CORPORATIONS 859

Usury.

Where a mortgage provides for the payment of principal and six per cent, interest,
and an additional "premium" of seven dollars and fifty cents per month, the transaction
is usurious. Meaning of the word "premium" as used in this section. White v. Williams,
90 Md. 723 (mortgage made prior to the act of 1894, ch. 321, and hence not affected
thereby). And see Geiger v. Eighth German, etc., Assn., 58 Md. 570.

Act of 1894, ch. 321, only changes this section so far as the time and method of the
payment of the premium are concerned, and does not alter the rule that the premium
cannot be an indefinite or variable amount, or payable in an indefinite number of
small instalments. Transaction held usurious. The statute conferring the privilege
of charging a premium is to be strictly construed. Washington Bldg. Assn. v. Andrews,
95 Md. 699. And see Coltrane v. Baltimore, etc., Assn., 110 Fed. 293.

The money paid by a building association for the purchase or redemption of stock
is not a loan to the shareholder to be repaid by him with interest, and, therefore, no
question of usury can arise. Transaction held usurious. This section referred to in con-
struing sec. 151—see notes thereto. Commercial Assn. v. Mackenzie, 85 Md. 142. And
see Washington Bldg. Assn. v. Andrews, 95 Md. 700; Faust v. Twenty-third, etc., Bldg.
Assn., 84 Md. 190; Home, etc., Bldg. Assn. v. Thursby, 58 Md. 288; Border State Bldg.
Assn. D. McCarthy, 57 Md. 559; Baltimore, etc., Society v. Taylor, 41 Md. 417; Robert-
son v. American, etc., Assn., 10 Md. 408; Coltrane v. Baltimore, etc., Assn., 110 Fed. 293.
Cf. Williar v. Baltimore, etc., Loan Assn., 45 Md. 562; Citizens', etc., Co. v. Uhler, 48
Md. 458.

This section and sec. 164 have no application to a corporation chartered for "the pur-
chase and improvement of real estate, advancing money on mortgages," etc., nor to
a transaction which is nothing more nor less than a loan of money by an association
and a mortgage of the borrower's property for the repayment of the loan with usurious
interest. The fact that the borrower becomes a shareholder and the money advanced
to him is called a redemption of his shares, is immaterial. Williar v. Baltimore, etc.,
Loan Assn., 45 Md. 562.

This section cannot be evaded so that more than six per cent, interest may be
charged by combining the interest with the weekly instalment payments on the shares
of stock. Transaction held usurious. Peter's Bldg. Assn. v. Jaecksch, 51 Md. 204.

A mortgage to a building association is not illegal because interest is payable weekly
and fines are imposed for non-payment of dues. Stewart v. Workingmen's Bldg. Assn.,
106 Md. 682.

Generally.

This section referred to in deciding that a building association was liable on a note
discounted for the purpose of raising money to pay a borrower the amount advanced
to him. Davis v. West Saratoga, etc., Union, 32 Md. 294.

This section referred to in construing sec. 164—see notes thereto. Salisbury Assn. v.
Wicomico County, 86 Md. 619.

For a case involving sec. 35 of art. 26 of the Code of 1860, see Shannon v. Howard
Bldg. Assn., 36 Md. 394.

Cited but not construed in Baltimore Bldg. Assn. v. Powhatan Co., 87 Md. 64; In-
ternational Fraternal Alliance v. State, 86 Md. 554; Faust v. Twenty-third, etc., Bldg.
Assn., 84 Md. 190; Middle States Co. v. Hagerstown Mattress Co., 82 Md. 513.

As to loans upon chattels, and the rate of interest thereon, see sec. 151.

An. Code, 1924, sec. 165. 1912, sec. 138. 1904, sec. 126. 1888, sec. 99. 1868, ch. 471, sec. 88.

1880, ch. 351. 1894, ch. 321. 1904, ch. 240. 1916, ch. 312. 1929, ch. 226,

sec. 165 (p. 720). 1933, ch. 26. 1933 (Special Sess.), ch. 62.

1935, ch. 567.

164. The payment of the unpaid installments and the premiums on the
share or shares so purchased or redeemed, with interest on the money paid
therefor, as aforesaid, and all fines and penalties incurred in respect there-
of by any member, shall be secured to such corporation, by mortgage on
real or leasehold property, or by the hypothecation of stock of such corpo-
ration held by such member or by judgment of a court of law or by a jus-
tice of the peace or by a decree of a court of equity all as may be provided in
the articles of association or by-laws; but in no case of hypothecation of
stock no greater sum of money shall at any time be drawn out by any mem-
ber than shall have been already paid in by him on all his shares at the
time of said hypothecation, and all homestead or building associations or-
ganized under the laws of this State are hereby prohibited from investing
in any other manner than in cash, fixtures, or loans on hypothecated stock
of such association, judgments or decrees for payment of money received