Court Opinion

ID: 6231497
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:23:02.850172+00
Date Added: 2024-06-11T08:57:53.117020
License: Public Domain

The opinion of the court was delivered,
by Lowrie, C. J.
Our decision in the case of Reiser v. The William Tell Savings Association, just pronounced, requires us to affirm this decree. When this contract was made, the law of it was, that “ when a rate of interest for the loan or use of money, exceeding that established by law, shall have been reserved or contracted for, the borrower or debtor shall not be required to pay to the creditor the excess over the legal rate.” Such is the Act of 28th May 1858, and such has been our law for more than a century. Such is yet the law for all the people of the Commonwealth, except for such as may choose to unite to the number of ten or more into an association called a saving fund, loan, land, or building, and then the Act of 12th April 1859 says they may charge and recover as high interest as they can get, according to the necessity and the poverty of the borrower. Part of that act is expository, and professes to legalize the interest on this contract, which was made previously, by putting a new and impossible interpretation on former Acts of Assembly, and we have decided that we are forbidden by the Constitution to accept the interpretation.
In this case, the discount charged in advance was almost twenty-three per cent., being equal to nearly thirty per cent, interest. The court below was right in refusing to allow the excess over six per cent.
Our paper-book does not present the case very fully; but we do not understand the case as a loan to a stockholder. If the borrower became a stockholder at all, it was only as a part of the form of borrowing at an illegal rate of interest. It is very easy to see that this may be done; and thus membership becomes the cloak or sham under which excessive interest may be contracted for. Certainly this is not the ease of an advance to a member of his stock, with deduction of a premium, on getting good security for the payment of his monthly dues, but a loan for five months, renewed for six months.
Decree affirmed at the costs of the appellant.