The semi-weekly messenger. [volume] (Wilmington, N.C.) 1897-1908, 1897-10-15
All DECISION

JsA-se Aliens Decision Relative to tho
Carolina Interstate Building and Loan
Association-He Holds that the Borrow.
ing Members are Liable for Their Pro.
portion Of the Expenses and Losses
In the case of IredeIl Meares and p.
y. Manning, receivers of the Carolina
Interstate Building and Loan Asso-
citation, against Davis & Zoeller, Judge
0. H. Allen, at the last term of the su-
after hearing the argument, rendered
Z very important decision that VIII be
of interest to many readers.
There has been a contest between
the stockholders Of this association as
to whether the borrowing member
should pay his proportionate share of
the losses and the expenses OF winding
up the trust. The supreme court, pre-
vious to Judge Aliens decision, had
laid down in general terms a basis for
the adjustment Of the relative interest
Of stockholders and borrowers, but
there was some difference of construc-
ton as to the decision. The supreme
court said that every one who held
stock in the concern on the day of the
insolvency., whether as a borrowing or
non-borrowing member, was a corpor-
ator and should remain so until the
concern was closed up and would be
subject to the burdens and entitled to
the benefits according to the amoun
Of his stock.
After much argument in the court
below, Judge Coble finally approved Of
a plan Of settlement which was submit
ted by the receivers, whereby the re-
ceivers credited the borrowing members
on their mortgage with all hat they
might have paid in, with interest, but
charged against their stock their pro
rata share of losses and expenses sus-
tanned. The effect of this plan Of set
Element made every stakeholder,
whether borrower or n~On-borrower,
bear equally his pro rata share Of the
loss. Judge Coble, in approving the
! settlement, did so without prejudice to
anybody, wishing to contest the plan
of settlement.
| In the case first mentioned above.
the property of the defendants was
/ 1OIeClOSCu. LIE ucDI " lie IeCelFeIS,
according to the plan of settlement,
was paid, but under agreement of coun-
sci, the defendants were allowed to
raise the question as to the right Of
the receivers to retain a propOrtionate
part of the money paid in by the de-
PENDANTS to cover their share Of the
losses. The question came before
.Judpe Allen on n%etition Of d~afen6an
to have returned the per cent. of loss
held by the receivers. It was contend
ed by the defendants that they were
entitled to a credit for everything paid
in on their stock, including fines, in
terest n dues, n that they should
be charged only with the principal of
the debt and interest. It was further
contended hat if they were liable as a
s~tockhOlder, h a the only remedy of
the receivers would be to bring action
against them as stockholders and get
judgment, but in settling their loan
they were entitled to have their &C
count stated exactly as if they were a
mere debtor to the association, without
regard to their position as stockhold-
ers.
His honor decided that being stock
holders they were liable to their pro-
~portionate part Of the expenses, and
that as the plan of settlement hereto
fore approved only provided for their
being charged with such proportion, he
approved the order previously made by
Judge Coble n decided the question
in favor Of the receivers and in favor
Of the plan Of settlement outlined
above.
John D. Bellamy, Esq, appeared for
the defendants, while Messrs. E.. S.
Martin and Ricaud & Bryan appeared
for the receivers.