Windsor v. Bandel

Bartol, C. J., delivered the opinion of the Court. “ The Union Building Association No. i,” was duly incorporated in 1866, under and in conformity with the provisions of the Code, Art. 26, sec. 30, &c. The company commenced operations in February, 1866, the first subscriptions to the stock being made at that time ; the articles of incorporation were duly recorded on the 10th day of April, 1866. By these articles it was provided that the stock should be limited to one thousand shares, of which no member should be entitled to hold more than twenty unredeemed shares. It was further provided that the association should continue until each unredeemed share of stock should be worth in cash two hundred dollars.

It appears by the evidence that all the shares were subscribed, and the association went on prosperously for about a year and a half; after which a great many of the members availed themselves of the privilege of withdrawing, reserved by Article 3, sec. 1; in consequence of which, it was found that the affairs of the association could not be successfully carried on, and in the opinion of the directors and a large majority of the members, it' was considered advisable to wind up its affairs and effect a dissolution. With this view a committee was appointed in October, 1810, who reported on the 11th day of January, 1811, in favor of winding up the affairs of the association; at that time the number of shares was reduced to 224, of which, 133 were redeemed and 91 unredeemed or free shares. The proof in the cause conclusively shows that the association could no longer be profitably continued, and that the ¹⁷⁵ interests of all concerned would bo promoted by its dissolution. Questions arose as to tbe mode in which the dissolution should be effected, and also the terms upon which the members whose stock had been redeemed, and against whom the company held mortgages, should be allowed to extinguish or satisfy their mortgages.

In January, 1871, by resolutions regularly passed, in accordance with Article 26, providing for amendments, the Articles were amended, by repealing the second section of the second Article, and the first section of the fourteenth Article. These amendments were duly recorded as required by the Code, on the 2nd day of February, 1871; and their effect was to repeal or abrogate the provisions regulating the amount of weekly dues to be paid by the members, the time prescribed in the original Articles,for the duration of the society, and the provision for the' redemption of shares by the loan or advance of money and taking mortgages therefor. At the same time, a resolution was passed proposing to members whose stock had been redeemed, to secure the release of their mortgages, by paying the money originally advanced to them, deducting therefrom the amounts which they had respectively paid on account of weekly dues, and without requiring them to pay the bonus of three dollars per share, as was required by Article 18, sec. 1, to be paid by mortgagors, voluntarily seeking to obtain releases. It appears that these terms were accepted by all the mortgagors except the appellants, who refused to acquiesce therein, and filed their bill of complaint against the appellees, who were members holding unredeemed or free shares, and some of whom were officers of the association, charging them with a fraudulent conspiracy to dissolve the association prematurely for their own profit, to appropriate to their own use its funds and earnings, and to deprive the appellants of their just share or proportion of the same.

A very careful examination of the record has satisfied us ¹⁷⁶ that so far as fraud is charged against the appellees, the allegations of the bill are not supported by the proof. On the contrary, the evidence shows very clearly that all the proceedings of the association, looking to its dissolution, were conducted regularly and in good faith, and if the case of the appellants rested exclusively upon the allegations of fraud made in their bill, we should have little hesitation in affirming the decree of the Circuit Court, dismissing the bill for want of equity. But we are of opinion that the appellants are entitled to relief in respect to their mortgages held by the association; which they are entitled to have released upon the payment of the balance justly due thereon, and in order to ascertain this balance an account ought to be stated between them and the association. The bill contains a specific prayer to that effect, and the parties appellants are entitled to this equitable