Phoenix Loan Ass'n v. Stringham

Me. Justice Harker

delivered the opinion of the court.

In its essential features this case is like one before the Supreme Court of the State at its June term, 1898—Rhodes et al. v. The Missouri Savings and Loan Company, 173 Ill. 621. In that case it was held that in order for a foreign building and loan association to enforce in our courts a contract'which would be usurious, unless within the exemption given by our statute to domestic building and loan associations, it must appear that the statute under which such foreign association was organized is like our own. It was further held that a corporation which, under the guise of a building and loan association, derives its loaning fund in whole or m part from paid-up stock, and whose business is such as to make it a mere loaning corporation, though possessing some of the features of a loan association, is not entitled to the protection of the statute exempting contracts of building associations from the usury law.

Appellant is just such an institution as the Missouri Savings and Loan Company. The scope of its business is one which is not authorized by our statute. It is a foreign money-lending concern, seeking business with the citizens of the State under the guise of a building and loan association, and thereby evade the statute to prevent the charging of usurious rates of interest. The Circuit Court, therefore, rightly held that it was not such an association as is contemplated by the laws of this State with reference to homestead loan associations; that the note and mortgage were usurious, and that appellant was entitled to recover no more than the sum actually borrowed with legal interest thereon after deducting the aggregate of monthly payments made.

The finding of the Circuit Court that the sum of $133.50 was due from the appellant on account of the $500 in stock (certificate No. 19,417) on which no money was borrowed, and its application in payment of the note and mortgage, is assigned for error.

We see no merit in the contention that the action of the court was erroneous because the estate of John M. String-ham is yet in process of settlement and the sum due on certificate No. 19,417 is personal property, and as such should be paid to the administrator and not applied in discharge of the mortgage debt. Had this suit been against John M. Stringham in his life, this set-off would certainly have been allowable against the mortgage debt.

Appellant is not harmed. What difference can it make to it whether the amount is applied in discharge of the mortgage debt or paid to the administrator. The administrator is a party to this suit and if he desired to make any claim to the $133.50, could have done so. The application* of the $133.50 to the amount due on the note and mortgage shows the difference between what John M. Stringham owed appellant-and what appellant owed Stringham—the real debt. Seeing no error in the record we affirm the decree. Decree affirmed.