The Irish standard. [volume] (Minneapolis, Minn. ;) 1886-1920, 1895-07-20
THE CATHOLIC Bull DING AND LOAN
y y AsSoc IATION SHOULD AR
ID II BITRATE. ssssl fss

n
! city. The cases referred to were those
of Peter cDonough and Catherine
Hughes VS.. the Iiennepin County Catholic
building bird Loan association, and silll
each case an issue of the utmost impor-
tance tps the mebers was at stake. Since
the organization Of the ASSOCIATION ii 1874
and up to the time Of the commencement
Of the financial depression Of . few years
since the association enjoyed an tnparal-
leledS period OF prosperity. Hundreds 81
our citizens became Its members and pur-
chased shares Of stock. To those wishing
to borrow money for the purpose Of pur-
chasing d home or building a residence
the plan Of the association was looked
upon with favor, as it enabled them to
accomplish this result on the monthly
payment plan. AS a resultta great many
loans were made to members eager to
secure a piece Of Minneapolis real estate
which from year to year advanced rapidly
in value. \ To those making such loans
through many years since the formation
Of the association the investment proved
a profitable one. The rate Of interest
they were paying became a secondary con-
sideration to that of the increased value
of property in our midst. Employment at
good wages was to be had by all who de-
sired to earnsa home. The holders Of free
stock were naturally benefited greatly
by the sharp demand for the money Of the
association and many were able to secure
a profit exceeding 2Oper cent per annum
on their investment. But there came a
change. The association during Its years
OF prosperity and adopted an amendment
making nine years the basis Of maturity
OF stock. There can be no question that
this amendment has been misleading as
hundreds Of members, borrowers and free
holders alike shared in the belief that nine
years would be the limit of time necessary
for stock to mature, although the bylaws
of the society make no such provision. The
depreciation in value Of real estate that
fell into the hands Of the association from
defaulting borrowers during the past few
years resulting in the loss Of thousands
of dollars to the association brought this
point prominently to sthesurface and twas
soon discovered that the free holder could
not secure his 5000 per share at the end OF
nine years as in former years, nor could
the borrower be released from his obliga-
ton after paying for that time. The mem
bers, and especially the borrowers natrr-
ally began tosseek relief from their con-
tinued burdens and looked to the nine year
amendment which the association adopted
as means Of escape. It was discovered,
too, by many of the borrowers that they
were paying their s per cent interest on
the whole amount of their loan from first
to last, whereas the fact was that they
thought that by the payment Of their,
dues each year and each month from the
beginning they were steadily paying back
the principal. Legal advice was sought
with the result that test cases OF these Inn
portant points were made before the bar
Of the district court of Hennepin county.
The litigation has extended over a period
Of nearly three years. :Messrs. Gallagher
& Kinnane appeared for the association
in the Fitzgerald case and J. j. McHale In
the McDonough and Hughes case, and I.
T.. Byrnes and Louis FRESHMAN for the
plaintiffs. Two suits were brought
against the association, one by Peter
McDonongh and the other by Catherine
Hughes. The substance of their claim
was that when their dues paid in amounted
to the sum borrowed from the association
their debt was paid. In other words they
claim they should only be bound to pay
back the sum of money received with 8
per cent interest. The association on the
other ,hand claimed that the contract
bound the borrower to pay dues on his
stock and interest on the loan until the
stock matured; or II. the borrower paid
hack his loan prior to the maturity Of his
stock he should be charged with both loan
and premium and credited with the value
Of his stock and rebate 1T one-ninth Of the
premium for every year during the nine
years that he did not have the loan. and
upon paying theydi differences in cash ne was
released. Judge Jamison last December
decided ii SAVIOR 81 Med onough on the au-
thority of the Fitzgerald case, decided i lll
March, 1894, in which It is held that time u
earns the premium at the rate Of ne-nint }:
each full year. but that the borrower
should be- charged with interest on the
premium not thus earned. Judge Belden,
ia the Hughes case, decided In favor Of the "a
ASSOCIATION, and he has been sustained neg
and Judge Jamison reversed. The optnI-
ion was handed down by Judge Canty,
which is, owing to It's importalnc given 'dI
IN full elsewhere. 81 A #
q This is the end Of the controversy 50 Tar
az litigation is concerned. IT is now GER
tain that the borrowers must pay the pre-
mrsr,n ia addition to the loan and - apply
che Yal,ie of their stock Is reduction of
3t4eir debt This IS 4 hardship y : great
many who tough that payments for nine
years WouId release hem. But It IS evil
dent that the assoc citation has got to that
|stage III Its career sEthsr aside from the
Sc would have 50 prepare and a d
Wind us ana 90 .osl business Itseeslls
to 1t,s Ii the members aIe wise that All
th hui; sre Ii ming dificsnlties can djusted
on q
s - 1nY,t Ma fref, afr,k