Court Opinion

ID: 7002415
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:44:26.580296+00
Date Added: 2024-06-11T16:09:57.758524
License: Public Domain

Mr. Presiding Justice Windes delivered the opinion of the court. Eumerous contentions are made in the able and exhaustive briefs of counsel of the respective parties, as to why the decree should be reversed and sustained, but we deem it unnecessary to refer in detail to them, inasmuch as in our opinion the recent case of Borrowers and Investors’ Building Association v. Eklund, 190 Ill. 257, rendered since the filing of the briefs, makes it unnecessary. In that case it is in substance held that such a contract as the one here under consideration, and set out in the statement, is usurious, for the reason that the loan was made without the money being offered at a public meeting • of the directors of the association to the highest bidder. The court, in the case referred to, among other things, say: “ The plan marked out by the statute, of requiring the association to offer its money for sale at a regular stated meeting of its directory for the highest rate of premium which its stockholders were willing to bid therefor, or the other alternative plan authorized by the provisions of said section 8, but not adopted by this association, of fixing a rate of premium by a general by-law applicable to all and uniform in its operation as to all stockholders, are the only two plans to be followed in order to exempt a loan, otherwise usurious, from the operation of the general interest laws of the State. * * * The privilege to contract for premiums accorded to these associations is not an unbridled license to exact any rate of premiums the present situation •or stress of the affairs of each individual borrower may induce him to consent or agree to pay. On the contrary, if they would avoid the imputation of usury and the forfeiture of all interest consequent thereupon, they must, whenever they have as much as $100 in the treasury, either publicly offer the same at a regular meeting of the board of directors, to be loaned to the stockholder who will pay the greater premium therefor, or they must fix by a bv-law a uniform rate of premium at which their stockholders may borrow their money in order as their applications are filed, and without distinction between stockholders.” The statute as to homestead loan associations (Hurd’s 1885), in force at the time this loan was made, unlike the statute here under consideration by the court, has no provision permitting a loan association to fix by by-law the rate of premium at which the stockholders may borrow their money, but its only provision in that regard is that the money “ shall be offered for loan in open meeting, and the stockholder who shall bid the highest premium for the preference or priority of loan shall be entitled to receive a loan of $100, less the premium bid, for each share of stock held by said stockholder.” Under the statute and the finding of the master, which was approved by the court, that the loan was made without the money being offered in open meeting to the highest bidder, the contract between the association and Jurgens is clearly usurious. It follows that the association forfeits all interest, and that when the payments made bv Jurgens upon the loan, as set out in the statements, are applied, the indebtedness to the association is fully paid. The decree is therefore reversed.