debt;
and the Association can only recover the
sum actually loaned, with interest. This
case was subsequently commented uponand
sustained in Hughes Appeal. The law is
different if the sale be made under mort
gage to a Building Association; the value
Of the stock assigned in the latter case. if