The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1894-03-15
USURY.
THE SUPREME COURT RENDERS AN
IMPORTANT DECISION.
They Hold in the Case Of Abbott VS.. Inter
national Building & Loan Association
that the Contract is Usurious-A
Great Decision.


Thos, H. Abbott and wife VS.. Inter
national Building and Loan Associa
ton, from BeXar. About January
1881 Thos. H. Abbott subscribed fol
seven shares of the first series of stock
in the International Building and
Loan association, and in 1886 he sub
scribed for six shares of the fifth So
ries of the stock in said association
the shares being 500 each. On the
18th day of April, 1886, Abbott Dor
rowed from the association $1440 for
which he gave the following note
Joined by his wife:
1872 600. 90.
SAN ANTONIO, Tex, April l, 1856.
On or before the maturity of the first
and fifth series of stock of the Inter
national Building and Loan associa'
ton, we promise to pay to the order
of the International Building aud
Loan association, at it's principal
office in San Antonio, Texas, the sum
of twenty.six hundred dollars (S26OO)
with interest at the rate of six per
cent per annum from the date hereof
until paid; also the fur
ther sum of twenty six dol
lars (26.00) per month from
this date until maturity of the afore-
said stock as provided for in the by
laws of said association, which by
laws are made and taken to be a part
hereof"
To secure the payment of the above
note Abbott and wife executed and
delivered to William Holland a deed
OF trust, conveying to him the prop
erty described in the petition, which
contained the usual provisions for sale
in case of failure to pay principal, in
terest or monthly payments on stock.
The interest was to be laid monthly
and ST. on each share of stock to be
paid each month. Abbott paid the
monthly installments on his two
shares OF stock up to and including
November, 1890, and paid the interest
on the note for thu same time,
amounting to the sum of S7l5, when
he refused to pay any more. In June,
1891, Holland advertised the property
for sale and Abbott sued out an ipjunc'
ton to restrain the sale. Defend
ants answered, setting up the note
and deed of trust, and alleging
the failure and refusal of abbot to
pay interest and installments and
prayed foreclosure and order of sale.
They also alleged that the sum of
$685. 90 to be paid each month was in
serted in the note by mistake and
should have been $1,000. The court
found this to have been a mistake.
The district court gave Judgment Tor
the Association for $743 So with fore
closure and order of sale. The shares
of .S'stock pledged were by the court
Cancelled. The Judgment was af-
firmed by the court of civil appeals.
Plaintiff in error complains of the
ruling of the court iii holding that the
mistake committed by inserting $4,000
for $500 in note could be corrected,
because it was not shown to be a mu-
tual mistake. The note expressly
made the bylaws part of it, aud
these prescribe that a shareholder
should pay $l.00 per month on each
share of stock, and there being thir-
teen shares would make $13 90 per
month to be paid. This showed OF
itself that there was mistake in
inserting more than the by laws al
lowed and was properly corrected.
The contract furnished within it.
self the evidence of the mistake.
Abbott claims that a. the note is
usurious he is entitled under the law
to have all money paid as interest
credited on the principal and the
balance of the principal settled out Of
the value of his matured stock. He
also prays for recovery of his six
shares of stock in the possession of
the defendant.
The bylaws of defenGsnt association
required that each stakeholder should
for each mouth pay 81 upon each |
share of stock owned by him until
each share should be Of the value of
5000, when the stock should be ma
tured and surrendered to the associa-
ton. The stakeholder receiving the
sum of 5000 for each share, less any |
sum in which he might be indebted to
the association. If a shareholder Dor
roWed money from the association he
was required to transfer and deliver |
his shares of stock to it, to be held I'M
til they matured under the bylaws,
when the debt would become due and |
the stock cancelled, and the sum due
to the shareholder upon the shares,
applied to the payment of the debt,
II shareholder VINO borrowed de-
sired to pay off the debt and redeem
his stock before the time
that it matured he could |
do 80 by paying the debt and in ad-
dition to the interest already paid, the
one.eighth part OF the premium for
each year that he had the use of the
money. The premium bid for the
privilege of borrowing was Disguise
for unlawful interest and in fact was
sum to be paid for the use of money in
addition to the specified rate of inter
est, and if the rate charged as interest
and the premium amounted to more
than II per cent per annum the con-
.itact is luxurious. Cassidy VS.. Jackson,
. Texas, 2S7; Ell 2aso Building and
,1an Association VS.. Lane, 81 Texas,
869; Bexar Building and Loan Asso'
citation vs.. Robinson, 1872, 1853
The note was to fall due at the ma
turity of the stock. If there was no
,roft ~, Tho sb n rag tho poUneut Of q |