| N.H. | Jun 5, 1896
The assignee of the defendant corporation, upon his petition properly brought before the court, asks for instruction in the performance of his duties, and files certain questions setting out the particular matters concerning which he desires information. In the absence of a case calling for a decision, the court is not inclined to answer the first question.
The assignee can collect of a borrowing member only the amount actually advanced by the association. The mortgagor cannot be compelled, under the circumstances, to pay more than the sum actually received by him with legal interest thereon. The insolvency of the defendants terminates their operations as a building and loan association, and the contracts made with borrowing members cannot be enforced. The only thing that remains to be done is to wind up the affairs of the association equitably as to creditors, and as between the members themselves. Borrowers who are required to pay the amounts actually loaned to them, with interest, will be entitled, after the debts of the association have been paid, to a pro rata dividend upon their share payments, equally with non-borrowers. They will thus be held to the payment of their share of the losses. Strohen v. Association, 115 Pa. St. 273.
As the insolvency of the association and the appointment of an assignee have terminated the contracts with the borrowing members, the interest paid upon the gross premiums to March *557 18, 1896, and the cash premiums paid to the same date, by virtue of those contracts, should be applied in reduction of the amounts actually advanced to the borrowers as a payment made for that purpose. In other words, all payments on the loan accounts in excess of six per cent per annum are to be credited on the principal of the loans, and deducted from the amounts actually advanced to the borrowers in determining their indebtedness to the association.
The money received by the association prior to March 18, 1896, and now in the hands of the assignee, was paid for the purpose of meeting the interest due on the mortgages. Payment to the association was payment to the mortgagees. The association could have no interest in these funds, and no duty to perform, other than to pay to the holders of the first mortgages the sums to which they are severally entitled. The funds were received as trust funds, and must be paid in full by the assignee to the holders of the first mortgages. York v. York Market Co., ante, p. 419.
The association did business in many states, and the assignee now has in his possession mortgages of real estate in several states where ancillary receivers have been appointed. The assignee can collect none of these mortgages as a, against the local receivers, who will be forced to resort to foreclosure proceedings in all cases to obtain decrees for the protection of the mortgagors. Under these circumstances, a majority of the court are of opinion that the assignee should deliver the mortgages and evidences of indebtedness in his hands to the local receivers, who will then be enabled to collect and adjust the claims against borrowers in their respective states, leaving the matter of distribution of the funds to the orders and decrees of the courts.
Case discharged.
CARPENTER, C.J., and PARSONS and PIKE, JJ., did not sit: the others concurred.