The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-07-22
APPOINTS NO RECEIVER
PETITION IN EQUITABLE II. AND l..
CASE DENIED BY THE COURT.
state Auditor and Attorney General
Proper Officials to First Proceed
in Affairs of This Kind.

In the suit of Robert e. Roberts against
the Equitable Building and Loan Associa-
ton, Judge McMaster, of the Superior
Court, has declined to appoint Il receiver.
Roberts was the owner of ten shares of
stock in the association. He had paid about
$500 on the stock when he gave the usual
notice of his purpose to withdraw. After
waiting ninety days he had not received
his money, but instead received a notice
to the effect that he was indebted to the
association for back dues He was told
after another three months that there was
not sufficient money to pay him in his
turn owing to numerous applications to
withdraw. He then brought suit for a re-
ceiver, alleging Insolvency.
There was a contention on the part of the
attorneys for the company that the plain
tiff had no standing in court; that the
auditor of state was the proper official to
investigate the company's affairs, and that
the attorney general of the state alone
could make the application for a receiver.
On this point the court says
I'm view of the broad visitorial and SUI
peTVisOry powers thus vested in the audi
tor of Statelhy the act, there is much force
in the contention on the part of the defend
ant that such auditor is the proper person
TO institute proceedings or have the same
purpose of winding up the affairs OF such
associations, and that this power to act
is exclusive, and that a member or a stock
holder of the association has no standing
in court at least, until such auditor shall
have refused to act and it is shown to the
court that there has been such REFUSAL and
that such nonaction is injuriOusly affecting
the property rights of such member or
stockholder."
THE IA PER CENT. ASSESSMENT.
On the question of the alleged illegal as
sessment of IA per cent. levied by the asso-
citation last May, the court holds:
ION the 9Th day of May, 1897, the defend
ant association, by its board OF directors,
made an assessment of Il per cent. upon
the payments on account of capital stock
and the earnings thereon, standing to the
credit of its members, TO make up losses
caused principally by depreciation In the
value of real estate held by the asSocia-
ton as a result OF foreclosures, and the
acceptance of conveyanCes from members
in payment of their indebtedness to the
association. If this assessment was valid
the proofs show that the association has
assets in excess Of its liabilities, and is
solvent. But 1t is contended by the PLAIN
tiff that this assessment, amounting i'll
round numbers TO $4,000 was illegal and
void, and that because of this the associa-
ton is still insolvent. This contention
is based on the claim that SUCH assessment
to be legal, must be based on the face or
par value Of the stock, and not upon the
amount paid in on such stock The right
to make assessments to cover losses is a
right expressly given by statute Wohl-
field VS.. Citizens, etc, association, 140 Ind,
Co., Nor do l find anything in the bylaws
of the defendant which. in my Judgment
precludes it from making such assessment.
The question then is, was the method
adopted by it a legal method? As such
associations were organized and conducted
in their earlier history the question Wheth-
er the assessment was made on the face
or par value of the stock, or on the amount
paid in as installments on the earnings
thereon would have little significance, as
the shares of stock We're all made TO run
from the beginning of the association, and
the shares not Withdrawn all matured at
the same time and the association was then
wound up. In such case each share would
have TO its credit at any given time, a
like amount, and il could make no possible
difference except in the rate per cent. of
the assessment whether it was made on
the par value of the stock or on the amount
paid in to the credit of each share, as either
method would produce the same result.
But in an association which IS continuous
and in which subscriptions to stock can
be made at any time, the payment of in
stallments or dues commencing from the
time Of the subscription. l can see no
equitable or just method of making assess
ments on the stock. except upon the
amount paid in and standing TO the credit
of the members on their shares. The
amounts SO credited form the basis upon
which dividends are declared, and l can