The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1901-07-26
COMPANY ILLEGAL
ATTORNEY GENERAL ADVISES CLOS
ING OF HOME REALTY CONCERN.
Airs Its Method of Doing Business in
Opinion Given to state
Auditor.

AtlllS ol III report OF ne lHNtoNA6oNiVA
of the affairs OF the Home Realty Com
pany, Of this city, made by Auditor OF state
Hart. Attorney General Taylor yesterday
rendered an opinion in which he holds hat
the company has no authority whatever TO
do business in Indiana under the plan
which it is pursuing, and its affairs ought
to be wound up at once. The company"
said Mr.. Taylor, 'is unauthorized by law,
unsafe and contrary to public safety"
The investigation of the company was
made by George U. Bingham, expert in the
auditor of states office. His report shows
that of the $4,000 capital stock advertised
by the company. only si76.O7 has been paid
in. The total assets of the company are
but S~l,S62.37. The company has l55 contracts
in force, aggregating $lS5. 100.
Much Of the money which the contract
holders have paid into the company has
gone TO pay its expenses. In his report to
Attorney General Taylor Mr.. Bingham
says the question to be determined in refer
ence to the company is whether it has au-
thority, under it's incorporation. to conduct
the character of business in which 1t is en-
gagged. In respOnse to this question Mr..
Taylor has prepared the following opinion;
Il am this day in receipt OF the report or
your examination, as heretofore requested
DIV me-, OF the Home Realty 0OHIpdIS n
corporation of indianapolis, Ind. l am also
in receipt of your inquiry respecting the
right of this concern and kindred concerns
to do the kind of business 1t is doing IN
Indiana.
THE SCHEME DESCRIBED.
This company is modelled after the origi-
nal Fraternal Cooperative Association
for which l asked and obtained a receiver,
and whose affairs are now being wound up
by the Superior Court of this county; also,
the Indiana Real Estate Company, which
has also been forced 10 quit business; also
the Home Cooperative Company, of Lima,
o., and several other kindred concerns
which have been forced 10 quit business In
this State. From the contract and lltera-
ture of the Home Realty Company / find
the following facts:
Il. The member pays 80 cents per month
on each 800 of stock into the benefit fund,
20 per cent. OF which is at once taken out
by the managers of this concern for their
own use. The balance goes 10 the credit Of
-. The contract of each member is num-
central idea in the contract is that when
there have been sufficient funds collected
with which to buy a piece of real estate,
that then the members, in consecutive
order, and In the order of their membership,
are to have a piece of real estate bought
by the company for the member. There is,
therefore, no limit of time fixed wherein
the member will be entitled To a piece of
property short OF 13S months. or nearly IL
years.
20. After the member has had a piece
of property bought for him, then he pays
SO cents a month on each 800 of Investment
10 be made for him., out or which the con-
Germ takes 10 per cent. as expense fund
and turns the balance over to the so-calleo
benefit fund. Since the concern takes out
20 per cent. before purchasing property and
10 per cent. after purchasing property, IL
is to the advantage of the company TO
delay buying property for the member as
long as possible.
II. The member agrees that the monthly
payments advanced by him can be used by
the company for purchasing homes for 9TH
err members whose contracts are older than
the members contract, so th9t whenever
the company ceases business, no matter
when that may be, all members who have
not had property purchased for them OF
necessity lose everything they have put
into the concern, and have no remedies
They have taken their chance and have
lost.
AN ILLEGAL CONCERN.
SO. The company agrees TO pay back, on
sixty days notice, in four monthly Install
ments, whatever money is held by the
company to the members credit; but this
is qualified by a provision that if the men,
Der becomes delinquent at any time before
the company reaches the number of his
contract, which Of necessity is altogether
uncertain, then the company will carry the
members contract for as many months as
he has already paid, provided that the
member at the end OF such time pays up
all back payments. This is before the
property is purchased. After the property
has been purchased for the member. then
his delinquency may extend over a period
of thirty days. at which time he must pay
all back payments in monthly installments.
This concern was organized pursuant TO
the voluntary association act. which allows
the organization of companies to buy and
sell real estate. That law never contem-
plated the operation of any such concern
as this. This is a combination of building
association and tontine investment com
pany; 1t is neither wholly one nor the
other. / am. therefore,. of o%pinion:
II. That 1t has no authority whatever
TO do business in Indiana, under the plan II
is attempting TO do II. and ought to be
stopped at once.
"2. That II has no right to use the mails
for exploiting its business, nor has any
other concern Of like character. This is
the only cncern l know of now doing bust
ness In this State under the old fraternal
cooperative scheme.
30. II is unauthorized by law, unsafe and
contrary TO public policy.
Il. 1t is establishing and maintaining an
expense fund under the guise OF a retainer
fee for the exclusive use and benefit of Its
officers.
20. 1t exacts forfeitures, contrary to law
and public policy.
sc. 1t does not sell real estate, but, by a
peculiar method of operation, merely dis
tributes 1t among certain classes OF mem
bers.
az. That this concern has forfeited its
right 10 exist as a corporation and ought
to be wound up"