The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1895-01-09
AN IMPORTANT DECISION.

The following decision has been fled by
Judge Townsend in :. case thA' excited con
! siderable ir;rtes; ~ this community. Th'
decision has an important bearing upon al
Bulldog and Loan Associations that are now
doing business in the State. and will probably
lead to litigation 10 the future, rs ali lawyer
do not construe the law as Judge Townseo(
| does
SoUrH CAROLINA, SUMTER COUNTY
In the Court Of Common Pleas.
The Sumter Building aud Loan Association
Plaintiff, VS. D. j. Winn-Defeudant.
Th is is an action for the foreclosure of
mortgage.
D. J. Vim was member of the plaintiff s
corporation. In December 1885, lie borrowed
money from the Association. He bid off
shares (l.600 dollars) at All per cent. pre-
MUM. From this transaction be actually
received but S940, but gave bis bond for
81, 500; this including the S940 actually re.
ceived and the premium $3.50, and mort.
gage to secure it, His shares were also
assigned to plaintiff to secure this loan.
In May 1898 the Association resolved to cease
business, directing non-borrowe,s to cease
paying their monthly dues, and directing bor-
rowers to continue to pay one dollar Per
mouth per share till December 1893.
The defendant had paid all dues promptly
up..to this time referred to, 3iay 1893, and re-
fused to pay any longer. And think be was
right. The fact that he was narrower did
not subject him to greater burdens than those
who we're not borrowers, except that he had
to pay greater amount each month by way
of interest than if be had been non-borrower
up to time plaiutiff ceased business.
The plaintiff brought this action TO fore
close the said mortgage; claiming that there
was a certain amount due, and that certain
installments would continue to fall due until
each share would be worth $500.
The defendant denies. generally pleads
usuary, asks for an accounting and sets up
counter claim
The contract is not usurious because the
interest which was paid was paid upon the
$3.50 as well as upon the S94o by the defend
ants own agreement; the premium it is true
is a mere myth, until in the course Of time it
may be created by the earnings Of the month
~ payments, but as he agreed to pay the in
terest on il, he can { gay it is usury 10 do so.
But conceding the right TO bring the &C.
SS0S due or the bond, and that other
!nstallments will become due monthly until
the shares are worth $500, now that tho
association hes ceased 10 lead money, ,be
shares will never be worth 5000; nor can the
plaintiff claim any part OF the premium
All that the plaintiff can claim is S94O less
the value of the stock at the time the plain
Tiff ceased to do business, to-wit, May, 1893.
Suppose that in one hour after the defendant
made his bond and obtained the S94O,
the plaintiff had resolved (as it did in
May, 1889 to, cease business Immediately.
what would the defendant have owed
the plaintiff? Why evidently only the S940,
which he had Just obtained less the book
value of his stock without any premium or
monthly payments, or penalties And so
when the plaintiff ceased to do business in
May, 1895, the defendant owed S940 less the
book value of each share, and nothing more.
But according to my view Of the case, the
plaintiff had no cause of action. By its re-
solution of May 1898 it violated its contract
with the defendant. By the said contract
the defendant had right to 60 on paying
a certain amocn. each month till one of two
things happened viz: till each share
would be worth $500, or until the ex-
plration of tea years from the creation of the
plaintiff corporation. 1t had 20 right to stop
when the shares were worth Sl4o or Sl2S. 1t
made no such contract and hence has no
right of action
1t is therefore ordered, adjudged and de-
creed that the complaint be dismissed.
D. A TOWNSEND,
Presiding Judge