The morning news. [volume] (Savannah, Ga.) 1887-1900, 1895-03-31
THE PLAN is NOT USURI0US.
THE GEORGIA STATE n. AND L. A.
WINS AT EVERY POINT.

the Right 10 Issue 10000 shares of
stock and Could Lend Money to All
Stockholders without DeviatinE
From the building and Loan Laws.
II Is Mutual Institution and APP
pears 10 Have Been Run only
such.
Shortly after Hon. Pope Barrow had
/ charged the jury in the suit Of the Geor-
4 gia State Building and Loan Association
/ against Ella Brown. foreclosure on a deed
to secure debt. yesterday m0fning. the
jury brought in a verdict for the fun
amount, Sl.56s5s, with attorneys fees of
+ s14s.s6. In favor Of the plaintiff.
The suit has been in many respects an
/ interesting one, especially so on account
Of the defense made. It's trial has taken
up the entire week in the city court, but
/ has resulted in a vindication of the plan
On which the association works.
Judge Barrow in his charge gave
/ clear and distinct idea of what is in
volved in the case. He instructed the jury
4 first 10 consider whether this association
was a loan and building associa-
/ ton pure and simple. or whether
II was an organization with other aims
.
plan employed as cloak to cover usury.
He spoke of the strictly mutual feature
OF a building and loan association pure
and simple and said it did not contem-
plate lending to others than its members,
or doing a general banking or money
lending business. Not the earning of in
terest, but the acquisition of homes is
the primary object of those who become
members. He spoke of the manner in
which such associations are favored by
law, and said they were permitted to re-
quire from their members payments on
loans which would be obnoxious to the
laws against usury were it not for the
mutually that exists between the men,
bers. member being both a borrower
and lender. his contribution goes into
the common fund IN which he participates.
For this reason the laws against usury
do not apply to the payment of loans by
the members to such an association.
Under this associations charter II has
the power ito lend TO its members and to
other persons" This, Judge Barrow said,
was a feature foreign to the legal con-
cepton of building and loan associations
pure and simple, and something else be-
sides such an association seemed to have
been contemplated by the charter But
the plaintiffs contend that although this
power IS given in the charter it has never
been exercised, and no loans have been
made except to members, which was de-
MED by the defendant. The association
may have under its charter $4,000 shares
of capital stock. Judge Barrow said in
conclusion:
1T is true that the standing of the
stockholders and the character of the
stock in every class are not identical in
all respects, but it is not essential that
they should be in order to make the
holder a stakeholder in the company.
Ordinarily stockholder in an incorpor-
ated company is a member. I charge
you, therefore, that within the maximum
limit Of $4,000 shares this company had
the right TO issue stock of the kinds in
question, and that every such stockhold-
err is a member of this association. 1t fol-
lows that a loan to such stockholder
would be loan to a member of the COM
pany"
1t will be seen that the facts as brought
out by the evidence showed, and the court
held, that the plan of the association was
equitable mutual, and in no sense usur-
ious. The testimony and figures also
proved the astounding results obtained
by compromising interest monthly and that
the elements of risk in its methods of bus
mess We're reduced to a minimum, the
business being under state supervision
and regulated by its laws.
The value of such institutions has been
recognized by the United States govern
ment to such an extent that in the re-
Gently enacted income tax law they have
been singled out and relieved from it,
Under the state law these associations
keep on deposit with the state treasurer
rs per cent. of all their securities, and at
presnt the Georgia state treas
urer has in his hands about
100000 face value of them. This
will have tendency to settle the usury
question in building and loan associations
and any contract made by member with
a loan association is mutual it must be
lived up to and is not usurious
e Co
the plaintiff company and Messrs. G. II.
& ]. +. Camn for the defendant,
Mr.. j. r. Saussy, Jr, said yesterday
that ne desired to correct the impression
that seems to have been given out by the
recent publication concerning the dis
qualification of Judge Macdonald in the
case because of Judge AIacDonell's kim
ship to himself, one of the stockholders of
the association.
The impression seems to have COTTON
hold that 1t was the relationship 10 the
| attorneys as such, that caused the dis
| qualification. This Is erroneous and does
both Mr.. Saussy and the Judge am in
| Justice The court felt that as Mr. Saussy
was a stakeholder in the company and was
his double cousin first and third that
the relationship affected only so far as the
plaintiff was concerned 1t must not be
understood for a~Unoment that the mere
| fact of kfnship would disquahfy Judge
| MacDoneI from presiding in any case
in which NfeSsrs. Saussy may appear as
counsel i'm the city court, but the ruling
must be confined only to such case in
which relation of the Judge within the pre-
soribed degree of consanguinity, are inter
ested either directly or as stockholders
1t is possible for the judge to reconsider
his ruling in the above case, and probably
| he.wih do so when he has opportunity to
Esexamine fully into the iaw. The question
has been decided favorably to the auali-
fication in some of the states, but as yet
is a new one i'm Georgia.
THE POLICE AND FIRE UNIFORMS.
The Contract for Both Awarded to