Holmes v. Smythe

Citations

• 100 Ill. 413
• 1881 Ill. LEXIS 113

Syllabus

<p>1. Constitutional law—special legislation—of the act concerning loan associations. The act of April 4, 1872, entitled “An act to enable associations of persons to become a body corporate to raise funds to be loaned only among its members,” is a general law, applicable to all the citizens of the State who choose to bring themselves within the relations and circumstances provided for by it, and is not within the prohibition of the constitution (section 22 of article 4), which declares that the General Assembly shall not pass local or special laws “regulating the rate of interest on money,” or “granting to any corporation, association or individual any special or exclusive privilege, immunity or franchise whatever. ”</p> <p>2. Usuby—of contracts with an association organized under the act of April 4, 1872, “to enable associations of persons to become a body corporate to raise funds to be loaned only among its members.” Where a person who is a member of such association obtains a loan of money therefrom, under the system of bidding the highest premium for the loan, as provided for in the act, coupled with other conditions authorized and prescribed therein, the transaction will not be regarded as usurious, although it may result that the borrower will be required, under the provisions of the contract, to pay a greater price for the use of the money advanced to him than would be allowable under the general law regulating the rate of interest. The contract being of such character that it is only upon the failure on the part of the borrower to perform its conditions that such result would follow, the obligation to pay an amount in excess of the legal rate of interest might be regarded as in the nature of liquidated damages, and not in any sense a regulation of interest upon money. This would be the proper view even treating the transaction as a loan.</p> <p>3. But a transaction of such character, being in its features and conditions in conformity with the provisions of t