The state chronicle., 1893-05-13
BUILDING AND LOAN ASSOClA-
TION CONTRACTS.

TION CONTRACTS.
Considerable interest is felt in the
Building and Loan Association case
now pending, entitled J. S. Meroney
VS.. The Atlanta Building and Loan
Association, and we find in the VIII
mincton Star synopsis OF the COM
plant. The substance OF the mat
ter iy that Meroney, in February,
1890, subscribed for fvs shares OF
stock in the Building and Loan
Association, and on September II,
1890, borrowed $500 from it, giving
a mortgage on some land in Chero-
kee county, where the association
had local Office, and pledged his
stock for the repayment of the
money according to the usual man
ner end practice of building and
loan associations. The note and
mortgage stipulated on their face
that the contract was made in ref
erence to the laws Of Georgia, and
was to be Georgia contract Me-
roney psid his interest and dues for
four monshs, and then stopped. FL
ns.ly he offered the company to re-
pay them the 5000 and interest at 6
per cent, claiming credit for the
premium and other moneys paid, as
if he was on the footing Of any or
dinary debtor. This the company
refused, demanding payment ac-
cor3i.g to tie stipulations Of the
contract, and proposed to sell the
mortgaged land under the power OF
sale il the mortgage.
It wa3 stated that the Georgia
courts Lad held that the contract
was not usurious, and therefore tie
company had put in the note that
it was Georgia contract.
The Superior Court held that the
contract was usurious, and that BE
roney was entitled to an account
and for an Injunction against the
sale Of the land until it was ascer
tanned how much he owed. There
was an appeal from that order, anc
the Supreme Court fled this opin
ion
Per Cdriam-If it Is true, as tht
plaintiff alleges, that the contrac
set out IN the complaint was made
payable in Georgia to avoid th'
usury laws Of this State, that con
tract will be adjudged to be usuri
Gus, whatever may be the law o
that State. There is, therefore, /.
serious issue" between the parties
which, under the rule eatablishe>
by Whitaker vs.. Hill, So \. G. 2
Harrison va. Bray, 81 \. G. 488, an
Davis & Gregory vs., Field, at thi
term, entities the plaintiff to hav
the restraining order continued il
force 10 the hearing No error"
Tie court, however, we suppos
did not intend to pass on the ques
ton whether tie contract was usuri
Gus or not, for that was not neces
ssry. Il only sscertained that tn
man whose property was about t
be sold was not asking an injunctio
on frivolous grounds. There was
serious contention as to the amour
due, and therefore the restrainin
order was proper,
We do not understand that tn
contracts Of Building and Loan Al
sociations are necessarily usurious
and even this particular contret
may be held free from the taint {
usury, when the Supreme Cou1
comes to examine it. But if four
to be usurious by the laws of tn
State, the fact that it was declare
to be Georgia contract will IL
make it valid and binding. It cal
not be enforced in North Caroiin
if usurious under our law.
We have Building and Loan ASS
Citations doing business in this Stat
and their contracts we assume a
legal and not tainted with usur
Foreign companies desiring to {
: business in North Carolina can nal
' similar contracts, but they cam
avoid our usury laws.