Blue Rapids Opera House Co. v. Mercantile Building & Loan Ass'n

101 Kan. 76

• Court: Supreme Court of Kansas
• Decided: July 8, 1898
• Docket: No. 10,791
• Status: Published

Opinion

Per Curiam:

The controversy in this case is as to the foreclosure of a mortgage given by the Blue Rapids Opera House Company to the Mercantile Building & Loan Association, a corporation of Missouri. The plaintiff was a corporation organized to purchase ground and erect and maintain thereon, an opera house. Ground was purchased for that purpose, and in order to erect the building it became necessary for the com-, pany to borrow money. A loan of $2000 was necessary in order to erect and complete the building, and it was obtained from the building and loan association. In order to obtain the loan the opera house company became a shareholder in the building and loan association. The money' was obtained upon the execution of .a bond and mortgage. Default having been made in the payments to be made upon the same, proceedings were had to foreclose the mortgage.

The opera house company contends that its officers were without power to make the loan by taking stock in the building and loan association. Whatever may have been the powers of the officers of the opera house company in this respect; the defense of ultra vires is not available to the company. The contract has been in good faith fully performed .by the other party, the money has been paid, and the opera house company has had the full benefit of the payment and the performance of the contract. The law now interposes an estoppel and will not permit the validity of the loan contract to be questioned. (Railroad Co. v. Johnson, 58 Kan. 175.)

• There is a further contention that by reason of the premiums and fees paid for membership in the building and loan association the contract was usurious. We have examined the provisions of the contract, the by-laws of the association and the testimony with respect to the contract, and are unable to say that the contract is usurious.

The judgment of the district court will be affirmed.