Geiger v. Eighth German Building Ass'n

IitviJTG, J., delivered the opinion of the Court. . The appellee is a Building Association, duly incorporated under the laws of this State. The appellant, having two shares of the stock of the Association of the value of two hundred dollars each, executed a mortgage to the appellee to secure the payment of four hundred dollars advanced him, on his two shares, which were thereby declared redeemed and transferred to the Association. The covenant of the mortgage was “to pay the mortgagee the weekly sum of one dollar as weekly dues, and the further sum of sixty cents as weekly premiums, on every Monday evening until the dissolution of the said body corporate shall have taken place according to the charter, and the constitution and by-laws thereof which charter, constitution and by-laws, are made part of this mortgage; also, to pay all ground rent and taxes (State and city) for which the property hereby mortgaged may become liable, when payable.

And to pay all fines which may be imposed on him by the said mortgagee, for any failure to perform the requirements of the charter, constitution and by-laws aforesaid.” It also provided that all payments and covenants should continue in force until the holder of every share of the stock of the Association shall have received therefor two hundred dollars, when the corporation, by its charter, would be dissolved. The mortgagor consented in the mortgage to a decree for sale in the event of default, and the appointment of Luther M. Eeynolds, as trustee, to make the sale, in such case, in accordance with the provisions of sections 182 to 199, inclusive, of Article 4-, of the Code of Public Local Laws. The appellant having failed for two consecutive weeks to pay his weekly dues and premiums, the appellee filed ⁵⁷² a petition in the Circuit Court for Baltimore county, alleging the default, tendering a hond from the trustee for the Court's approval, and praying the Court to take jurisdiction of the matter. The Court approved the bond, and on the same day the appellant filed his petition praying for an injunction upon the ground that the amount claimed by the appellee, in its petition, to be due, was not due, and submitting a statement of what he claimed was due and had been tendered the appellee. ' This petition also charges the mortgage to be “illegal, usurious, ultra vires and void, excejat as security for the payment of the money, arid incapable of being enforced either in law or equity for any greater amount of money.” Injunction was granted, but subsequently was, by agreement, dissolved by a pro forma order, and this appeal was taken.

The amount in controversy is small; but the question presented is important to the Association and its members. The mortgage cannot be regarded as ultra vires, as contended for by the apjDellant’s solicitor. Nor can it be regarded solely as for a simple loan of money, between borrower and lender. The Peter’s Building Association No. 5 of Balto. vs. Jaecksch, 51 Md., 201 .

To the extent, however, that the appellant is called on by the appellee, to pay as weekly premium a sum larger than six per centum per annum upon tbe four hundred dollars advanced, the claim is usurious, and consequently, not recoverable. Article 7, of the constitution of the corporation, provides, that whenever there shall be two hundred dollars in the treasury, a share shall be loaned on or redeemed, and that if there is no application for it, some member may be forced to take it. In this respect, it is claimed, this Association differs from all others heretofore considered by this Court, and that the