#### Christopher Hagerman et al. *v.*Ohio Building and Savings Association et al. John D. Mercer et al. *v.*The Concordia Building and Savings Association, of Dayton, Ohio.

1. Where an association of persons, in good faith, attempted to organize as * a corporation under the act of February 21, 1867 (64 Ohio L. 18), and afterward commenced and carried on business as a building corporation, its members and others who have contracted with it as such corporation are estopped in a suit on such contract from setting up the defense of no corporation on account of a defect in its certificate of incorporation.

2. The fact that a member of such corporation holds a greater number of shares than is allowed by its by-laws, but not in excess of the number limited by the-statute, is no defense against any claim which the corporation may have against him on account of such shares.

8. Building corporations are not required to ascertain the use to which a member, who obtains a loan on his stock, intends to apply the money.

*4.*Such corporation, under the act of May 9, 1868 (S. & S. 194), may, by its by-laws, assess and collect a reasonable fine, from a member of the association, for default in the payment of his stated due, but can not assess- *187or collect more than one fine for the non-payment of the same stated due; and there is no power conferred upon the corporation to levy, assess, or collect a fine for any default in the payment of interest on loans advanced.

6. "W here a loan is advanced to a member upon his stock, it is within the capacity of the corporation to take security from such member by mortgage or otherwise for the payment of fines, as well as stated dues, which may be lawfully assessed on account of such stock.

6. The payment of stated dues and fines can not be resisted by a member on the ground that the by-laws of the association have not been adopted by a vote of the directors, where it appears that they have been recorded, ■ acted upon, and enforced as the by-laws of the association.

7. After breach of the conditicm of a mortgage given to secure the payment of stated dues, interest on loans advanced, and fines, the decree in an action to foreclose should be confined to the amount of such dues, interest, and fines, then due and unpaid.

8. In computing the time for which notice of a sale on execution should be advertised before the day of sale, as prescribed in section 436 of the code, the day on which the notice was first published may be included, and the day of sale must be excluded. Section 597 does not apply in such case. ■When the notice is published in a daily paper, as authorized by section 436, it is sufficient if the first publication be thirty days before the day of sale.

Error to the Superior Court of Montgomery County.

The following statement is sufficient to an understanding of these cases:

As to Hagerman’s case. The Ohio Building and Savings Association claims to be a corporation organized under the act of February 21, 1867, entitled “ an act to enable associations of persons for raising funds to be loaned among their members for building them homesteads, and for other purposes, to become bodies corporate.” Jacob A. Smith, a member of the association, owning fifteen *shares*of its stock, of the nominal value of $200 each, on the 15th day of April, 1869, obtained a loan from the association, of $1,150, on ten shares of his stock; having bid as premium for the right of precedence in taking the loan $850 ;■ and thereupon executed to the association an instrument in writing, of which the following is a copy:

“$2,000. Dayton, Ohio, *April*15,1869.

“ I promise to pay to the Ohio Building and Savings As» *188sociation of Dayton, Ohio, the sum of two thousand dollars, value received, in an advanced loan of two thousand dollars, the full amount on ten shares of stock in said association owned by me, on each of which I agree to pay a weekly installment of twenty-five cents, in all $2.50 per week, and on one thousand one hundred and fifty dollars I agree to pay interest at the rate of six per cent, per annum, in equal monthly installments of $5.75 each ; all to be paid until the said association is dissolved according to the constitution and by-laws -thereof.

“Jacob A. Smith.”

At the same time, in order to secure the association, as well as for other considerations moving from said Smith, Christopher Hagerman executed to the company his certain deed of mortgage on certain lots in the city of Dayton, the condition of defeasance therein written being as follows :

“ That if the said Jacob A. Smith should punctually pay said association, or its assigns, the said weekly installments on said ten shares of stock, and the interest as stated in the note aforesaid, the fire insurance on the said premises, and all the fines and forfeitures according to the constitution and by-laws of said association, then these presents shall be void; but if the said Jacob A. Smith shall fail to pay, said weekly installments or the installments’ interest as above stated, the taxes, fire insurance premium, or fines .and forfeitures, when the same respectively are due, then the whole amount of said loan of two thousand dollars shall become due, and this mortgage shall be foreclosed.”

On the same day, Smith obtained from the association another loan of $545, on his remaining five shares of stock, for which he gave a premium of $455, and executed to the company another instrument, in form like the above, differing only in amounts.

To secure the association on account of this transaction, Eliza Jane Hagerman, with her husband, Christopher Hagerman, executed to the company a mortgage on other real estate, situate in the city of Dayton, containing condi*189¿ions in all respects similar to that of the above-described mortgage.

From and after the 5th of July, 1871, Smith wholl}7 failed to pay the weekly installments on his stock, the interest on said loans, and also the fines and forfeitures assessed against him according to the constitution and by-laws of the association.

The following provisions of the constitution, adopted by the association, are considered in the opinion :

“Art. IV. No member shall own more than ten shares of stock in his right. Each share shall be two hundred dollars. . . .

“Art. X. Each member shall pay into the treasury of this association an initiation fee of twenty-five cents per share, and the sum of twenty-five cents per week on each share as dues.

“Art. XI. *a.*Every week, or as often as there is enough capital at disposal, the money shall be sold to the highest bidder among the members. The member paying the highest premium shall receive payment of as many shares as he owns, at the rate of $200, after deducting the premium, or as many less as he may choose.

“ *b.*The capital loaned out must bring six percent, inter-, est, which shall be paid monthly.

“e. If a member becomes entitled to the receipt of an advance of capital he shall, within two weeks from the day on which he purchased the money, give sufficient security for the same. No member can receive such amount until the security has been submitted to the board. In case the said time should expire without- giving such security, the money shall revert to the association, and the member be-fined one dollar for every share. Should the purchaser, however, be able to give sufficient security and refuse to do so, then such purchaser shall pay a fine of fifteen dollars for each and every share so purchased by him. . . .

“ *e.*Should a member who has received an advance on his-share, or shares, neglect or refuse to pay the lawful installments, fines, taxes, and ground rents for the space of thir*190teen weeks, the board of directors, through the president or vice-president, shall proceed against the mortgaged property according to law.

“Art. XII. *a.*Every member who neglects to pay his weekly dues shall be fined for every share, for the first week, five cents; for the second week, ten cents; for the third and each subsequent week, fifteen cents. Should any member neglect to pay the interest according to Art. XI., he shall pay a fine of twenty-five cents per month for each of his shares. . . .

“Art. XX. 'Whenever each shareholder has received on •each of his shares, the sum of two hundred dollars ($200), after deducting an}7 premium which he may have bid on his share or shares, then this association shall be dissolved and cease to exist.”

On the 4th of November, 1871, the association commenced the original action to foreclose these mortgages, and prayed an account, in its favor, for the amount of the notes, to wit: $2,000 on the first mortgage, and $1,000 on the second, less certain payments admitted to have been made thereon. The balance thus claimed to be due was $2,347.50, with interest on the money advanced — to wit, $1,695, from July 5,1871, the date of the alleged default in payment of interest.

On the 5th of July, 1873, the cause was tried upon the issues joined, and a decree entered in favor of the plaintiff for $1,858.43, and a sale of the mortgaged premises, in case said sum with interest was not paid within thirty days thereafter.

It was shown upon the trial, that Smith used the money obtained from the association in the payment of pre-existing debts and in his general business, but not for the purpose of buying, building, or repairing a homestead, and that the association did not know and did not inquire as to the use to which he intended to appropriate the money ; thereupon the defendants offered to prove that it was the •custom of the association to make loans to its members without inquiry as to the object to which the money so *191loaned was to be applied by the borrower. This testimony was rejected by the court, and defendants excepted.

It was also made to appear in the case, that the certificate of incorporation was acknowledged before a notary public, and not before a justice of the peace.

As to Mercer’s case. The Concordia Building Association advanced to one Anton Englehart, a member, on the 17th of May; 1869, the sum of $530.50, as a loan on six shares of its capital stock of the nominal value of $150, each; the premium bid therefor was $369.50. Afterward, on the 14th of July, 1870, another loan of $465.75 was advanced on four other shares, at a premium of $134.25. For these loans, Englehart executed notes in form similar to those given in Hagerman’s case, and to secure the company executed mortgages upon like condition with those given by Hagerman and his wife.

Afterward, on the 11th of February, 1871, Englehart conveyed his equity of redemption in the mortgaged premises to one W.illiam Sehlotz. June 29, 1871, Sehlotz conveyed to one Anderson. On the 5th of December, 1871, Anderson conveyed to said Mercer. On the 11th of June, 1872, Mercer conveyed a part of the mortgaged premises to Erasmus Tucker, who assumed and agreed, as part consideration therefor, to discharge the lien of the building association. Tucker afterward conveyed to Mowrer upon like agreement.

' Default in making payments to the association in accordance with the conditions of the mortgages was made from and after the 6th day of January, 1873.

The constitution and by-laws of this association, as to all questions arising in this case, are similar to those of the Ohio Building and Savings Association.

On the 21st of June, 1873, the original action was brought on the mortgage, and on the 24th of November, same year, all necessary parties being before the court, the case went to decree; and the court found due the association $577.10, and ordered a sale in default of payment, etc.

The amount thus found, was ascertained by adding to *192the amount of weekly installments, interest on loans advanced and fines assessed against Engleliart prior to the-decree, the estimated present value of dues, and interest that would accrue down to the date of the probable dissolution of tbe association. At the date of the decree, forty weeks had elapsed from the time of the first default, and the future duration of the company’s life was estimated at 116 weeks. The master, to whom the account had been

referred, reported as follows :

ON THE FIRST CAUSE OF ACTION.

Weekly dues for 116 weeks to come.................. $174 OO

Interest for same time on $530.50...................... 71 63

$245 63

$216.41 put at interest for 116 weeks.................. 245 63

Present value of anticipated payments............... $216 41

Arrearages of weekly dues, 40 weeks at $1.50 per

week......................................................... 60 00

Arrearages interest, 40 weeks on $530.50............ 25 27

Eines on dues, 6 shares, 40 weeks, at 5 cents for first week, and 10 cents second and other weeks,

per share.................................................. 23 70

Eines on interest, at 25 cents per share per month 15 00

The present value of mortgage.................... $330 38

ON SECOND CAUSE OF ACTION.

Weekly dues for 116 weeks to come.................. $116 00

Interest for same time on $465.75...................... 62 91

$178 91

$157.62 put at interest for 116 weeks.................. 178 91

Present value of anticipated payments............... $157 62

Arrearages, weekly dues, 40 weeks at $1.00......... 40 00

Arrearages for interest, 40 weeks, $465.75........... 23 30

Eines on dues as in No. 1, 40 weeks................... 15 80

Eines on interest as in No. 1, 40 weeks............... 10 00

The present value of mortgage.................... $246 72.

The present value of mortgage in No. 1........ 330 38

Total present value of both........................ $577 lfr

*193B’pon this decree an order of sale issued, default having-been made in its payment, and a sale of mortgaged premises made.

Notice of the time and place of sale was published in the *Daily Journal,*of Dayton. The first publication of the notice was on Thursday, December 4,1873, and was continued in each Thursday edition of the newspaper, until the 3d day of January, 1874, on which day the sale took place. A motion to set the sale aside was afterward made, on the ground of irregularity and insufficiency of the publication of the notice. This motion was overruled, and defendants excepted. The sale was thereupon confirmed by the court.

*Botlin ¡j¡ ShaucJc,*for plaintiffs in error :

1. The attempted incorporation of the association was null and void, because the certificate of incorporation was acknowledged before a notary instead of a justice of the peace, as required by statute. Sec. 1, act of February 21, 1867, 64 Ohio L. 18; secs. 63, 64, and 65, act of May 1, 1852, S. & O. 301; sec. 2, act of May 1, 1852, S. & C. 271.

The first section of said act of February 21, 1867, by refering to sections 63, 64, and 65 of that of May 1,1852, in the manner and for the purpose it does, incorporates and makes them a part of itself, the same as though they had been enacted at the same time, and as a part of itself; and so, said section 63, by referring to said section 2 of said act of May 1, 1852, incorporates and makes it a part of itself. *Turner*v. *Wilton,*36 Ill. 385; *Ludlow’s Heirs*v. *Johnson,*3 Ohio, 572; *Stall’s Lessee*v. *McCallister,*7 Ib. 22.

Such a certificate is fatally defective. *Attorney-General*v. *Lee et al.,*21 Ohio St. 662 ; *A. & O. R. R. Co.*v. *Sullivant, 5*Ohio St. 276; *Atkinson*v. *M. C. R. R. Co.,*15 Ohio St. 21.

A compliance with the requirements of the statute in the act of incorporation, is a condition precedent to corporate existence. *Griffin*v. *C. L. Ex. R. R. Co.,*1 W. L. M. 36, 38 ; Angell & Ames on Corp., sec. 83; *Bank of Au**194*burn*v. *Aiken et al.,*18 Johns. 137; *Fire Department*v. *Kip,*10 Wend. 266, 268; *Attorney-General*v. *Lee et. al.,*21 Ohio St. 662 ; *Atlantic & Ohio R. R. Co.*v. *Sullivant,*5 Ohio St. 276; *Atkinson*v. *M. & C. R. R. Co.,*15 Ohio St. 31, 35; *Field & Co.*v. *Cook,*L. Ann. 153; *Harris & Steckle*v. *McGregor,*29 Cal. 124; *Makelumne, etc.*v. *Woodbury,*14 Cal. 424.

The defendant in error is not and never was a corporation, either *de jure*or *defacto*(1 West. Law Monthly, 39, 40), because it never possessed a valid charter, and that without a charter there can no more exist a corporation *defacto*than one *de jure.*

In an action between a company, claiming to be incorporated, and a third person, the corporate existence may be inquired into when such third person is not estopped by reason of his own acts. *Griffin*v. *C. L. Ex. R. R. Co., 1*W. L. M. 31; *Atlantic & Ohio R. R. Co.*v. *Sullivant,*5 Ohio St. 276; *Atkinson*v. *M. & C. R. R. Co.,*15 Ohio St. 31; *Lewis*v. *Bank of Kentucky,*12 Ohio, 149; Angell & Ames on Corp., sec. 635; *Field § Co.*v. *Cook,*16 L. Ann. 153; *Harris & Steckle*v. *McGregor,*29 Cal. 124; *Makelumne etc.*v. *Woodbury,*14 Cal. 424; *Carey*v. *Cincinnati R. R. Co.,*5 Clarke (Iowa), 357; *Welland Canal*v. *Hathaway,*8 Wend. 480 ; *Williams*v. *Bank of Michigan,*7 Wend. 540.

Are Hagerman and wife estopped from denying the corporate existence of said association ? We think not. They were not members of said association at the time of the ■execution and delivei’y of said mortgages, and in mortgaging their property they did so for the accommodation of ■said Jacob A. Smith, and stand in the position, so to speak, of sureties. *Bank of Albion*v. *Burns et al.,*46 N. Y. (1 Sick.) 170 ; *Vartie*v. *Underwood et al.,*18 Barb. 561.

There is no construction, no equity against sureties. *State*v. *Medary et al.,*17 Ohio, 565.

. Designating a joint stock company, in a contract, by a name appropriate to a corporate body, works no estoppel, unless it be distinctly stated in the contract that the company is an incorporated company. 7 Wend. 540; 16 L. *195Ann. 153; Angell & Ames on Corp., sec. 635 ; 8 Wend. 480 ; Herman’s Law of Estoppel, 234.

There was no estoppel by deed; and if it should be held that estoppel, in any way, applies, the estoppel is only *in pais.*

An estoppel *in pais*is a mere matter of evidence, and as such may be effectually rebutted. Angell & Ames on Corp., sec. 635; *Griffin*v. *C. L. Ex. R. R. Co.,*1 W. L. M. 36; *Welland Canal*v. *Hathaway,*8 Wend. 480 ; *Russell*v. *Topping,*5 McLean, 194; 2 Washburn on Real Estate, 2 ed. 457; *Carey*v. *Cincinnati R. R. Co.,*5 Clarke (Iowa), 357.

As to Hagerman’s wife, there can be no estoppel *in pais. Morrison*v. *Wilson,*13 Cal. 494 ; *Lowell*v. *Daniels,*2 Gray (Mass.), 168, 170; *Conover*v. *Porter,*15 Ohio St. 540.

If we are correct in the foregoing, it follows that said mortgages are void for want of a grantee. *Bank of Augusta*v. *Earle,*13 Pet. 120; 2 Washburn on Real Estate, 2 ed. 589; *Sloane*v. *McConahy,*4 Ohio, 167; *Rupel*v. *Topping, 5*McLean, 202; *Jackson*v. *Coy,*8 Johns. 385; *Hornbeck*v. *Westbrook,*8 Johns. 73; *Bank of Chillicothe*v. *Swayne,*8 Ohio, 237; *Creed*v. *Commercial Bank, Cincinnati,*11 Ohio, 489; *Muskingum Turnpike Co.*v. *Ward,*13 Ohio, 120.

It is averred in the petition that the plaintiff' is a company duly incorporated, etc. This is denied in the answer. It is necessary for a corporation plaintiff to aver its incorporation, and if denied, to prove it. *Phenix Bank*v. *Donnell,*40 N. Y. 410; 1 Nash Pl. and Pr. 348; 5 Ohio St. 276 ; 15 Ohio St. 31; Angell & Ames on Corp., sec. 634.

The association had no power to issue to Smith the five additional shares of stock, or to permit him to be the owner thereof; he could notown or be the holder thereof, because the law expressly prohibits it. Hence, said association has no power to compel him to pay up said stock, or, what is the same thing, to compel him to pay said weekly dues until its dissolution. Nor had said association any authority to make said advance loan to him upon said stock so *196illegally held by him, nor had he any legal right to receive the same. As to said five shares, Smith is not a member of said association, but an outsider, and one to whom said association had no power to loan its money; for it only has power to loan to its members. Being an illegal owner of said stock, how can it be claimed that at the dissolution of said association he would be entitled to receive the par value thereof, to wit, $200 per share? And yet that is the-legal effect of this transaction, the premium bid and the $545 advanced him being in effect an anticipated payment of the par value of said stock. Sec. 1, Stat., 64 Ohio L. 18 ; *Straus & Bro.*v. *Eagle Insurance Co.,*5 Ohio St. 62; *Bonham*v. *Taylor,*10 Ohio, 109; *Bank of Chillicothe*v. *Swayne,*8 Ohio, 286.

Where an act is prohibited by law, we do not understand how it is possible for parties to make such act legal. Lord Ellenborough, in *Langton Hughes,*1 M. & S. *576; Bank of Rutland*v. *Parsons, 21 Vt. 199.*

If said contract can not be enforced against Smith, then it can not be against Mrs. Hagerman, who stands in the position of his surety.

II. Smith did not obtain the money for any of the purposes for which the association was authorized to loan its-money. The association is only authorized to loan money to its members to enable them to acquire or build themselves homesteads, and to repair their homesteads. *Burgett*v. *Burgett,*1 Ohio, 481; *Taylor*v. *Fitch et al.,*12 Ohio St. 171; Cooley’s Const. Lim., 2 ed. 141.

The association must show affirmatively that the loans were made for some one, or all of the purposes specified in its charter. *McCullough*v. *Ross, 5*Denio, 567; 9 Paige Ch. 470. But if it is held that the mortgages are *primafacie*evidence that they were received by the plaintiff in the regular course of its business, such evidence may be rebutted, and if rebutted, the mortgages are nullities. 5 Ohio St. 62. Such *prima facie*evidence being overcome, the *onus*is then shifted to the association to prove the validity of the loans, and to show want of notice. *Pringle*v. *Phillips,**197Sandf. 157; *Davis*v. *Bartlett et al.,*12 Ohio St. 534; *Bailey*v. *Smith,*14 Ohio St. 405; 9 Paige Ch. 407.

There is no evidence showing that the by-laws were legally adopted by the board of directors. There is no presumption that they were so enacted, because the directors treated them in their business transactions as the by-laws of the association. *Durham*v. *Trustees of Rochester,*5 Cowen, 462; *Taylor*v. *Griswold,*2 Green, N. J. 223.

The legal enactment of by-laws is a condition precedent to the right to collect dues, fines, interest, and premiums, and in order to the collection of said premiums and fines, the law must have been strictly complied with. Sec. 1, act of February 21, 1867, 64 Ohio L. 18; *Bonham*v. *Taylor,*10 Ohio, 108; *Hall*v. *State,*20 Ohio, 15; *Landon*v. *Sumner,*10 Ohio St. 77; *Conkling*v. *Porter,*10 Ohio St. 31; *Bridgewater and Plk. R. Co.*v. *Robbins,*22 Barb. 67.

All said association was entitled to recover, was the amount of dues and interest that had become due, and payable at the time of commencing the suit, and interest on each installment from the time it become due, and lawful fines that had been then legally assessed.

Again, these mortgages are nullities in so far as they attempt to secure the payment of fines. The law does not empower the association to receive a mortgage on real estate as the security for the payment of the fines. Besides, the recitation therein that said Smith has agreed to pay all fines, etc., according to the constitution and by-laws of the association, does not make said paragraph *e*of article 11, part of the mortgages, or of Smith’s contracts. *Robertson*v. *American Homestead Association, 10*Maryland (Miller), 397.

*R. Thompson*and *J. P. Whitemore,*also for plaintiff's in error:

I. Whether the court erred in confirming the report of the master and rendering a judgment, as in cases of debt, in favor of the association, and whether, in cases of default by a member, there is anything more due the association *198than the difference between the amount received as an advance loan and the dues paid in upon his stock, must depend upon the construction given to the contracts of the parties and the statutes under which this association was organized. As against a corporation, the statute will be strictly construed. *Strauss*v. *Eagle Ins. Co.,*5 Ohio St. 59; *Bonham*v. *Taylor,*10 Ohio, 108; *Bank*v. *Ins. Co.,*12 Ohio St. 601-625; *Bank*v. *Chillicothe,*7 Ohio, 31, pt. 2.

II. The rules adopted in the various states where such associations have been in operation, are conflicting as to the amounts which they are entitled to recover upon these mortgages. *Mechanics B. and L. Association*v. *Conover,*14 N. J. Ch. 219; *Bechtold*v. *Brehm,*26 Penn. St. 269; *Denny*v. *W. Phil. B. A.,*39 Penn. St. 154; *Houser*v. *Herrmann B. A.,*41 Penn. St. 478; *McGrath*v. *Hamilton L. A.,*44 Penn. St., 383; *Kupfert v. Guttenburg Ass’n,*30 Penn. 465; *North Am. B. Ass’n*v. *Sutton,*35 Penn. St. 463; *Miller*v. *Second Jeff. B. Ass’n,*50 Penn. St. 32; *Robertson*v. *American H. A., 10*Md. 397; *Shannon*v. *Howard Ass’n,*36 Md. 383; 1 Cin. Sup. Ct. Rep. 469.

The public interests require that this court should settle the rule'in these cases.

III. One fine only can be imposed. *Monumental B. and L. S.*v. *Lewing,*38 Md. 445; 36 Md. 383; 10 Md. 397.

IV. The words, “ *at least thirty days,”*in section 436 of the code, means thirty clear days, of twenty-four hours each, before the day of sale. 3 Term, 623; *Pulling*v. *People,*8 Barb. 386. The first day is excluded. *Thorne*v. *Mother,*20 N. J. Eq. 257; *Walsh*v. *Boyle,*30 Md. 262; *Homan v. Liswell,*6 Cowen, 654; *Judd*v. *Fulton,*4 How. N. Y. 298 ; *Phelin*v. *Douglas,*11 How. N. Y. 193; *People*v. *N. Y. Cen. R. R.,*28 Barb. 284; 2 Cowen, 518, 605 ; Code, sec. 597; 6 Cowen, 659; Swan’s Tr. 622; Sedgwick, 419 ; 10 Ohio, 426.

The words “ before the day of sale” exclude the last day also; so that in this case only twenty-nine days intervened between the first insertion and day of sale.

The popular or received import, of words furnishes the *199general rule for the interpretation of statutes. *Maillard*v. Laurence, 16 How. U. S. 251; Potter on Statutes, 127, 132, 143; *Harrington*v. Heath, 15 Ohio, 484.

Now, a week in its ordinary signification is a period of seven days. Five consecutive weeks are therefore five successive periods of seven days each.

It is analogous to the word *term,*during which an estate is to continue. It must have a certain beginning and end. Tyler on Adv. Poss. 208; 8 Ad. & El. 577.

In view of the foregoing-authorities, and the provisions of section 597 of the code, we insist that *thirty-five*entire days must have elapsed after and exclusive of the day of the publication and before the day of sale, and that five insertions of the notice without the requisite lapse of time did not authorize the confirmation of this sale. *Gilfillin*v. *Koke,*1 West. Law Mon. 704.

*Houk § McMahon, J. L. H. Frank,*and *Wm. Craighead,.*for defendant in error:

1. As to whether the association was incorporated as far as this case is concerned, the intent of the parties should govern. 2 S. & C. 1172; *Warner*v. *Callender,*20 Ohio St. 190; *Hout*v. *Hout,*Ib. 119.

2. The association was a corporation *de facto.*It is sufficient if the corporation show itself a corporation *de facto.*To do this, it must be made to appear: 1. That there is some law under which the corporation with the powers assumed might lawfully organize; 2. A user by the corporation plaintiff of the rights claimed to be conferred by such law, and the existence of a corporation *de facto*is established. *Warner*v. *Callender,*20 Ohio St. 190; *M. E. Church*v. *Pickett,*19 N. Y. 485 ; *U. S. Bank*v. *Stearns,*15 Wend. 314; *Snyder*v. *Studybaker,*19 Ind. 462.

3. The plaintiff in error is estopped from denying the organization or legal existence of the corporation. *Jones*v. *Cincinnati Type Foundry,*14 Ind. 89; *Meikel*v. *The German Savings Fund Society,*16 Ind. 181; *Heaton*v. *Cincinnati and Ft. Wayne Railroad,*16 Ind. 275; *Eaton*v. *Aspinwall,**20019 N. Y. 119; *Tar River Navigation Co.*v. *Neal,*3 Hawks, N. C. 520; *Elizabeth City Academy*v. *Lindsey,*6 Iredell, N. C. 476; *Hamtramck*v. *Bank of Edwardsville,*2 Mo. 169; 6 B. Mon. 601; *Dutchess Cotton Co.*v. *Davis,*14 Johns 239; *Jones*v. *Bank of Tennessee,*8 B. Mon. 122; *People’s Savings Bank*v. *Collins,*27 Conn. 142; *Lucas*v. *Greenville Building Association,*22 Ohio St. 339; *Beardsley*v. *Foot,*14 Ohio St. 414; Herman on Estoppel, 229, 211, 212, ch. 8; *Hill v. West,*8 Ohio, 222; *Colcord*v. *Swan,*7 Mass. 291. As to estoppel by way of recitals of mortgage: Herman on Estoppel, 251, ch. 9; *Washington Insurance Co.*v. *Cotton,*20 Conn. 42; *Jackson*v. *Waldroon,*13 Wend. 178 ; *Kinsman v. Loomis Wood,*11 Ohio, 479.

4. It is the intent, the lawful use of its corporate powers, knowingly, for an unlawful purpose, that vitiates the right of a corporation to recover. *White’s Bank*v. *Toledo Insurance Co.,*12 Ohio St. 601.

5. The validity of the contract between Smith and the association was not affected by Smith’s owning more shares of stock than the law permitted. *Richmond Bank*v. *Robinson,*42 Maine, 589; *Little*v. *O’Brien,*9 Mass. 423; *Stewart*v. *National Bank of Maryland,*4 Am. L. R. 397.

McIlvaine, C. J.

The principal questions involved in these cases being common to both, they are considered together.

1. We will first dispose of the objections made to the ■corporate existence of the Ohio Building and Savings Association. The certificate of its incorporation was acknowledged before a notary public, and not before a justice ■of the peace, as the statute required. Whether this association has availed itself of subsequent legislation (69 Ohio L. 60) to cure this irregularity or defect, we are not advised. It does appear, however, that the Association was attempted, in good faith, to be organized as a corporation under the act of February 21, 1867 (64 Ohio L. 18), and that, in like good faith, it commenced and has carried on business as a building corporation ; and as such the plaint*201iffs in error have dealt with it. "We think, therefore, that they are estopped from denying, in this collateral way, the validity of the certificate. 22 Ohio St. 339.

2. The fact, that a member of such association is permitted to hold in his own right a number of shares greater than the maximum prescribed by the by-laws of the company, but not in excess of the number limited by the statute (act of May 9, 1868, sec. 2), is not a matter of defense, by such member or his guarantors, against any claim which the company may have on account of such shares, whether the claim be for stated dues, interest on loans advanced, or ■fines assessed under the by-laws. What would be the effect, if the number exceeded the statutory limit, we do not consider; but it is clear, that if the association waive the rule of its by-law in this regard, the member violating it has no right to complain; nor has any other person standing in the relation of surety for him, any cause of complaint.

3. There was no error in refusing to hear testimony as to the custom of the association to advance loans to its members, without inquiry as to the use to which the borrowers intended to apply the money. Such testimony was immaterial. These associations are not bound to supervise the application of loans made by them. The statute (sec. 1 of the act of May 9, 1868) contemplates the loan of money by such association among its members and depositors, to be used “ in buying lots or houses, or in building or repairing houses, *or other purposes.”*The borrower may use the money for the payment of debts generally, or in his general business, or for any other lawful purpose. There is no duty imposed upon building associations to inquire as to the iutended use of the loan; therefore, its custom in this regard is of no significance.

4. As to the power of building corporations to impose fines. Such power is conferred by section 2 of the act of May 9, 1868, which provides: “Such corporation shall be authorized and empowered to levy, assess, and collect from its *members*such sums of money, by rates of stated dues, *fines,*interest on loans advanced, and premiums bid by *202members or depositors for the right of precedence in taking loans, *as the corporation by its by-laws may adopt.*By the terms of this statute, fines may be assessed and collected only from *members*of the corporation; but there is no limitation as to the amount or the occasion, except as prescribed in the by-laws adopted by the corporation, -and there is no express limitation on the power of the corporation to adopt by-laws. It is to be regretted that the legislature was not more specific in making the grant of power thus intended to be conferred. It is no wondei’, from the very general terms of the grant, that the courts of the state have been at sea, in their efforts to ascertain and define this power. That there are limits, however, beyond which the corporation, by its by-laws, can not go, is undoubted. 1. The amount of the fine must be reasonable. 2. It can be imposed only by way of punishment for some delinquency in the performance of a duty which the member may owe to the corporation by reason of his membership. 3. It is unreasonable, and therefore we assume that the legislature did not intend, that more than one fine should be imposed for the same delinquency.

The application of these tests can not be resisted on the ground that fines imposed under such'by-laws, must be regarded as conventional between the corporation and the member. The by-laws are adopted by a majority; and the legislature did not intend that the asse,nt of the minority, or of any member of the association, to the imposition of fines, should, in all cases, be conclusively presumed. The true intent was, that the power to assess unreasonable fines, or to assess for any other cause than the delinquency of a corporator, or twice for the same offense, should not exist in the corporation. *,*

If these principles be applied to these associations, we think they may legitimately assess a fine against a member for delinquency in the payment of stated dues. The prompt payment of these dues is a duty which each member owes as a corporator, and in common with all the members. The success of the enterprise, in a large degree, *203depends upon the prompt performance of this duty. Hence, a reasonable fine for default in making payment thereof, is within the power intended to be conferred. But a second fine for the non-payment of the same stated due, is a second punishment for the same offense. It is not a sufficient answer to the last proposition, to say that the non-payment of the same stated due, at a subsequent day, is a new offense. The obligation to pay, when the due first matured, was complete. No *new*obligation to pay it in the future is undertaken by the defaulting member; but the obligation or duty to pay it at maturity continues after default, until payment be made. Nor is it within the power of the corporation to assess and collect a fine for default in payment of interest upon loans advanced. If the loan be advanced to a member, he becomes bound to pay interest by his promise to do so; not’because he is a member of the association, but because he is a borrower, and as such, promises to pay interest on the loan. When money is thus advanced to a member, a new relation arises between him and the company — the relation of debtor and creditor; a relation not common to all the members, or even necessary as between corporation and corporator. It is in the relation of debtor to the corporation, and not as member of it, that he promises to pay interest, but it is only as a *member*of the corporation, and in relation to his conduct as such, that the power to impose a fine upon him exists. This proposition is made manifest, when we consider the fact, that loans are authorized to be made to depositors as well as members. When a depositor takes a loan, he thereby assumes exactly the same relation to the association' as does a member by taking a loan; and it is perfectly clear, that no fine can be assessed against a depositor for default in payment of interest on his loan.

These associations were first authorized by statute in this state in the year 1867; and in the brief period of their existence, they have grown to immense proportions both in number and in wealth. Already they embrace many thousands of members, and control millions of capital. If well *204regulated and managed within legitimate bounds, they are no doubt agencies well adapted to promote the welfare of those for whose benefit they are professedly organized ; but when permitted to range wherever avarice and craft may lead them, they become instruments of oppression and fraud, like unto which there never has been a precedent in the history of this country. Hence, while they must be protected in all their rights, and in the lawful exercise of all their powers, it is very important that they also be denied powers which they do not possess, and restrained from abusing those they have.

5. When a building corporation- advances a loan to a member upon his stock, has it capacity to take from him mortgage security for the payment of such fines as may be lawfully assessed against him in the future ?

The statute of May 9, 1868, section 2, provides that it ■shall have power “to acquire, hold, incumber, and convey all such real estate and personal property as may be legitimately pledged to it on such loans, or may otherwise be transferred to it in the due course of its business.”

Before the loan is advanced, the stock of the member is a security in the hands of the company for the payment of fines. By making the loan, that security is lost; and we see no reason why the taking of mortgage security in such case, for the payment of future fines, should not be regarded as a transaction in the due course of its business. The power to assess and collect a fiue, reasonably implies a power to take security for its payment.

6. Can a building corporation enforce the collection of dues, interest on loans or fines, if the records of the corporation do not show, and it is not otherwise proved, that its by-laws were adopted by a formal vote of its members or directors?

We think it is not necessary to prove the adoption of bylaws by a formal vote of the members or directors. The adoption of by-laws is sufficiently proved by showing that they appear upon the records of the corporation, and have *205been uniformly acted upon and enforced as the by-laws of the corporation.

7. Upon what basis should the account between mortgagee and mortgagor have been stated ?

The condition of defeasance contained in the several mortgages in these actions, was the punctual payment of the stated dues upon the stock on which the loan was advanced, the interest on the loan advanced, taxes and fire-insurance on the mortgaged premises, and all fines and" forfeitures, according to the constitution and by-laws of the mortgagee. In these cases there was no claim made on account of taxes or fire-insurance. It is quite clear that this condition was broken when default was made in the payment of stated dues, interest on loans advanced, and fines assessed, in accordance with proper by-laws — to wit, stated1 dues weekly, interest monthly, and fines when assessed.

It is also stipulated in the mortgages, that upon condition being broken, the whole amount of the par value of the shares of stock upon which each loan was advanced, should' become due, and the mortgage foreclosed.

In these cases, an account upon the basis of the par value-of the stock was not asked for; and it could not have been granted if it had been prayed for. Such a decree would-simply work a forfeiture to the association of the amount of the premium bid for the right of precedence in taking the loan, and would wholly deprive the borrower of all-benefit intended to be secured by it. Nor can the amount of the loan advanced be made the basis of the account.. The policy upon which these organizations are founded, does not contemplate that a loan advanced to a member upon his stock will ever be called in.

"Whenever the assets of the corporation become equal to the par value of all its stock, it ceases to exist, except for the purpose of winding up its affairs; and a member, who has received a loan on his stock, which; together with the - premium bid therefor, equals the par value of this stock, has no interest in the final distribution, unless there be a surplus of assets. The real transaction between the corpo*206ration and such member is equivalent to the redemption of his stock in advance; saving, however, to the member his rights as a corporator, and to the corporation its rights to -collect from him the stated dues, interest on the loan advanced, and such fines as may be lawfully assessed against him. s, Such being the true relation of the parties, and such their reasonable expectations, a court of equity, upon breach of the condition of defeasance, by failure to pay stated dues, interest on loan advanced, or fines assessed, will not state an account on the basis of the loan advanced; but will ascertain the amount of dues, interest, and fines due .and unpaid, and will decree accordingly.

If it be objected that this mode of stating the account, where the parties have agreed upon a different basis, is judicial legislation, we answer, not so. It is simply a case, where a court of equity will not adopt the agreement of the parties as to a rule of. damages, where the agreed rule would make the recovery altogether disproportionate to the loss occasioned by the default, and would produce a result contrary to the evident design of the legislature in ■creating these building associations.

In each of these cases, the finding of the court below in favor of the mortgagee was for a sum greater than 'ivas then due. The record does not disclose the rule for accounting adopted in Hagerman’s case. In argument, we are told it was the rule adopted by the Superior Court of Cincinnati. 1 Cincinnati Superior Court Reporter, 477. The rule of that case was adopted in Mercer’s ease, as appears from the record. By that rule, the amount of stated ■dues and interest which may become due during the future existence of the corporation as estimated, is discounted and added to the amount of dues, interest, and fines for which the mortgagor is already in default. It will be observed, however, that the order made by the Superior Court of •Cincinnati, was upon distribution of the proceeds after sale. Whatever may be the true rale for distributing the proceeds •of a sale in such cases, it is quite clear that in stating an .account, as the basis for an order of sale, no sum. greater *207than the amount actually due should be found. After the account is stated and a sale ordered, the mortgagor has a right to prevent a sale by the payment of the amount found to be due to the mortgagee. Hence, it is error to include in such finding anything more than the amount due at the time of decree.

8. It is sufficient to advertise notice of the time and place of a sale on execution for thirty days before the day of sale. In computing the time, the day of sale is excluded, but the day upon which advertisement was first made, may be included.

Section 597 of the code does not apply in such case. This is not a ease where an act is to be *Aone within &*certain time; the salé takes place after the time for advertising has expired. The time for advertising such sale is determined by the special provisions contained in section 436; and the time therein prescribed may be computed by counting the day on which the notice was first given.

If the notice of sale be given in a daily paper, as prescribed in section 436, it is not necessary that full five weeks, or thirty-five days, should transpire between the first publication and the day of sale. An insertion on the same day of the week, during five successive weeks, is sufficient, where the first insertion was thirty days before the day of sale.

*Judgments reversed.*

Welch, White, Rex, and Gilmore, JJ., concurred.