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such stock such sum or sums in equal periodical installments, exclusive of any expense fund or other deductions which are authorized by the articles of the association or the by-laws, as will, when taken together with the dividend hereinbefore mentioned, equal the matured value thereof at the end of the maximum period during which payment upon such stock may be required. In consideration of such fixed rate of dividend as above provided, the borrowing member shall waive his right to full participation in the profits of such association. Out of the profits, if any, which remain after paying the expenses of said association and apportioning to the borrowing member the fixed rate agreed upon in the contract with him, there shall be apportioned to the installment stock such rate of dividends as may be determined by the board of directors, and if such rate so determined and apportioned shall exceed the rate apportioned to the stock of the borrowing members, there shall also then be apportioned to the stock of said borrowing members an additional profit, which shall amount to one-half of the difference between the rate first apportioned to such borrowing members' stock and the roll apportioned to the installment stock, and the other half of said difference shall be credited to and shall constitute a permanent contingent fund for the payment of losses lawfully chargeable to the profit and loss account of such association, and for no other purpose; and in consideration of such contribution to the contingent fund, such stock shall, as between the members of the association issuing it, be exempt from any further charges or assessments for losses. sustained, incurred or paid by such association. When the borrowing member shall have made all the payments required under his contract with the corporation and its articles of association or by-laws, the association shall, unless the shares of stock held by him shall have sooner matured, in consideration of the amount standing to the credit of such stock upon its books, and his agreement to contribute to the contingent fund of the corporation, a portion of the profits to which he otherwise might have been entitled, as hereinbefore provided, accept the amount standing to his credit upon the books of the association, and the sums so contributed, in full satisfaction of the loan or advance made to him; and the shares so issued shall be cancelled and proper surrenders and acquittances be made. (As amended by chap. 705 of 1894 and chap. 704 of 1899).

§ 179. Security for loans. For every loan made, except as

Building and Mutual Loan Corporations.

§ 179

m'd 1901

C. 378

hereinafter provided in this section, a bond secured by a first mortgage on real estate or a second mortgage, when the first mortgage was given to and is held by the association, or when said second mortgage is given in a sum sufficient to cover any first mortgage that may be a lien on the property in addition to the sum advanced by the association, shall be given, accompanied by a transfer and pledge to the association of the shares borrowed upon and all accumulations that have or shall accrue thereon, as collateral security for the repayment of the loan; or, in lieu of the mortgage, the borrower, or another, may transfer and pledge to the association for the payment of the loan, free shares, the withdrawal value of which under the by-laws at the time of such borrowing, shall exceed the amount borrowed and interest thereon for six months, and all fines that could accrue in case the borrower should default in the payment of the dues upon the shares borrowed upon, but an association may provide by its by-laws that it will not make stock loans. If the borrower neglects to offer security satisfactory to the board of directors, within the time provided by the by-laws, his right to the loan shall be forfeited, and he shall be charged with interest and premium, if any, for one month, and all necessary expenses incurred, if any, under the by-laws in reference to the proposed loan. All bonds and mortgages given to the association shall be deemed conditioned upon the performance of the provisions of this act relating to the payment of loans, premiums, interest and fines thereon, and the by-laws of the association, although the same may not be fully expressed therein. A borrower may repay a loan, and all arrears of interest, premium, if any, and fines thereon (or one or more shares thereof), at any stated meeting or at any time (but the by-laws may otherwise provide); when not made at a stated meeting, he shall pay interest up to the first stated meeting after such payment, or he may, by a proper notice, and direction as to the application, have the withdrawal or holding value of the shares borrowed upon, applied in payment or part payment, as the by-laws shall determine. Should there at any time be money in the treasury not called for by the borrowing or withdrawing members, the board of directors may make temporary loans to members out of the same, at such rate of interest not exceeding six per centum, and under such provisions and restrictions as the by-laws may prescribe. Such temporary loans shall not run more than ninety days and shall be secured

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by the personal note of the borrower, and also by a pledge of shares to the association, the withdrawal value of which shares shall be at least ten per centum more than the amount of the loan and the interest thereon to its maturity. If at any time there is money in the treasury as above in excess of the amount needed to meet the demand for such temporary loans, it may be invested in the same kind of securities and under the same restrictions as allowed to savings banks by section one hundred and sixteen of this chapter. (As amended by chap. 705 of 1894, chap. 452 of 1896, § 4.)

180. Arrearages; forfeitures; withdrawal values.-Whenever any member shall be six months in arrears in the payment of his dues upon free shares, the secretary shall give him notice thereof in writing, and a statement of his arrearages by mailing the same to him at the last post-office address given by him to the association, and if he shall not pay the same within two months thereafter, the board of directors may, at their option, declare his shares forfeited; and at the time of such forfeiture the withdrawal value thereof shall be determined and stated, and the defaulting member shall be entitled to withdraw the same without interest within one year upon such notice as shall be required of a withdrawing shareholder, and upon failure to so withdraw the same, then, and in that case, it may revert to the association. (As amended by chap. 705 of 1894.)

§ 181. Loans due when members in arrears.-Whenever a borrowing shareholder shall be in arrears in the payment of his dues, interest or premium two months, the whole loan shall become due at the option of the board of directors, and they may proceed to enforce collection upon the securities held by the association. The withdrawal value at the time of the commencement of the action of all shares pledged as collateral security for the loan, shall be applied upon the loan and arrearages of interest, premiums and fines thereon, and the shares deemed surrendered to the association. (As amended by chap. 705 of 1894.)

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182. Purchase of property at sale.-Any association may purchase at any sale public or judgment-lien or other incumbrance, or in which it may have an interest; and may sell, convey, lease or mortgage the same at pleasure to any person or persons; it may also hold and own real estate for the purpose of

*So in the original.

Building and Mutual Loan Corporations.

S$ 183-186

occupying the same with its own business office. (As amended by chap. 705 of 1894.)

§ 183. Association may borrow to pay withdrawals.—Any association organized in pursuance of the provisions of this act may borrow money for the purpose of making loans or paying withdrawals, not exceeding, however, two thousand dollars, so long as its accumulated capital shall not exceed twenty thousand dollars, and when its accumulated capital exceeds that sum, not exceeding ten per cent thereof. No money borrowed shall be for a longer term than one year. Any association having a surplus in its treasury for which there is no demands for loans, withdrawing stockholders, matured or paid-up stock, may loan the same to another association, organized under the provisions of this act, subject to the provisions of this section, on the part of the borrowing association. No association shall borrow or make loans in this section authorized, except by a majority vote of all the members of its board of directors, the vote to be recorded by ayes and nays in its regular minutes. (As amended by chap. 705 of 1894.)

184. Profits and losses; undivided profits.-Profits and losses shall be ascertained at least annually, and shall be distributed to all shares outstanding at such time of distribution, in the manner provided by the by-laws of the association. At each periodical distribution of profits the board of directors may reserve and carry as undivided profits in the nature of a contingent fund, any sum from the net profits that in their discretion seems wise. (As amended by chap. 705 of 1894.)

§ 185. Transfer of shares.-No transfer of shares shall be binding upon the association until the same have been made upon the books of the association; and the transferring thereof shall take the same charged with all the liabilities and conditions attaching thereto in the hands of the one transferring the same. The association may require a "transfer fee," not exceeding twenty-five cents per share, or in lieu thereof a total fee not exceeding one dollar on each transfer. (As amended by chap. 705 of 1894.)

186. Attorney; auditors; amendments to by-laws; right to vote. The board of directors shall have the power to appoint and remove, at pleasure, an attorney-at-law for the association. The by-laws of the association may provide for the election of auditors and prescribe their duties and compensation, and shall

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provide in what manner the by-laws themselves may be amended. At the time of the adoption of by-laws on the formation of an association, only those members who have joined in the certificate. of incorporation are entitled to vote, and each incorporator shall have only one vote. (As amended by chap. 705 of 1894.)

§ 187. Eligibility to membership.-Any person of full age and sound mind may become a member of the association by taking one or more shares therein and subscribing to the by-laws, and annexing to his signature his post-office address; and whenever he desires his post-office address changed he shall give written notice thereof to the secretary of the association; and for the purpose of giving any member notice, by mail, the last post-office address given by him shall be deemed the proper one. A minor may hold shares in the name of the parent, guardian or next friend, as trustee for him, but the association shall not be responsible to said infant for any moneys received by said trustees on account of said shares from the association. All accumulations upon shares in said association held by any person shall be exempt from execution and proceedings supplementary thereto to the amount of six hundred dollars; and the association itself shall be deemed an institution for savings, and not taxable under any tax law which shall exempt savings banks or institutions for savings from taxation, and shall not be subject to the provisions of chapter one hundred and forty-three of the laws of eighteen hundred and eighty-six, nor shall any law passed hereafter, taxing corporations in any form, be deemed to include associations. formed under this act, unless they are specifically named in such law. (As amended by chap. 705 of 1894.)

§ 188. Annual reports to be made to the department.-Every association organized under the provisions of this act or under the provisions of chapter one hundred and twenty-two of the laws of eighteen hundred and fifty-one and the acts amendatory thereof, or under chapter five hundred and fifty-six of the laws of eighteen hundred and eighty-seven, or under articles five and six of chapter six hundred and eighty-nine of the laws of eighteen hundred and ninety-two, shall, annually, on or before the thirtieth day of January, make a full report in writing of the affairs and condition of such corporation on the thirty-first day of December of the next preceding year to the superintendent of banks, in such form and by such officers of the corporation as the said superintendent may designate. Every payment made to an

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