Home Mutual Building Ass'n v. Thursby

Bartol, 0. J., delivered the opinion of the Court. The questions presented by this appeal arise upon the exceptions of the appellant to the auditor’s report, which was ratified and confirmed by the Circuit Court. The account stated by the auditor is not in the record, but in lieu théreof is the written agreement of counsel, from which it appears that the account shows a balance of $1500. to be due the Association from the appellee, on the 23rd day of March 1880, when his last payment was made.

It further appears that the auditor ascertained that balance “by deducting the full amount of each weekly payment, from August 22nd 1816 to about April 8th 1819, from the amounts advanced, and adding interest on the weekly balances at the rate of six per cení, per annum, and thus at the end of each week finding ’ the balance due; and that from April 8th 1819 to March 23rd 1880, the auditor deducted the amounts paid every four weeles, and added the interest for 28 days instead of I days, bringing thus a balance of $1500,10. In a supplementary statement of the auditor, he says, “that in the calculation of the interest on this debt of defendant, if the weekly payments had been applied weekly, and the interest calculated weekly throughout the statement, as was done in a large part of it, the result would show an indebtedness by defendant to complainant of something less than $1500, say 20 or 30 cents less,” &c. The question presented by the exceptions is whether the auditor’s account was stated upon correct principles. The ’appellant is a' Mutual 'Building Association chartered in August 1814, under the Act of 1868, ch. 411. ²⁸⁷ The appellee became a member in August 1876, and subscribed for 25 shares of its stock.

In May 1877, he subscribed for 25 additional shares. The Association was authorized by sec. 86 of live Act of 1868, to require the appellee at the time of subscribing for stock “to pay such bonus or assessment as might be fixed or assessed, in such manner as might be provided by the corporation, in order to place such new members on a footing with the original members, and others holding stock at that time." In this case the bonus or assessment required to be paid by the appellee was for “bade dues;” that is an amount equal to the weekly dues of 25 cents per share, counting from' the time the Association was organized, to the time of his subscription. This was a just and reasonable requirement, and such as is contemplated and authorized by the statute, as it placed the appellee “on a footing with the original members and other stockholders." The amount required, instead of being paid in cash, was by the consent of the appellee, deducted from the amounts loaned or advanced to him. After the loans to him, or as it is denominated, after the redemption of his shares, he continued to enjoy the same rights and privileges as other members holding unredeemed shares, and was entitled to participate equally with them in the benefits of the Association; because by the accumulation of profits, or the successful working of the Association, the time during which his payments were to be continued would be shortened.

Under his contract, such payments were to continue until the society should have in its treasury, clear of losses, a sufficient amount to pay each unredeemed share 8125, when the appellee's contract would end, and the corporation be dissolved. Both in the Constitution of the society, and in the contracts of the appellee, the facts are similar to those which existed in Robertson’s Case, 10 Md., 397 . Except that the inter'est which the appellee agreed ²⁸⁸ to pay exceed sixper cent.per annumon the sums advanced, which the statute did not authorize the appellant to receive. The consequences of the exaction of excessive interest will be stated hereafter.

In our opinion the principles upon which the auditor’s account was stated are erroneous. The appellant Association is not insolvent, nor has it ceased active operation, therefore, the cases of Windsor & Applegarth vs. Bandel, 40 Md., 172 , and of The Low