McLaughlin v. Citizens Building, Loan & Savings Ass'n

On petition for a rehearing.

Howk, C. J.

An earnest and elaborate petition for a rehearing of this cause has been presented by the appellants’ counsel. We will consider and decide the several points discussed by counsel in the same order in which he has presented them.

We assume, for the purposes of this case, that the appellee is a body politic and corporate, duly organized and *273existing under and in accordance with the laws of this State, fully authorized by law to sue and be sued, and to contract and be contracted with, and clothed as with a garment with certain powers, rights, privileges and franchises. Whether we are right or wrong in this assumption, is practically of no consequence to the appellants in this case, for their mouths are closed; for they are estopped by their contract in suit from denying the existence of the appellee as a corporation, by and in its corporate name. Jones v. The Cincinnati Type Foundry Company, 14 Ind. 89; O’Donald v. The Evansville, etc., Railroad Co., 14 Ind. 259; Stein v. Indianapolis, etc., Association, 18 Ind. 237; The Adams Express Co. v. Hill, 43 Ind. 157; The Indianapolis Sun Co. v. Morrell, 53 Ind. 527.

It is very clear, therefore, we think, that the appellants cannot be heard to deny or even question the corporate existence of the appellee.

It is suggested by the appellants’ attorney, that the provisions of the act of March 5th, 1857, under which act the appellee was incorporated, in relation to the loan of its money by any such corporation, are in violation of section 22 of article 4 of the constitution of this State, which prohibits the enactment of local or special laws on the sübject, among others, of “ interest on money.” The words “ interest on money,” or the equivalent of those words, are not to be found in the act in question.

In section 9 of said act it was provided, that each member of the company should have an equal opportunity to take any loan offered by the company, “ and the member who shall take the same upon the terms most favorable to the company, shall have the preference.” 1 G. & H. 275.

In its practical operations, such a corporation, whenever it had a sum of money to be loaned, offered the loan to the best bidder therefor among its own members. The question propounded to its corporators, or the members of the *274association, was practically this : “ ITow much will yo.u giv.e for the privilege of taking this loan ? ” The members of the association were under no compulsion, moral, legal or physical, in regard to any such loan ; they could compete or not for the privilege of taking the loan, at their own free-will and pleasure.

In the case at bar it appears from the record, that the appellee, at or before the date of the note in suit, offered to its-members a loan of five hundred dollars, and the appellant McLaughlin bid for the privilege of taking this loan, say, fifty per centum of the amount thereof, and his offer was accepted. He did not pay his bid, but in lieu thereof he gave his note for the full sum of five hundred dollars; and the appellee, having retained the amount of the bid' out of the loan offered, paid the appellant McLaughlin the residue thereof, say, the sum of two hundred and fifty dollars.

This was the transaction out of which grew the note in suit, and it was fully authorized by the provisions of the act aforesaid, under which the appellee was incorporated.

It is earnestly insisted by the appellants’ council, that the bonus, premium or percentage bid by the appellant McLaughlin for the privilege of taking the loan offered by the appellee, and included in the note in suit, is actually, in fact and in law, interest on the sum of money paid to and received by said McLaughlin, and can not be considered otherwise; and that the act which authorized such unusual interest on the loan of money to be exacted only by such corporations as the appellee, and not by all persons, individual and corporate, was a special law on the subject of “ interest on money,” within the purview and meaning of the constitutional prohibition against such an enactment, and was therefore to that extent absolutely void. Ve can not regard this matter in the light in which the appellant’s counsel has presented it. The act in question *275is neither local nor special in its provisions, within the meaning of those terms as used in our State constitution; hut it is a general law, operating uniformly and alike throughout the State, and giving to all persons who may conform to its requirements the same rights, privileges and franchises. Groesch v. The State, 42 Ind. 547; Hanlon v. The Board, etc., of Floyd Co., 53 Ind. 123; and The State, ex rel. Hargrave, v. Reitz, ante, p. 159.

In our opinion the bonus, premium or percentage which 'the appellant McLaughlin bid for the loan offered by the , appellee, and which is included 'in the note in suit, is not, .strictly speaking, “interest on money.” The statute contemplates that the “ preference,” the choice of the loan, shall be a subject of sale and a subject of gain to the corporation, and that this “ preference ” shall be sold to the member of the corporation who will take the same “ upon the terms most favorable to the company,” or, in other words, for “ the highest and best price.” It was for this ' “ preference,” the sale of which by the appellee was authorized by the statute, that the appellant McLaughlin bid fifty per centum of the amount of the offered loan. This percentage, bonus or premium, as it is commonly called, was merely the contract price agreed upon between the parties for the “ preference ” which the appellee was expressly authorized to sell, and the appellant McLaughlin, as a member of the company, was authorized to buy, by the terms of the act before cited, and was not, we think, “ interest on money.”

The appellant McLaughlin was a corporator or member of the company, known by the corporate name of the appellee. He knew, or is conclusively presumed to have known, the provisions of the act under which the appellee was incorporated. In that act, as we stated in our original opinion, the Legislature reserved the right of altering, changing or repealing said act, as might be deemed *276advisable. Before any steps had been taken in this action,, in the court below, the Legislature repealed said act of March 5th, 1857, by an act approved March 11th, 1875,. but expressly provided therein, that all corporations existing under the former act might thereafter proceed according to the provisions of the latter act. In section 8 of the-later act, it was expressly provided, that the “ premiums, fines, or interest on premiums,” which might accrue to» such corporations, should not be deemed usurious. We think that the provisions of this section did not change-the law as it had previously existed, but merely declared in plain language what the law was on the subject of the section. But, if this section did make any change in the-law, the change would merely affect'the remedy, and it was competent for the Legislature to make such a change.. This point has been repeatedly decided by this court in. cases relating to the subject, now under consideration, of interest on the loan of money. Wood v. Kennedy, 19 Ind. 68; Shockley v. Shockley, 20 Ind. 108; Sparks v. Clapper, 30 Ind. 204; Pattison v. Jenkins, 33 Ind. 87; Highfill v. McMickle, 39 Ind.270 ; and Bowen v. Phillips, 55 Ind. 226.

Original opinion filed at May term, 1878.

We are satisfied, that the decision of this cause, as announced in our original opinion, was in strict accordance-with the law of the case; and therefore the appellants” petition for a rehearing is overruled.