Border State Perpetual Building Ass'n v. McCarthy

Bartol, C. J., delivered the opinion of the Court. It appears from the record, that the appellee became a member of the appellant corporation on the 25th day of •June 1873, by subscribing for ten shares of its stock. On the 16th day of October following, he increased the number of his shares to twenty. On April 30th 1874, he redeemed ten of his shares, and received an advance of $2600- -and executed a mortgage of certain leasehold property in Baltimore City, conditioned for the payment by him to the mortgagee, as follows: 1st.

The sum of one dollar every two weeks, as biweekly dues. 2nd. The sum of eight dollars every two weeks as interest, being eighty cents on each share of stock, upon which he had received the advance. 3rd. To pay all ground rent, taxes and assessments on the property. ⁵⁵⁸ 4th. To pay all fines imposed on him by the corporation, in accordance with the provisions of its constitution. 5th.

To keep the property insured. All of which payments and covenants were to continue in force, until the bi-weekly dues aforesaid, together with the profits on said redeemed shares, as credited to him on the books of the association, shalí amount to the sum advanced to him. The appellee continued to pay the bi-weekly dues on his twenty shares of stock, and the interest as provided in the mortgage on the $2600, bi-weekly until December 1875, when he withdrew his ten unredeemed shares, in the exercise of the right given to him by the constitution of the association, {Art. 7, sec. 1,) and received the money for the same, according to the provisions of the Article and section referred to. He continued thereafter to pay the dues and interest, as provided by the mortgage, until May 10th 1877, when he ceased to make his payments.

On the 11th day of July following, the appellee having failed to make his payments, and the taxes and ground rent on the property being in arrear; the appellant, after giving him notice, instituted proceedings under the mortgage, and a decree for a sale being entered, the trustee was about to sell, when he was restrained of an order of the Circuit Court passed on the petition of the mortgagor. The case was, by order of the Court referred to the auditor, for the purpose of stating an account between the parties. An account was stated, to which the appellee excepted ; whereupon the Court again referred the case to the auditor, “ with instructions to ascertain from proofs already before him and filed in the case, and also from further proofs to he produced by the parties, the actual amount due by defendant to complainant, under the mortgage,” &c., &c. On the 20th day of November 1879, the auditor made his report, accompanied by a statement of account, to ⁵⁵⁹ which the appellant filed exceptions ; hut the Circuit Court, by its decree passed on the 9th day of January 1880, ratified the same, and from this decree the present appeal was taken.

The auditor being of opinion that the association is not one in which there is an “ equality of membership, or mutuality of interests between the members, such as existed in Robertson’s Case, 10 Md., 397 ; held that the case falls within the principle laid down in Taylor’s Case, 41 Md.,” 409, and accordingly stated an account wherein the mortgagor is charged with the sum advanced and six per cent, interest thereon; deducting from time to time, the several amounts paid by him for bi-weekly dues, interest and fines, and deducting also the dividends of profits accruing to him upon his stock, and ascertaining the balance due, in the ordinary way, as between debtor and creditor. The exceptions to the account filed by the appellant, were as follows: “1st. For that the auditor in making up the account, assumes that the mortgage is usurious. “ 2nd. For that the auditor assumes in his said account and report accompanying it, that the transaction between the complainant and respondent, relating to said mortgage, constituted a loan of money such not being the fact, and there being no evidence in the mortgage or the testimony. “ 3rd.

For that the auditor in stating the account, entirely ignores the fact that the respondent is a member of the complainant, and a participant in all its profits. “ 4th. That the auditor gives the respondent credit for the whole amount of dues, interest and entrance fees, and other charges on the whole twenty shares held by him, including ten unredeemed shares, wholly unconnected with the said mortgage, and the shares mentioned therein, and which unredeemed shares were withdrawn long before ⁵⁶⁰ the forclosure in this case, and the money due thereon, repaid to the respondent in accordance with the constitution of the complainant. “5th. That the auditor, while giving the respondent all the rights and benefits of a mere borrower, and relieving him from all liability as a member of the complainant, yet allows him all the benefits and advantages of membership in the complainant, and all the profits thereof. “ 6th. And for other reasons to be stated at the hearing.” The appellant was incorporated under the general incorporation Act of 1868, ch 471.

It is as its name imports ■a “ perpetual building association ” as contra-distinguished from a terminating building association, such as existed in B Rertson’s Oase. In that case, the society by its constitution, was to cease to exist, when it should have sufficient funds on hand to pay the holders of every unredeemed share of its stock $200, clear of all losses and liabilities ; and the stipulation in the mortgage was for the payment