Lister v. Log Cabin Building Ass'n

Stewart, J., delivered the opinion of the Court. The appellant, by his bill, filed in the Circuit Court,, amongst other things, alleges that the Log Cabin Build ¹¹⁷ ing Association, of which he is a member, in disregard of its duty, insists upon his continued payment of his weekly dues, and its right to impose fines upon him, in case of his refusal. He further alleges, that by the terms of the Association be is entitled to bis final distributive portion of the assets thereof; and that the company is in a condition to close its affairs, in pursuance of the articles regulating its management and providing for its dissolution. The bill seeks to restrain the Association from any further collection of weekly dues from him, or the imposition of,fines for their non-payment, and to compel it to pay him, what he alleges is, his rightful share of its assets.

For this purpose he prays that a receiver may be appointed by the Court to settle up its affairs. The Association, by its answer, on the contrary, denies the right of the complainant to final payment of bis share, and that it is in such condition as to authorize it to terminate its affairs ; and claims the right to exact from the complainant the payment of his weekly dues and to impose the appropriate fines for any default in their non-payment. The only material, questions involved in these issues are, whether the Association has authority to claim weekly dues 1'rom a member who has not accepted a loan of money from the company, in exchange for all other rights to which he might otherwise have been entitled ? and whether the Association, according to the terms defining its operations, and providing for its duration and dissolution, is in a condition to terminate its existence, and to make distribution of its assets? Proof was taken as to the character and extent of its operations and assets, and upon the hearing the Circuit Court dismissed the bill.

From our examination of the proceedings, including the exhibits, and copy of the articles of association, and the testimony taken, we think no error was committed in the dismissal of the complaint. ¹¹⁸ The articles of the Association are few and general, not detailed and specific ; leaving much to construction ; but they are quite sufficient to shew their purport and effect, and the duties of the Association, and the relative rights and obligations of the members, to enable us to dispose of the questions involved in this case. The 1st article and 1st section of the- Association is declaratory of its title and objects, and professes to have in view, as its chief purpose, the accumulation of a fund from the savings and deposits of the 'members, to enable each one to purchase real and leasehold property. The 2nd and 3rd sections of same article limit the number of shares and fix the value of each share. The 9th article provides that each shareholder shall be entitled to the sum of $112, in full settlement, and authorizes its payment upon the terms prescribed; and when accepted, the shareholder thus drawing his share in advance, is precluded from any distributable portion of the surplus profits upon the dissolution of the company.

By this article provision is also made for the loan of any funds on hand, to a member, preferring prepayment of his share, which it seems the Association considered a valuable privilege. Each shareholder is secured a chance of having his share paid in advance, by becoming a borrower of the funds applicable to such purpose, upon the terms prescribed. But it is a part of those terms that the shareholder thus settled with, shall, notwithstanding, pay his weekly dues, with the interest on the money thus drawn, until each member shall have received his share ; or the money drawn, $112 per share, be returned. He is required to execute a mortgage, not for the repayment of the money drawn, but appropriate to the responsibilities incurred, and adequate to secure the weekly payments, for the time specified; when his payments are to cease, and the mortgage be released. ¹¹⁹ The mortgage is not for the repayment of the sum advanced, but for the payment of the weekly installments and performance of the other covenants.

According to its terms, payment can only be coerced to that extent, if there is no'default; and it is to be released whenever the funds of the Association enable those who have not borrowed, and thus drawn their shares in advance, to receive their portion, according to the provisions of the 17th article, however much of the principal sum advanced may appear to be due. It is executed in pursuance of the provisions of the 9th article, and is payable and releasable, according to its tenor and effect, that is, it is payable in installments, until the time arrives when the body corporate, the respondent, shall have sufficient funds to pay the holders of every unredeemed share of its stock the sum of $112, clear of all losses and liabilities, and until the corporation shall become extinct — it is releaseable then, as provided by the 17th article. The mortgagor may obtain a release sooner by compliance with the 15th article — such is the peculiar character of the mortgage given by the borrowing member, and it is unlike the ordinary mortgage for the payment of a specific sum of money. Robertson vs. Amer.

Homestead Ass’n, 10 Md., 397 ; Shannon vs. H. B. A. Ass’n, 36 Md., 394 . All the members, including those who have accepted a loan and those who have not, are obliged to pay their respective weekly dues, and upon the punctual discharge of that duty the success of the Association mainly depends. By the tenth Article, a fine is authorized to be imposed for the non-payment of the weekly dues, upon the defaulting members, without discrimination. The shareholders are not described in the Article as the “'redeemed” and the “unredeemed;”