The Magnolia gazette., 1899-05-20
PREMIUM LOANS USURfOUs
ASSOCIATE JUSTICE TERRAL ~ TIE
SUPREME COURT RENDERS TIE
OPINION.
That Under the Laws Of the State
q Mississippi a Fixed Pre-
MUM Is Usurious.

~ " iAE W tlf idIRt HhuiJtI ~
loans placed by foreign corpora
tons in Mississippi this opinion is
one oF the most important that
has been rendered during the
present session of the court. The
foreign companies have loans
placed in nearly every county in
the state and at rough estimate
il is said that the amount 81 their
investmentwill exceed 50 600, 900.
Following is the opinion Of JUS
tice Terral in full
is. Sokolosky vs. New South
Building and Loan Association:
The appellee company was or
ganized under the revised stat
utes OF 1870 of the state Of Louis
lana, in which there is no refer
ence to building associations.
The statute authorizes any six
persons to subscribe themselves
into a corporation, and with the
power to "make by-laws for the
proper management and regula-
ton Of the affairs Of the corpora
ton as may be necessary. In
pursuance Of such statutory au-
thority the subscribers, Jules a.
Blanc and nine others on the 10th
day Of May, 1890, formed them
selves into a corporation under
the name Of the New South
Building and Loan Association,
with power, among other things,
to hold, receive, lease, purchase,
improve, sell, convey, mortgage,
pledge property, real and per-
sonal, to borrow money, lend
money in security; and to make
and alter it's ny laws at pleasure.
Said subscribers constituted said
corporation to carry on busi-
ness. and TO establish branches
in any parish in Louisiana, or in
any county Of the United States !"
they provided that the series
stock fund Of said corporation
shall be used for the purchase
and sale of real estate, for the
building, renting and selling Of
homesteads and other real estate,
and for effecting loans upon
mortgage security within the
United States Of America. They
fixed the capital stock of said cor
ration at $50, 600, 900, of which
| 200 shares Of 500 per share
shall be guarantee stock to be
issued only for money, property
or services rendered.
The bylaws of the corpora
tion provided. among other things
that a series stockholder could
borrow money Mt the rate Of the
par value of 500 held by him
and should pay as n membership
fee 81 for each share of stock
taken, $40 for expense on receiv-
ing hls loan, and should pay
monthly stock 1ues of 20 cents
per month for each share of
stock held by MIN and g per cen
tum premiums and 9 per centum
interest on the amount received
as 4 loan, both payable monthly
For the trial of the case it wa
agreed among other things that
the company had borrowed the
sum Of St37 500 for which it gave
its bond, ard that Si00, 600 OF
said sum bore Interest at the rate
of { per centum per annum and
S37 500 bore interest at the rate
Of 6 per centum per annum.
Sokoloski joined the associa
tion and borrowed Of it $500, to
secure which sum he gave a
mortgage on his homestead; he
has paid the association 1920. 20,
and this hill is to cancel sale
mortgage and fora decree agains
the association for the sum o
money paid to the corporation
above what. he alleges. it ia en-,
titled To retain in satisfaction o
said mortgage The contract o
Sokolosky with the New Soutl
Building and Loan Association
provides for proniums-not fo
one gross premium in conse
quence Of open bidding for tn,
advaneement-but for fixe,
monthly premium. 6 per centuu
to be paid each successive mont
until the loan shall be liquidaie,
and which fixed premiums at IN
rate which the association 5 an
swer shows the loan is being Ii
quidated must IN the aggregat
at the maturity Of the stock ex
ceed 80 per centum OF the loan.
We find it hard to perceive ho,
the taking Of 6 per centum inter
est and 6 per centum premium
monthly through the whole peri