113 Ga. 247 | Ga. | 1901
In tbe early part of 1893, Mrs. Georgia L. Wooten became a member of tbe Interstate Building and Loan Association. Among tbe by-laws which bad been adopted by tbe association and which were of force at that time was one providing that “Amendments to these by-laws may be made by the board of directors by a majority vote.”' Subsequently, after paying five monthly installments of dues, Mrs. Wooten applied for and obtained an advance of $2,000 upon forty shares of stock held by her. The contract with the association under which she procured this advance was evidenced by a bond executed by lier and delivered to it on June 17, 1893,which recited tbe fact that,“to secure the payment of the” advance or loan made to Mrs. Wooten, she had “conveyed to said association a certain house and lot in Washington, Ga.” It was expressly stipulated in this bond, “ that, under
“Some time about July, 1898, Mrs. Wooten notified the association that she desired to settle in full the loan” made to her, “ according to the terms of her contract, and asked for a statement of the amount due. In reply, the association sent her a statement requiring a settlement on the basis” of 98 monthly installments, as provided for in the amendment to its charter; and she thereupon “ refused to settle on this basis, on the ground that it required of her payment of more than she was due on a proper basis of settlement.” She “did not offer to settle for any specified or definite amount,” but notified the association that she claimed the right to stand upon her contract with it as written; and on its insisting upon the payment of 98 monthly installments as the only basis upon which a settlement could be had, she declined to make further monthly payments. Thus the matter stood for a period of nine months, when the association brought suit against Mrs. Wooten upon her bond, claiming that she had committed a breach thereof, and accordingly that the principal of the loan made to her, together with interest thereon and certain fines, had become due and payable. In defense to this action Mrs. Wooten filed an answer in which she alleged her offer to settle with the association in accordance with the express terms of her contract with it, and its .refusal to allow her so to do, on the ground that she was bound by the terms of the amendment to its charter. She further interposed the defense of usury, based upon the allegation that the manner in which the plaintiff conducted its business was not such as could be legitimately pursued by a building and loan association, pure and simple, in furtherance of “the purposes contemplated by law.” On the trial of the case, “the court ruled that Mrs. Georgia L. Wooten had the right to pay in full her loan from the association on the basis and terms prescribed by the by-laws- . . which were of force on June 17,
We find in the second edition of the American and English En-cyclopaedia of Law (vol. 4, p. 1047) the following statement: “As to the question whether a by-law granting a right of withdrawal can be altered so as to take away or modify that right, the courts are at variance. It has been held, on the one hand, that such a bylaw creates a vested right, and that any attempt to change it will be ineffectual. On the other hand, it has been held that an association having power to change its by-laws may make the alteration in question, as the member holds his membership rights subject to
Where one, on joining a building and loan association, voluntarily consents that it may subsequently alter, amend, or repeal then existing by-laws, in so far as they relate to the plan upon which its business shall be transacted, the only vested right which he acquires by reason of his contract of membership is that he shall at all times stand upon an equal footing with his fellow-members as regards the privileges extended to and the burdens imposed upon them. This being so, should he thereafter desire to rescind that contract and cease to be a member, he would be entitled to do so upon such terms only as the association was for the time being inviting its stockholders to accept; though, upon his giving due and formal notice of his acceptance of the offer then extended to members wishing to sever their connection with the association, his privilege of withdrawing therefrom upon those terms would immediately become a vested right which could not be defeated by its tardily undertaking, by means of a change subsequently effected in its by-laws, to recall the offer thus voluntarily made by it. What has just been said is to be understood as applying to such stockholders only as are commonly known as non-borrowers or investors. A borrowing member would stand upon a somewhát different footing. It is to be borne in mind that one of the distinguishing characteristics of a mutual building and loan association, as compared with private corporations in general, is that, in duly transacting its legitimate business, such an association ordinarily deals exclusively with its members. If, after joining an association of this kind under' a contract of membership such as that above indicated, a shareholder desires to procure a loan, the terms and conditions upon which the same shall be made to him must necessarily become the subject-matter of another and distinct contract between him and the association. As a general rule, it is agreed that the loan be made in accordance with then existing by-laws prescribing the terms upon which advances may be made to members upon
Our attention has been called to the' fact that in a similar legal controversy between this same association and one Juliet Hafter, which arose under circumstances almost identical with those disclosed by the record in the present case, the Supreme Court of Mississippi looked favorably upon practically the same contentions as are now relied on by the association. Interstate B. & L. Assn. v. Hafter, 76 Miss. 770. The argument advanced in support of the conclusion reached in that case was to the effect that, as the association had reserved to itself power to amend its by-laws, a borrowing member, who did not give notice of his election to repay the loan made to him until after the repeal of a by-law prescribing the terms upon which borrowers might exercise the privilege of withdrawal, lost all right to call upon the association to settle with him upon those terms, notwithstanding the by-law in question was of force at the time such loan to him was made. As applied to an investor or non-borrowing member, this line of reasoning would be
Not long since, we were called upon by another member of the same association which is a party to the present action to construe a contract evidenced by a bond signed by him, the terms of which were expressed in almost the identical language employed in the bond signed by Mrs. Wooten. Maynard v. Interstate B. & L. Assn., 112 Ga. 443. We sustained the contention upon which the association then saw fit to rely, holding that a bond executed by an advanced member “ on the date of receiving the advance, by the terms of which the by-laws of the association are made a part thereof, must be treated as referring to the by-laws as they stood on that date.” It appeared in that case that at the time Maynard joined the association, and on the date upon which he made his application for a loan, the by-law according to borrowing members the right to
Judgment on the main bill of exceptions affirmed; cross-bill of exceptions dismissed.