Pattison v. Albany Building & Loan Ass'n , 63 Ga. 373 ( 1879 )

Bleckley, Justice.

1. There was a full settlement, and the debtor gave his promissory notes, and thus closed up his account. He now seeks to avoid the settlement, and extricate himself from his express promise to payas evidenced by the notes, partly on the grou id of fraud. The fraud alleged is that the account as kept and stated by the creditor embraced interest or usury which, up to the time the notes were given 3 had not been promised in writing. No trick or device is alleged by which the debtor was thrown off his guard and prevented from having the account examined, or from making inquiry into the elements which composed it. That he might have informed himself by the use of even slight diligence in attending to his business is obvious. If he has been drawn into a written promise by the notes, as to interest which he was not otherwise bound to pay, his own gross negligence is the cause. A fraud is something that would probably mislead or deceive an attentive man ; or something calculated to relax or divert his attention. It is not a fraud to claim openly the fruits of a non-obligatory parol promise, and to ask for a writing which includes them. The account, so far as appears, was stated on the basis of the actual dealings between the parties, and no representation was made that it was stated otherwise. If the debtor assumed that it was otherwise stated, it was a gratuitous assumption, and the misleading was in the action of his own mind, and not in the conduct of the creditor. The facts pleaded make a case of gross negligence on the part of the former, but none of fraud on the part of the latter.

2. Of course the usury, if any, could be reached by a proper plea of usury; but regarding the defense pleaded as one of usury simply, apart from fraud, there is a failure to comply with the statute in respect to setting out the facts fully. See Irwin’s Code. A plea of usury must conform to the statute, and be filed as prescribed. This is one' of the defenses which has been made the subject of special and particular legislation.

3. The true indebtedness of a member of a building and loan association is not necessarily the difference between what he has received and what he has paid back. The very nature of such an institution involves a profit and loss account, and an expense account for management. An advanced, or borrowing member, as well as the rest, holds a relation to these accounts which must be adjusted before he can repudiate his express contract on the plea of deficient consideration or on that of usury, and take his leave of the association. Whether he gets full consideration, or whether he pays usury, does not depend simply on whether the amount he refunds is more than he has drawn out with lawful interest on the latter sum. There may be no excess after deducting from his payments his due share of the losses and expenses. As he takes his chances for profits in case an early winding up should occur (in which event his payments cease from that time), the rule of equity requires that he should incur the hazards fairly incident to the business in the way of losses and expenses, and bear his due proportion of the same. There is no proper basis for ascertaining usury and arriving at the amount of it, without all these elements are brought in.

4. Nothing is better' settled than that the validity of an actual charter, apparently legal, cannot be impeached on extrinsic facts in a mere private action between the corporation and its alleged debtor. The fraud of the corporation in procuring its charter could not be put in issue in this suit.

5. The result is, that there was no error in striking the pleas.

Cited for reversal: Fraud, Code, §2751. Usury, Id. §3452; Irwin’s Code, §3419 ; acts of 1875, p. 105. Consideration, Code, §§2739, 2743, 2745, 2748, 3471.

Cited for affirmance: 32 Ga., 291; 25 lb., 534; 6 lb., 156; 46 lb., 166; 60 lb., 185.

Judgment affirmed.