San Antonio daily light. [volume] (San Antonio, Tex.) 1886-1907, 1894-03-24
THE VAGARIES OF THE LAW
AS SHOWN IN THE SUITS OF THE
INTERNATIONAL LOAN AND
BUILDING ASSOCIATION.
Conflicting Judgments Given by the
Different Courts, and the State
Supreme Court Reverses Own De-
clsion Sustained by Other States.

Vagaries of law! That is good, and
there are many. At this writing am re-
minded that a short time ago young but
honOred lawyer went to Washington to
get position, but, uuder civil service
rules, had to be examined. What is
law?' asked the leading examiner.
Law" replied the lawyer, 'law is er-
er-er-er-er, law" Il know that" was
the examiners answer, but what is
law?" Law" responded the nervous
applicant, sis, er-er-er, the last
guess of the Supreme court" lie passed
and was right, for the decisions, though
varied and contradictory, control the
judgments of the lower courts. And here
in lies the tale.
Now there are several suits in which
various building and loan associations are
interested that are in the courts, and de-
cision In these cases vitality effect their
interest, nay more the life of such assoc
iations, that have done good in aiding
many to build their own homes, depends
upon the decision in those cases. In fact
there are thousands now that possess
nice and comfortable homes that would
never have been so favored had it not
have been for such associations. OF
course for this the borrowers have paid a
fair interest which non borrowing mem
berS have made as profit but the advant-
age on either side is apparent.
Among the local association is the
International Loan, and Building as,
ISOLATION. which has been OF equal
advantage. 1t has suit against Thomas
"a. Abbott that Is attracting universal
attention, not only In the state, but In
all states outside 1t In fact secretary.
Lindner has received hundreds of letters
enQuiring for data of the case which is
recognized as one of vital Importance.
The suit is that of the International
Building and Loan association VS.,
Thomas II. Abbott and the facts of the
case are as follows:
la January 1884 Mr.. Abbott became
member of the association and subscribed
for seven shares of the faced value of
500 each for which he agreed to pay 81
per month on each share until maturity
of the series. In April 1886 he purchased
on the same terms and conditions six
additional shares of the sixth Series. He
then applied for loan upon his thirteen
shares and on this was allowed to borrow
$40. which was paid to him, he eXecut-
ing his note for 5000 at per cent TO be
paid for his matured stock. BY the terms
OF the contract MIR. Abbott was required
to pay Sl3, i. e. 81 per month for each of his
thirteen shares, and Sl3 per month interest
month until the total value of his shares
would amount to 81 900 the face value of
the note. 1t must be borne on the mind
that Mr. Abbott, by payment of his sub
Scription for stock. shared in the pro-
fits of the association, even OF his own
interest, and only paid interest on S1,44O,
the cash actually received, although the
note bore nOminally the faced value OF
$3.50, the matured but not the then val
lie of the shares.
Mr.. Abbott kept this agreement until
November, 1890. and had paid on stock
1913, interest S7l5, in all Sl63S.
In June, 1891, the association resolved
that all borrowers in the first series who
had made ninety monthly payments,
ShOu Id be released from further payment.
Mr.. Abbott would have been entitled to
this benefit il he had not been seven
months in arrears of payments, by which
he forfeited such rights.
The suit was first tried before Judge
King, in the Forty fifth Judicial district,
Texas, who held that Sl3 per month in
tereSt on 81 ,440 was uSuriOuS, and char
acterized the premium promised by de-
PENDANT as a devise TO cover unlawful in
tereSt, although the S13 on amount ad-
vanced 81, 44O was little over 10 per cent,
and the association then was en-
Titled to charge II per cent. He
therefore gave judgment for the
defendant cancelling his thirteen shares
and directing that they be applied to
payments of the loan. He further ordered
that the association take nothing by their
suit and should pay costs.
AT this time an important suit bearing
on the case, was decided as reported in
Reeve VS.. Ladies Building association 49,
5. w. 9lS, in which the justice declared,
in precisely similar case, that the evil
dence shows that in each OF these tran
Sactious there were two separate con-
tracts: first the taking of the shares in
the association by the appellant and the
contract to pay for the shares monthly,
as stipulated; second the sale or transfer
of shares to the association in cOnSidera
ton Of an advance to the appellant and
in anticipation of their par value at the
time when the shares of the members
should be at par by reason of the accu
mutations of the association. When this
may be is uncertain as it must be depend
ent upon the prosperity of the association
but when these shares are at par the Dor
rowing members ceases to make his
monthly payments and interests on
the advance made him. What rate he
may pay is uncertain and cannot be
known until the final calculation is made.
The amount he may pay the association
may be far less, or it may be more than
the sum he receives, with the interest
thereon at the rate OF 10 per cent per an
mum. There is then in the transaction
an element of uncertainty that seems to
exclude the idea of the loan of money at a
usurious rate OF interest. Where the |
promise to pay sum above the rate OF
interest depends upon contingency and |
not upon the happenings of certain events |
the loan is not uSuriOuS.
This was really Just and equitable de- |
cSion for in it lay the true interests alike |
of these associations and members. |
The association appealed to the Su- |
preme cOurt and that legal light of Texas,