Court Opinion

ID: 6967665
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:56:47.490364+00
Date Added: 2024-06-11T16:08:40.779263
License: Public Domain

Mr. Chief Justice Phillips delivered the opinion of the court: The only questions necessary to be considered in the determination of the issues in this case are, whether there was such a cancellation of the stock of appellee in this association as amounted to a bar of his right to recover the money before then paid,—a withdrawal of his membership from the association so that all payments of dues thereafter were unauthorized; and also whether or not the purchase by him from the secretary of this building association of stock presented by another party for cancellation gave him the right or title thereto. In our view of the case the master in chancery, the ‘ circuit court and the Appellate Court have all - reached the correct conclusions. The record in this case shows that the twenty shares of stock held by appellee were presented for cancellation at one time, but in fact never were canceled. The by-laws of appellant provide as follows: “All members desiring to Withdraw from the association, as provided by section 6 of the act under which this association is organized, shall be entitled to receive the amount of dues paid by them, less all fines and other charges, and also receive such shares of the profits then accrued as the board of directors may from time to time determine: Provided, that no member withdrawing from the association within one year after having joined the same shall be entitled to any interest or profits.” Appellee did not receive, after the presentation of his stock, all dues paid by him, together with any portion of the profits then accrued, but before any cancellation of his stock was made he notified the association, through its proper officer, the secreta^, that he would not withdraw. He had a perfect right to do this at any time before the cancellation was actually consummated. The mere facts that about that time a fraudulent secretary caused a warrant to be drawn to appellee’s order for the withdrawal value of this stock, and without procuring the indorsement of appellee was able to induce this association to cash the warrant, were not such facts as operated to cancel appellee’s stock. Common knowledge of the general conduct and management of associations known as building associations shows that in the majority of cases the secretary of such an association has largely the control of the details of its business. He generally possesses the confidence of its members and patrons, who largely rely on him. Many such associations, under our statute, transact a financial business far in excess of the ordinary bank. Its directors should certainly be held to an ordinary degree of diligence and watchfulness over the interests of the association and over those who handle its funds. There having been no withdrawal or cancellation of this stock, it follows that all payments of dues made to an officer of the association authorized to receive them created an additional liability from the appellant association to appellee. The fact that the secretary of this association, either fraudulently or otherwise, did not report the collection of these monthly payments of dues to the association does not release the association. As long as he was secretary he was, under the by-laws, the proper officer to receive such payments, and -payment to him was to the association. It is contended that appellee acquired no title to the Marco stock. The Marco stock was not canceled, as the warrant for such purpose was never delivered to Marco nor did he indorse it. It was a fraud on the part of the secretary to appropriate the amount of the warrant to himself. Appellee issued his check for the stock, and the proper representative of the appellant association, who also acted for Marco, received.it and assigned the passbook to appellee, who continued to make payments on this stock. In this association, as in many others of like class, great confidence seems to have been reposed in the secretary previous to his default. Endlich, in his work on Building Associations, (par. 174,) says that the secretary is often the general agent of the association, and often is, in point of fact, the manager of its entire business. Where such control and management are vested in him, even tacitly, the association will be bound by his acts under such extended authority. Complaint is made that the decree of the Superior Court ordered execution against the association, when the statute provides that only one-half the funds in the treasury shall be applicable to the demands of withdrawing stockholders. There is no merit in this objection. Appellant denied that appellee was a member of its association or had any right to withdraw. After the decree appellee stood in the relation of a creditor, rather than a withdrawing member. The judgment of the Appellate Court for the First District is affirmed. Judgment affirmed.