Court Opinion

ID: 6423121
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:01:39.163436+00
Date Added: 2024-06-11T15:51:51.829390
License: Public Domain

Holmes, J.
It appears from the answers of the corporation summoned as trustee, that it was organized and does business under the Pub. Sts. c. 117 ; St. 1882, c. 251; St. 1883, c. 98; St. 1885, c. 121; St. 1887, c. 216; that the defendant is a member and holder of nine shares in it, upon which she has paid as dues sixty-three dollars, and that the withdrawal value of the shares is sixty-two dollars and sixty-six cents. The question is whether this sum can be reached by trustee process, or whether the shares can be attached only in the mode provided by the Pub. Sts. c. 161, §§ 71-73, for attaching the shares of a stockholder in a corporation.
If the latter method had been resorted to, it might be argued, no doubt, that as the defendant is a member of the corporation, *169and as the statute calls her interest “shares,” she is brought expressly within the words of c. 161, §§ 71-73, providing how her shares may be attached. We express no opinion upon that question. But the interest of the member of a corporation of this kind is of a peculiar nature. And it does not follow, because the defendant is a member, that she. may not be a creditor also in respect of her money paid in, subject to any lawful deductions incurred under the statute. See, e. g., Williams v. Parker, 136 Mass. 204.
Co-operative institutions like the one before us seem first to have appeared as voluntary unincorporated associations. St. 1854, c. 454, § 5. Merrill v. McIntire, 13 Gray, 157. Baxter v. McIntire, 13 Gray, 168. Delano v. Wild, 6 Allen, 1. The incorporation of them simply facilitates carrying out the purposes for which they are formed: on the one hand, of advancing the funds contributed by the members to such of them as make the best offers; and on the other, of dividing the profits, if any, among the shares. In the latter aspect these corporations resemble savings banks, and have been made more and more like them by legislation. They stand in the same relation to the commissioners of savings banks. Pub. Sts. c. 117, § 20. They are subject to similar restrictions as to land purchased by them on foreclosure. § 19. They are required to reserve a guaranty fund from net profits. St. 1885, c. 121. See Pub. Sts. c. 116, § 24. Since the St. of 1883, c. 98, they are called banks. The so called shares are represented, not by certificates of stock, but by entries in a pass-book. Pub. Sts. c. 117, § 17. And the value of them is determined by the amount paid in, plus profits and less fines and losses. When the shares reach the ultimate value of two hundred dollars, they are not to be kept as full paid shares, but are to be paid off. Pub. Sts. c. 117, §§ 7, 9.
By the St. of 1887, c. 216, § 2, (Pub. Sts. c. 117, § 8,) “ A member may withdraw his unpledged shares at any time by giving thirty days’ notice.” That is to say, the member has a right to demand back the money he has paid to the corporation, together with any profits which may have accrued, deducting fines and his share of losses, and this right is one of the terms on which he paid. At the same time, he has no claim to a specific fund. The money which he pays in becomes the money of the *170corporation, as in the case of a banker, and in this case the trustee states that it has used the money paid by the defendant as its own. So far, the relation between the corporation and the defendant is that of debtor and creditor, or at least constitutes a contractual or quasi contractual obligation to pay money, by whatever name it may be called in the statute. See Burt v. Rattle, 31 Ohio St. 116, 130; Totten v. Tison, 54 Ga. 139. The fact that the defendant had not given the required notice does not affect the question. Clapp v. Hancock Bank, 1 Allen, 394.
It is true that no more than one half of the funds in the treasury are applicable to the demands of withdrawing members without the consent of the directors. But it is equally true that the liability of a mutual insurance company for a loss is confined to a specific and limited fund. Commonwealth v. Massachusetts Ins. Co. 112 Mass. 116, 121. So is that of a savings bank. So, indeed, in a sense, is that of every corporation ; since a corporation has no body which can be taken on execution. It would not be argued that a mutual insurance company or a savings bank could not be trusteed. Pub. Sts. c. 183, § 33. The trustee does not allege in its answer that the funds are insufficient in fact.
By the statute of 1887 there are to be deducted from the amount standing to the credit of the shares to be withdrawn all fines, and a proportionate part of any unadjusted loss, together with such proportion of the profit previously credited to the shares as the by-laws may provide. But these sums are all capable of ascertainment, and are ascertained by the trustee’s answer. The statute provides that the shareholder “ shall be paid the balance” thus ascertained. We are of opinion that the shai’eholder’s right to this balance is a credit, or that the balance is “money due the defendant” subject to be taken by trustee process. Pub. Sts. c. 183, §§ 21, 25. See Gray v. Bennett, 3 Met. 522, 526.

Trustee charged.