Case Name: Michael Heslin, Appellant, v. Eastern Building and Loan Association of Syracuse, N. Y., Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1901-05
Citations: 61 A.D. 458
Docket Number: 
Parties: Michael Heslin, Appellant, v. Eastern Building and Loan Association of Syracuse, N. Y., Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 61
Pages: 458–460

Head Matter:
Michael Heslin, Appellant, v. Eastern Building and Loan Association of Syracuse, N. Y., Respondent.
Building and loan association—when its shares mature — the withdrawal value cannot be recovered unless the prescribed notice is given. '
A certificate of stock issued by a building and loan association contained an agreement on the part of the association to pay the shareholder the sum of $100 a share at the end of seventy-eight months, and provided that the agreement to pay was “in consideration of the membership fee, together with agreements and statements contained in the application for membership in the. association, and full compliance with the terms; conditions and by-laws printed on the front and back of this certificate, which are hereby referred to and made a part of this contract.” It also provided that the shareholder should pay to the association a monthly installment of , seventy-five cents on each share “ until such share matures or is withdrawn.” The by-laws printed upon the certificate of stock showed that the shares would hot mature until the association received or earned sufficient to pay the sum of $100 per share,
jHeld, that the agreement on the part of the association to pay the par value of the shares at the end of seventy-eight months should be understood to be conditional upon the assumption that the receipts and profits would mature the stock by that time.
It seems, that such an association has no power to issue a certificate having a.fixed period of maturity.
Where an action is brought by the shareholder at the end of seventy-eight months to recover the par value of the shares, and it appears that the receipts and profits of the association are not sufficient to mature the stock at that time, the plaintiff is not entitled to recover the withdrawal value of his stock unless he has complied with the requirements of the association as to the giving of notice, etc., made a preliminary to such payment.
Appeal by the plaintiff, Michael Heslin, from a judgment of the Supreme Court in favor of . the defendant, entered in the office of the clerk of the county of Kings on the 5th day of September, 1899, upon the decision of the court rendered after a trial at the Kings County Trial Term before the court without a jury.
John J. O' Cornell \Henry J. Furlong with him on the brief], for the appellant.
Chester M. FlUott, for the respondent.

Opinion:
Hirschberg, J.:
The plaintiff sues to recover the sum of $1,000, the par value of ten shares of the stock of the defendant, a building and loan asso elation, incorporated pursuant to chapter 122 of the Laws of 1851. He received his certificate as a shareholder September 1, 1891, by the terms of which the defendant agreed to pay him at the end of seventy-eight months from that date the sum of $100 for each of said shares. The certificate, however, provided that this agreement to pay was " in consideration of the membership fee, together with agreements and statements contained in the application for membership in the association, and full compliance with the terms, conditions and by-laws printed on the front and back of this certificate which are hereby referred to and made a part of this contract." By the terms and conditions of the certificate the plaintiff agreed to pay to the defendant a monthly installment of seventy-five cents on each of the ten shares " until such share matures or is withdrawn." By the by-laws printed on the certificate it is made plain that the resources of the corporation áre chiefly the membership fees, monthly installments, fines and interest or premiums; that the par value of the stock is $100 per share, and that such shares do not reach maturity until the association has received or earned sufficient money to pay that sum. By section 21 of article XIY of the by-laws it is expressly agreed " between all shareholders and this association that a payment of one hundred dollars per share, named in their certificate, that has been in force till maturity, shall be accepted as full payment of all claims on their certificate or against this association." It is to be observed that the engagement on the part of the plaintiff to pay the monthly installments is not limited to the period of seventy-eight months, but is to continue until the stock matures, and it would seem to follow necessarily that the agreement on the part of the association to pay the full value at the end of the seventy-eight months must be understood as conditional, upon the assumption that the receipts and profits would mature the stock by that time. In fact, the book value of the plaintiff's ten shares at the time of the trial was only $629.47, and the learned trial justice dismissed the complaint upon the theory that the seventy-eight installments constituted an estimation only, which had proved too few.
The same point was decided in O'Malley v. Peoples Building Assn. (92 Hun, 572). It was there held that such an association as the defendant has no power to issue a certificate having a fixed period of maturity, and that any time of maturity specified should be considered to be an estimated time. It is evident that the adop^ ,tian of the plaintiff's theory would lead to speedy bankruptcy. The defendant, aside from possible investments, has no income or means of income other than the interest and premiums paid by. borrowing members and the fees, installments and fines paid by other shareholders, and it is unreasonable to suppose that its earnings would permit it to pay the enormous interest which would be involved in a return of $1,000. for the sum of less .than $600 which it has received from the plaintiff. As the certificate does not upon its face purport to mature the stock irrespective of the earnings at the end of the estimated period by providing that the payment of the installments should then cease, and as such a provision would be clearly in violation of the defendant's trust duties, and the rights and interests of the other shareholders, the more reasonable construction is approved which was adopted by the court below, and sanctioned by the authority cited.
The judgment, however, cannot be modified as suggested by the appellant so as to entitle him to the withdrawal value of his stock, as was done in O'Malley v. People's Building Assn. (supra). The defendant is entitled to require notice of withdrawal, and the filing of the certificate at its home office, as preliminaries to such payment, and there is not only no claim or proof of the service of a notice of withdrawal, but on the contrary it is stipulated in the agreed statement of facts submitted-on the trial, that the plaintiff's certificate was " never filed with the defendant association for withdrawal," and was " never presented at the home office in Syracuse for payment oi- withdrawal."
The judgment should be affirmed.
All concurred.
Judgment affirmed, with costs.