Court Opinion

ID: 6973242
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:06:23.703326+00
Date Added: 2024-06-11T16:08:52.836722
License: Public Domain

Per Curiam: It is contended that under the conditions of the bond the interest paid at the close of the first month would be at the rate of seven per cent per annum,’ But there being then $50 paid on the principal, the payment of $58.33 at the close of the second month would be at a rate higher than seven per cent upon the principal remaining unpaid, and the rate would continually increase until the principal was finally paid in full. Viewed from this standpoint, we regard it as settled law that such a transaction is not protected from the taint of usury by the statute relating to building and loan associations unless the money is let at a competitive bidding such as the law requires or there is a by-law fixing a level premium. Section 8 of the act relating to building and loan associations provides, among other things: “The board of directors shall hold such stated meetings, not less frequently than once a month, as may be provided by the by-laws, at which the money in the treasury, if $100, or more, shall be offered for loan in open meeting; and the stockholders who shall bid the highest premium, for the preference or priority of loan, shall be entitled to receive a loan of $100 for each share of stock held by said stockholders; the said premium bid may be deducted from the loan in one amount, or may be paid in such proportionate amounts or installments, and at such times during the existence of the shares of stock borrowed upon, as may be designated by the by-laws of the respective associations: Provided, that any such association may, by its by-laws, dispense with the offering of its money for bids in open meeting, and in lieu thereof loan its money at a rate of interest and premium fixed by its by-laws.” (Hurd’s Stat. 1899, p. 453.) Appellee had no by-law dispensing with open bidding and fixing a level rate of interest and premium. Was the condition with reference to open bidding complied with? Let us examine the records of the transaction as shown in the minutes of the association. The minutes show that a regular meeting of the board of directors was held, more than a quorum being present; that after other business had been transacted “money was offered for sale';” that Ethel C. Meers bid a premium of ten per cent for a loan of $500 on certain stock and real estate security; that Thomas J. Currey bid a premium of twenty per cent for a loan of $1500 on certain stock and real estate security; that Thomas Craven applied for a loan of $2200, C. A. Wightman applied for a loan of $1500 and Henry G. Savage applied for a loan of $10,000, each of the three last offering shares of stock and real estate security but bidding no premium; that these five applications were referred to committees; that three other parties applied for loans on stock and their notes; that the committee reported favorably on the applications of Messrs. Wightman and Craven, and their loans were authorized subject to the approval of the attorney as to title; that the applications of Currey and Savage were approved subject to the unanimous approval of the committee on securities and the approval of the attorney as to title, and that the applications for loans on shares were approved and the loans authorized. The cases of Borrowers’ Building Ass. v. Eklund, 190 Ill. 257, and Jamieson v. Jurgens, 195 id. 86, are not in point in this case. In those cases the facts were materially different from the facts in this case. In those cases the borrowers did not bid nor was the business transacted at a regular meeting of the board of directors. In Home Building and Loan Ass. v. McKay, 217 Ill. 551, the borrower was personally present and bid, but there was no competing bid. In that case the court held that the statute had been sufficiently complied with. In the case now under consideration there were several bidders, but the association having plenty of money all were accommodated. Savage was not personally present but submitted a written bid. His application said, in part: “I hereby bid a premium of...... per cent for a loan of $10,000.” This business was transacted at an open meeting. Savage took the chance of some other person offering more for the money and thus defeating his application in his absence. Is a single bid submitted in writing, in the absence of the bidder, a compliance with the statute in question? In 6 Cyc. 149, it is said: “A letting of loans may be made as well by written as by oral bids.” In support of this text numerous authorities are cited. Among them are Farmers’ Savings Ass. v. Kent, 131 Ala. 246; Ruppel v. Missouri Guarantee Ass. 158 Mo. 613; State v. Stockton, 85 Mo. App. 477; Miller v. Missouri Guarantee Savings Ass. 83 id. 699; Eddinger v. Same, 83 id. 615. We do not think the law here under consideration was intended to mean that competitive bidders must be Actually present in order to make a valid bid. The law has been complied with in this case. We find no reversible error, and therefore the judgment of the Appellate Court will be affirmed. Judgment affirmed. Farmer and Vickers, JJ., took no part in the decision of this case.