1893 - State Library Information Center

CO-OPERATIVE BUILDING AND LOAN ASSOCIATIONS. 443constituted a part of the debt secured by the mortgage. As inthis case the constitution is made a part of the contract, the bondmuBt be read aa though it contained an express provision thatfines imposed for the non-payment of dueB should be considereda part of the mortgagor's debt.3. The case cited decides that fines incurred subsequently tothe commencement of the suit to foreclose are recoverable. Thatdecision is, in my judgment, clearly right, and it will be followedin this case. .4. I am unable to see how that provision of the constitutionwhich confers power to impose a fine for non-payment of interestcan be enforced in this case. This provision first declares that ashareholder, for neglecting to pay his weekly dues as they becomepayable, shall for each such neglect pay a fine of five cents oneach share of stock held by him, and then adds, " and a like sumon. interest due on each share borrowed on." The importantwords are " on interest due on each share." Under the contractno interest could become due on each, share or on the moneyloaned on each share. The obligors made no contract to pay intereston several distinct loans, or to pay interest on the specificsum loaned on each share of stock they held. On the contrary,their obligation, as expressed on their bond, is to pay interestevery three months, first on the whole sum of $8,000, and thensubsequently on such part thereof as shall Qot have been paid bythe payment of the dues on their stock. A fine can only be imposedfor a default in duty or obligation. As I understand theterms of the bond in this case, no default in the payment of interestof the kind contemplated by the constitution can occurunder this bond. The fines for non-payment of interest soughtto be recovered in this case must be disallowed, for the reasonthat under a contract like that which the obligors have made nopower to impose fines for non-payment of interest is conferredby the constitution.5. The obligors in this case bid ofi a loan of $8,000 at a premiumof $1,000. The complainant subsequently advanced$7,000 and took a mortgage for $8,000. Transacting the businessin this way, it is,claimed, made the mortgage usurious tothe extent of $1,000, or at least that no interest is recoverable on