Bismarck weekly tribune. [volume] (Bismarck, Dakota [N.D.]) 1884-1943, 1891-07-17
The Case in Question Was the Yer
mont Loan Company VS..
E. L. Withheld.
The Opinion is by Judge Bartholo-
NEW and is Concurred in by
Judge Wallin.
[From THURSDAYS Daily

being a legal construction of the famous
usury law of 1890. The action was COM
menced before Judge Templeton in
Grand Forks by the Vermont Loan and
Trust company vs. Fl. L. Whitfield. It
was brought to recover from Withheld
Judgment on a promissory note and the
statement Of the case on the trial showed
that on July l, 1890, Withheld executed
and delivered to the company a note for
1915, due in five years, and bearing in
terest at the rate of 7 per cent. At the
time of the execution of the obligation
Withheld received $500, and no more. By
agreement of the parties the remaining
1915 was retained by the loan firm as a
compensation or fee for making the loan.
The point in controversy was whether
the transaction comes within the saving
clause of the statute, which provides that
a fec may be retained if the interest and
fee together does not exceed IL per cent.
per annum. The compensation and in
terest at the rate of 7 per cent. for the
time of the note-ive years-does not
exceed - per cent. and hence the validi-
ty of the note is claimed. The court
holds that, as it exceeds the sum of IL
per cent. for the first year, it is void. The
defendant also claimed that the statute
was void by reason of making an excep-
ton in its operation in favor of building
and loan associations. This point is over
ruled by the court. The decision of
Judge Templetcn was against the law,
but by decree of the supreme court this
is reversed and the action
is dismissed. The practical effect of the
law will be to do away with the fee bust
ness in making loans, which runs up the
rate of interest paid the first year. The
following is the syllabus:
l.. Section 4 of chapter 1874, laws of
1890, provides that in all loan TRANSACT
tions the written contract shall correctly
state the amount received by the bor-
rover, and the rate Of interest to be paid,
and a failure so to do renders the con-
tract usurious and void, except as other
wise in the chapter provided. Section 7
provides that a loan broker or other per-
son may receive a compensation for pro-
curing a loan when such compensation
and the interest stated in the contract,
together do not exceed IL per cent. per
annum in the aggregate. In a TRANSACT
ton where no middleman was employed
a note was given for 1915, due in five
years with 7 per cent. interest. The bor-
rover received $500, and no more, $75
being, by agreement, retained for max
ing the loan, and the amount 80 retained
added to the 7 per cent. stated in the
note did not exceed - per cent. on $500
fer five years. Held, that if the transac.
ton was usurious under section 4 it was
not saved by the provisions of sec.
ton 7.
2. Apublic law of universal interest to
the people of the state and embracing all
the citizens of the state, or all of a GER
tain class, or certain classes of citizens,
and not limited to any particular loca-
lily, is a general and not a special law,
as the term is used in the constitutional
inhibition against special legislation.
3. A statute that grants nc privileges
or immunities except such as would ap-
ply to all citizens under the circumstan-
ces and conditions expressed in the sta
tute, does not violate the constitutional
provision against granting special privi-
leges and immunities.
4. The constitutional requirement
that all laws of a general nature shall
have a uniform operation is satisfied if
the benefits and burdens of such law fall
equally upon all members of the class
or classes upon which it does operate.
5. The legislature has the right to
classify persons or subjects for the pur-
poses of legislation. Such classification
must not be arbitrary, but
must be based upon such differences in
situation, condition and purposes be-
tween the person and things included
in the class and those excluded
therefrom, as fairly and naturally sug-
gest the propriety of and necessity for
different or exclusive legislation in the
line of the statute in which the ~classii-
cation appears.
6. The dealings of building and loan
associations with their own stockholders
| differ from ordinary loan transactions to
such on extent as to warrant the legis-
lature in excepting such associations as
to such dealings from the operation of
l oAO P1oNAo4OAo VI II 6OAOAoA uooAy low
7. In constituting a particular Sec
ton of a statute it is the duty of the
court to ascertain the intent Of the legis.
lature and for that purpose it should
consider the entire statute and It's gener-
| al subject matter, as we'll as all other
statutes in pari materia, and where the
court is satisfied that adherence to the
strict letter of the law 1would defeat the
object and intent of the legislature it is
the duty of the court to regard the in.
tent ever where to do so, it is compelled
to restrain the application Of the letter
The opinion of the court is by Judge
Bartholomew and is fully concurred in
by Judge Wallin. Chief Justice Corliss
refrains from expressing any opinion as
to the true meaning and scope of section
4 of the statute on the grounds that this
part of the law was not fully argued be
fore the bar of the court and hence he il
not free to assume the responsibility o.
constituting it. The opinion covers
twenty pages Of typewriter and is al
exhRustiVe discussion of the statute ii