Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1900-07-06
HOLDS ! Law I Il '|D|
Judge Bishop Renders Important
Opinion Touching the Building
and Loan Law.
Says That the Law is Unoonstitu.
tional in Respect to Existing
Contracts
Legislature Scored For Alleged Bad
Faith Text Of the Bishop
Opinion.

SdttA-4e VI wy olsnVp
Opinion.
Special to Times Republican.
Des Molnes, July 6.--Tfe decision OF
Judge Bishop relative to the building
and loan law is Of great interest to the
building and loan people. Judge Bishop
believes that the law can not in any I
way affect existing contracts in build |
ing and loan business and that the
companies can recover to the face Of |
the contracts. The case was that of |
the Iowa Central Building and Loan
Association against Wilson, all Des
MONIES parties. It directly raised the
question f}constitutionality.
A few days before Judge Bishop adj
journed his court for the summer vaca-
ton he heard arguments on a demurrer
in the case Which was brought by
Spurrier & Maxwell. attorneys for the
association, since the new law took ef-
feet, to foreclose mortgage of $1,000,
given by Wilson to the association In
May, 1897. Under the contract which
was made in accordance with the rules
OF the association and the laws of the
state then in force and relating to dues,
sue OF stock, the association would be
entitled to a Judgment for $1,047.96, and
this was asked for in Its petition
The defendant answered, admitting
1.-THE allegations Of the petition, but
a. of,r$
serning building and loan associations
had been modified by chapter 50, acts
of the Twenty-eighth general assem-
bly, which was now applicable To the
contract sued on, and by the express
terms and provisions OF which. relating
| to rate OF interest, dues. premium and
withdrawal value of stock. the assoc
fciation was prohibited from collecting
more than ss0s.53 instead of the sl.047.96
demanded In the petition. To this am
swer counsel for the association inter
posed a demurrer. based on the grounds
that in so far as the new law might be
held to apply to antecedent contracts.
| 1t was Unconstitutional and void In that
Lit impaired the obligation of contracts,
5Igdeprived the plaintiff OF Its property
/ without due process of law. Invested
4 vested rights and denied tot the plaintiff
the equal protection Of the laws.
The Judge In his opinion says: There
is nothing in the act itself which in
4 terms makes 1t applicable to ante
lscedent contracts, or In other words,
A jgives it a retroactive effect. There are.
II however, provisions in the act which
4 from their terms would seem to indi-
s|acate legislative intent to apply the
a Iaw to former contracts After review
ling at some length the various provis-
4 ions OF the act, the Judge reaches the
I conclusion that while the act ia ken $
4 whole Is not made retroactive by Its
terms, yet in respect to some of Its
. more important provisions. particular
sllyathose contained in section six there
OF, 1t appears to me that the same we're
INTENDED BY the legislature TO be app
$Ipiied to antecedent contracts Con-
tinuing he said:
There can be no question but that II
the plaintiff was natural person in-
stead of a corporation the act in ques-
u ton, in so far as it might be held to
d apply to the contract here sued upon
would be unconstitutional, in that its
a effect. IL enforced, would be to disturb
vested rights and TO impair the opllga-
/ ton Of contracts already i'll force. II
I l}has been said In argument, however
: by counsel for defendants that mas
much as the plaintiff is a building and
lIloan association organized under the
FLAWS of the state~of Iowa and having
& received its charter and authority &c
( do business from the state, that the en-
: Ilactmert Of the new statute inquestior
: is merely an exercise of the reserved
Z power of the legislature under section
-1l6l9
"Section 1919 Of the code referred t.
3providcs In substance that articles o.
incorporation, bylaws, etc, of corpora.
lions hereafter organized under this
: provisions of this code shall at al
: times be subject to legislative contro
!. and may be at any time altered
: abridged or set aside by law, and every
!, franchise obtained thru or enjoyed by
. | such corporation may be regulated
!, Withheld Or be subject to conditions
). Imposed upon the enjoyment thereof
!, whenever the general assembly shall
: deem necessary for the public good.
! There can be no question, take it
hut that the legislature has the right L
redistrict and control a corporation ant
its franchises and immunities. which
were directly derived from the state. ST
: far. 1t seems to me, there can be nj
q |questinn. The controversy beginsat the
I next step. and that Is, whether the
i Legislature has the right to Interfere
: with the contract rights or interests Of
! the corporation acquired by II while II
2 the lawful pursuit OF its business. Il
. will be observed that our statute only
9 reserved to the legislature the power
TO amend or alter articles of incorpora
ton In those particulars which consti.
tute the grant of the state to the cor
e poratlon. III he case OF Hill VS.. Glas
\ gov Railway Co., reported In Al Fed
). Reporter, 61O Mi. Justice jackson said
. "tAfter referring 10 several casss). Til,
: principle OF these and other decisions
; upon the subject of amending or repeal
. ing charters, under n reservation o.
t power go to do is that the legislator,
G may modify or change the privilege,
: and franchises which the state ha!
granted 10 the corporation and which
concern the Interests of the public. but
), dealing with what it has bestowed
: either by way Of withdrawal or altera
tion the state may not go further ant
/. SO legislate as to disturb, affect or i'm
!. pair rights either Of the corporation o