98 Va. 445 | Va. | 1900
delivered the opinion of the court.
Appellant instituted his suit in the Hustings Court of the city of Roanoke, on behalf of himself and all other creditors of the appellee, on the 30th of September, 1898, in which he states that he is the owner of ten shares of the stock of the company, upon which he had paid $500 in monthly instalments of $10 each; that on the 20th of April, 1893, he gave notice of with
There are other averments of fact in the bill, the tendency of which is to strengthen the position of the appellant, but enough has been said to enable us properly to present our conclusions with respect to the law of the case.
The defendant demurred, and also filed a plea of the statute of
The position occupied by a withdrawing member of a building association is not very clearly defined by the authorities. It is said that he is not in all respects a creditor, for if that were so he might get judgment, issue an execution, acquire a lien upon real estate, and subject the personalty of the association to the prejudice of other creditors. He is no longer a member of the association so far as his right to participate in its management and control is concerned. He has no right of action against the company until a fund accrues out of which, in accordance with the charter and 'by-laws of the company, his debt should be paid; and, as it apjiears from the averments of this bill that no such fund existed at any time in this case, it would seem that the right of action has never accrued to him as a creditor. If this be true, then it follows that his right to sue is not affected by the statute of limitations; but, if he is to be regarded only as a creditor, he is still out of court, because there was no right of action which entitled him to be in court. A member of such an association must, upon withdrawal, retain some relation to the Company, growing out of his membership, other than that of creditor. It seems to us that by so much as he falls short of being clothed with the rights of a creditor, by so much there must remain in him the residuum of his rights as a member; otherwise, as in the case at bar, he could not sue as a creditor, because there was no fund out of which his debt could be paid, and the company, by its dereliction of duty, would deny all redress if he is not permitted to seek a remedy in his capacity as stockholder. These propositions seem to be supported by authority.
In Heinbokel v. Building Association, 58 Minn. 340, 25 L. R. A. at page 216, the Supreme Court of Minnesota held that a member of ap association who has brought himself within the
In support of the position that a withdrawing member has not lost all of 'his right or interest as such in the association, there are numerous decisions, and the authority of respectable' text-writers.
“'The right of members to presently withdraw deposits is practically limited to funds on hand. And the withdrawing member must show that there are funds for that purpose before he can enforce his demand, but it is an abuse of discretion for the directors to invest the entire funds in real estate so as to leave none applicable to the payment of withdrawing members, and thus defeat their rights. When notice of withdrawal is given the association, it' should arrange the disposition of its receipts so as to meet its payments when due. While the right to withdraw is only grantable out of funds designated for that purpose, it is not intended that rightful lack of funds shall defeat the right as against the members. So, if the association is solvent, and a member gives notice of withdrawal, and the notice had matured before the association is being wound up, he is entitled to. be paid out of the assets, after outside creditors, in priority to those members who had not given notice, notwithstanding the fact that after he had given the notice there were no funds for payment. The intention of the rule is to prevent the application of the funds to withdrawals to such an extent that its operations will be crippled; and when it winds iip, the reason of the rule does not apply, which readily defeats the application, of the rule itself.” Thompson on Building Associations, chapter. 8, section 13.
It is said in Endlich on Building Associations, 2d edition, sec
In Sibun v. Pearce, L. R. 44 Ch. Div. 354, Lindley, L. J., says of the position of one who has given notice of withdrawal, but has not received payment, “that he is not an ordinary creditor is plain. He cannot come into competition with outside creditors. On the other hand, as between himself and the continuing members, he. is entitled to be paid the amount due to him before they can divide the assets. In that sense he is a creditor, though he cannot take part in the affairs of the society.”
We have seen that a withdrawing member cannot sue until a sufficient fund is accumulated by the society to meet his demands, for until that event has happened he has no right of action, and it is well established that the statute of limitations does not begin to run until the right of action accrues. We have seen that it is the duty of the association to set apart a fund to meet its Obligation to withdrawing members, and it conclusively appears from the bill under consideration that this duty in this instance has not been performed, and that the course taken by the stockholders precludes the possibility that appellant can obtain relief from that source.
The prayer for relief -asks the appointment of a receiver, and, if need be, the winding up of the affairs of the company. This prayer, upon the facts presented by the bill, is sufficient to entitle the appellant to the relief which he seeks, if upon a hear
The decree of the Hustings Court must be reversed, and the cause remanded to be further .proceeded in, in accordance with the views expressed in this opinon.
Reversed.