Commercial Building & Loan Ass'n v. Mackenzie

Citations

• 85 Md. 132
• 36 A. 754
• 1897 Md. LEXIS 30

Syllabus

<p>Building Associations — Usurious Loan by Foreign Building Association on Leasehold Property — Construction of Act 0/1894, Chap. 629 — Securities for Usurious Loan on Chattels Null and Void— Money Paid by Building Association for Redemption of Shares of Stock — Building Association Mortgages — Sale upon Default.</p> <p>The Act of 1894, chap. 629, provides that no corporation doing business in this State shall make any loan on the security of chattels or otherwise, except in its own proper name, &c., and shall not charge more than six per cent, interest, and that any contract in violation of the statute shall be null and void. It was provided that the Act should not apply to building associations incorporated under the laws of this State. Held, that since the obvious purpose of the Act was to prohibit the exaction of usury by lenders on the security of chattels and to protect borrowers on such security, the word mortgage not being used in the Act, the same is applicable only to loans upon the security of chattels, and does not apply to a loan by a foreign corporation on leasehold property so as to render a mortgage on the same, providing for the payment of interest at. a higher rate than six per cent., absolutely void, and not merely void as to the excess over the legal interest.</p> <p>In the construction of a statute the intention of the Legislature is to prevail, and is to be collected from the whole of the law and the circumstances that produced it.</p> <p>The money paid by a building association for the purchase or redemption of shares of stock is not a loan to the shareholder to be repaid by him with interest, and therefore the question of usury does not arise in the transaction. Although the principal sum advanced is not to be regarded as a loan or debt, yet the payments to be made from fime to time for dues, premiums, fines, penalties and interest on the money advanced for redemption of the shares may be secured by a mortgage and the sum so secured must be