The Irish standard., 1895-07-20
McDoNOUGH vs.. B. & /. ASSN.
The Complete Report Of the Supreme
s Courts Decision.

The Complete Report Of the Supreme
Courts Decision.
McDONOUGH VS.. B. & u. AssoC1A-
tion--The complete report Of the SUI
J. pren1e Courts Decision: ..>* VII. Il
Peter NcDonough, respondent, VS.. Hen
nepin County Catholic Building u Loan esl
Association, appellant. Syllabus:
The bylaws Of a mutual building and
loan association were ambiguous and o.
doubtful meaning, but the association
and its, emembers had always by uni nj
form and well understood course OF DEAL
ing, given practical construction to TOT these
bylaws.
il. Held as applied 70 contracts entered
into between the association and us
members during such course OF dealing
such construction Of the bylaws must
control. .. n,
\. Order. reversed. Hs a!
CAVITY, J.
STATE OF. NEUTRALITY-SUSPICIOUS.
+ Court, April Term, A. D. 1895, NO. sl1.
4 Peter McDonough VS.. Hennepin County
Catholic Building and Loan Association,
appellant. Opinion: Va
D. Defendant is a building and loan asso-
citation, of which plaintiff Is mem Der,
holding Is shares Of its stock. His stock
was issued in 1894 to other parties, VINO
transferred it to plaintiff in 1885. Each
share is Of the par value Of $500, and IS
paid for by paying. to the association
81. O5 per month from the time the series
is issued, until the shares natures, or BE-
comes through DISCRIMINATION OF dues,
interest and other profits OF the asso-
citation, Of the value. of $500. Inc by
laws of the association provides that US
funds shall be loaned to its members
at a premium of not less than $50, per
share. and shall be so loanedt to the MEM
bers who bid the highest amount OF pre-
MUM in excess Of $50 per share, ana
furnishes reasonable security. me
amount of premium SO bid was deducted
from the mar value of the share, and the
balance was the amount per share, 3actu-
ally loaned. 1t also appears from the
evidence that by the custom anu usage
OF the association, the borrower was re-
uuired to repay the amount loaned put
no interest on the premium bid. II: the
borrower kept up all the payments, the
loan was carried until it WAS paid BACK
or the stock matured and thereby tue
loan. This much Of the method OF do
ing business can hardly be said to pc
prescribed by the bylaws, which are so
crude and unintelligible that when con-
strued by themselves it is exceedingly
difficult to give some parts OF them rea-
sonable meaning.
In 1885 plaintiff procured from defen-
dant on IA shares Of his stock loan ior
which he bid $85 per- share amounting
to 81, 1870 on the IA shares, this deducted
from $4,000, the par value OF the -
shares. leaves $3.50, which was the
amount Of the loan.
In 1885 plaintiff procured a loan on his
other share for which he bid premium
Of s1OO, leaving $500, as the amount
of the loan. ~
This action was brought to reform the
bond and mortgage given for each loan,
so that they should not provide Tor the
,nayment of either the premium DID or
interest thereon, or the payment OF any
thing hit the amount actually loaned and
interest thereon at the rate of per cent
ner annum, and to declare both mort
cages paid and satisfied. Both mort
cages were on the same property. ~ me
cause was tried by the court without a
i,1ry. The bond and mortgage given Tor
The first loan recited that the loan was
made on the Is shares Of plaintiffs stock
and was for larger amount than was IN
fact loaned. Defendant stipulated that
this bond and mortgage should ne re-
formed so tas,to recite the true amount
loaned and the true amount OF pre-
MUM bid: ss4., d.H ri Al. /,
By the bond and mortgage given for
eacl, loan, plaintiff agreed to pay interest,"
at the rate Of 6 per cent per annum on
the premium bid as well as on the amount
loaned, It appeared by the evidence
thataplaintiff never paid any Interest on
the premium, and never was required oy
the defendant to do so. Defendant st1pu-
lated that there was a mistake IN draw
ing these instruments so as to re1ulre
nayment of interest on the premium
and that they. should be reformed 50 as
to provide for payment Of interest only
IN the sum actually loaned. not on the
premium bid. The first OF plaintins
loans had run more than nine years and.
the second had run nearly that length or
time. On the authority Of Fitzgerald vs..
this defendant Sc MINI 424,. plaintiff
CONTENDS that under the bylaws, time had
earned the premium and he can, be re-
a,iired to pay only the sum actually
loaned and IS per cent Interest thereon.
and that the mortgage should be re-
formed accordingly. Defendant con-
tends that this is not the proper inter
tarest thereon, and that the mortgage
should be reformed accordingly. De-
PENDANT contends that this is not the;
PROPER Interpretation Of che bylaws.
and that il the bylaws are ambiguous
and of doubtful meaning in, respect to
this matter, they are explained by the
evidence of the uniform custom and usage
of the association and its members, and
that such usage and custom should con-.