Court Opinion

ID: 6898856
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:52:51.088453+00
Date Added: 2024-06-11T16:06:06.098118
License: Public Domain

Mr. Justice Bean,
after stating the facts, delivered the opinion of the court.
That the contract between Joost and defendant was usurious under the laws of this state is conceded: Washington Invest. Assoc. v. Stanley, 38 Or. 319 (63 Pac. 489, 84 Am. St. Rep. 793); Pacific B. Co. v. Hill, 40 Or. 280 (67 Pac. 103). The position of the defendant is,- however, that the contract should be construed according to the laws of Minnesota, where it is valid, and not according to the laws of this state. There is some diversity of opinion whether a contract of a foreign building and loan association, such as the one now under consideration, that is not usurious under the laws of the state where the corporation is organized and domiciled, and where the obligation is made payable, can be attacked for usury in the courts of the state- of the borrower’s residence, where the contract was actually made, and the mortgaged premises are situated; but, by the great weight of authority, the validity of such a contract is solvable by the law of the place where it was made, and not where payable. The law governing these associations, and by which their, contracts are to be construed, is so thoroughly considered by Mr. Justice Wolverton, in the Stanley and Hill cases, that nothing more need be said upon the subject, although -it may be proper to note that the same conclusion has recently -been reached by the Supreme Court of Mississippi, in an exhaustive and masterly opinion by Mr. Chief Justice Whitfield: National Mut. B. & L. Assoc. v. Brahan (Miss.), 31 South. 840. The case now under consideration cannot be distinguished on principle from the Hill Case, the contracts in both being made before the passage of the act of 1895 (Laws, 1895, p. 103) regulating the business of building and loan associations. The fact that the plaintiff in the Hill Case had made loans to other citizens of Oregon, had a local advisory board composed of citizens of the state, and exacted from borrowers a bid of fifty per cent, of their stock, to be assigned to the company, does not differentiate it from the present case. Such circumstances only went to show, and were alluded to by the court as evidence, that the com*515pany was in reality doing business in Oregon, and that the agreement between it and Hill was not an isolated instance of a nonresident making a contract with a citizen of this state, to be performed elsewhere. So, too, here, yrfiile the- defendant did not have a local advisory board, and it does not appear that it had in fact made loans to other persons, it is averred that it had a resident agent here, with authority “to •take applications for loans, and forward them to the home office,” and, although it was stipulated that all payments on stock, premiums, and interest were due and payable at the home office, it did, “for the convenience of its members,” send, ‘ ‘ for collection, to the local bank or treasurer, the monthly installment receipts. ’ ’ In short, it was doing, or offering to do, a general loan and savings business in the state, of like character with that of the plaintiff in the Sill Case. Bedford v. Eastern B. & L. Assoc. 181 U. S. 227 (21 Sup. Ct. 597) was a suit in the United States court to foreclose a mortgage on land in Tennessee in favor of a foreign building and loan association, and the Supreme Court of the United States very naturally followed the decisions of the Tennessee courts, holding that such a contract was solvable by the laws of the state where the company was domiciled and the contract made payable.
"We are of the opinion, therefore, that the decree of the court below must be affirmed, and it is so ordered. Affirmed.