fied time. Under the complainant's theory, he obtained his loan for over four years at about 6 per cent. per annum. I am unable to see how this is possible under the scheme authorized by the law. It would be impossible for these associations to exist by simply loaning money at 6 per cent., or by authorizing members to withdraw upon the basis of the representations now claimed. This association had just been formed when the complainant became a member. As Mr. Walton testified, they were all "green at the business." If complainant may rely upon the statements of Walton, which in fact were only his construction of the by-laws, all the other members may do likewise, if Mr. Walton so informed them. The result would be the ruin of the association.

The complainant was a lawyer of experience and ability, living in the same place with Walton. The organization of the association had just been completed. Walton acted honestly. The by-laws were at complainant's disposal to examine if he chose, but he preferred to rely upon the construction placed upon them by a layman. He continued a member of the association for over four years, receiving its benefits, and acting in accordance with its charter and by-laws. The injustice to other members of the defendant in now permitting him to withdraw, not in accordance with the charter and by-laws as they are, but as Mr. Walton, nearly five years before, explained them to him, is manifest. I think his discovery that the bylaws were not as represented came too late. Ogilvie v. Insurance Co., 22 How. 391.

One author says:

"While by-laws are not always binding upon strangers, a person who becomes a member of an association or company after the adoption of a by-law is not considered a stranger, and by joining the organization he is deemed to accord his assent thereto, and to be thereafter bound by

the obligations which it may impose upon the members." Beach, Priv. Corp. § 321.

Another author, after stating the essentials of valid bylaws, says:

"Where these features are found, and the by-law has been properly passed, every member's consent is conclusively presumed, and his submission required." End. Bldg. Ass'ns, § 271; Bac. Ben. Soc. § 81, and note.

In Upton v. Tribilcock, 91 U. S. 45, 50, the defense was that a subscription to the stock of a company was obtained by the fraudulent representation of the agent that the stock was in part non-assessable. It was there said:

*

"That the defendant did not read the charter and bylaws, if such were the fact, was his own fault. That a stockholder may relieve himself from his liability by proof that he was misinformed as to the effect of his contract when he made it would be a disastrous doctrine. That a defendant who could not, by contract, lawfully relieve himself from liability as a stockholder, can accomplish that result by proof that it was fraudulently represented to him that he could so relieve himself, would be strange indeed."

I do not wish to be understood as saying that there are not cases in which a stockholder will be entitled to relief against a corporation for false and fraudulent representations in selling the stock to him. Such was the case of Railway Co. v. Kisch, L. R. 2 H. L. 99. In that case a prospectus was issued by the directors of the company, containing false and fraudulent representations in regard to its capital, upon the faith of which the defendant agreed to purchase some of its stock. But no such state of facts exists in the present case. The whole difficulty arises upon the honest, but mistaken, construction of the bylaws placed upon them by the secretary of the company to one who applied for membership almost at the inception

of the organization. It is not a rule of universal application that a party is entitled to rely upon the representations of another. When the complainant applied for membership he was bound to take notice of the charter and by-laws of the defendant. Came v. Brigham, 39 Me. 38; Cummings v. Webster, 43 Id. 192. When one has the means of knowledge at his disposal when becoming a member of associations like that of the defendant, and chooses to rely upon the statement of an officer of the company as to the effect of the by-laws, he does so at his peril, and should not, years after, be heard to say that the officer misrepresented them.

I think the decree should be affirmed.

HOOKER, J., concurred with GRANT, J.

103 239 103 533

103 239

127 578

MARIE ROSE DE MEY AND EDWARD B. BAGARD V. PETER 103 239

B. DEFER.

Bankruptcy-Deed from assignee-Bona fide purchaser-Mortgage foreclosure-Redemption—Improvements-Rents and profits.

1. A deed from an assignee in bankruptcy, which on its face purports to convey only the "right, title, and interest" of the bankrupt, vests in the grantee the title to the land subject to all of the equities with which it was chargeable in the bankrupt's hands.

2. A married woman mortgaged her land to secure her husband's debt. After her death, by agreement with her husband, the mortgage was foreclosed at law, and on the sale the land was bid in by a third party for the amount due on the mortgage and the expenses of foreclosure. The purchaser paid part of the purchase price by executing to the mortgagee a new mortgage for the principal sum secured by the old mortgage, and the remainder was paid by the husband of the mortgagor.

S61NW 524

The purchaser then mortgaged the land to secure the claim of one of his creditors. He was afterwards adjudicated a bankrupt, and the creditor acquired by purchase from the assignee all of the interest of the bankrupt in the mortgaged premises, after which he paid the first mortgage and discharged his own mortgage. The heirs of the first mortgagor, who were infants at the time of her death, tendered to the second mortgagee the amount due on the mortgage so foreclosed, and, upon his refusal to accept said tender and execute to them a quitclaim deed of the land, filed a bill to redeem from the foreclosure. And it is held that the bill seems to have been filed in recognition of the validity of the claim of the first mortgagee, and asks that an account be taken of the amount due for principal and interest on the mortgage; that the entire transaction of substituting the second mortgage for the first one should be taken together, and it is not inequitable that the land should be charged with this indebtedness, which has never in fact been paid.

8. The defendant contended that, if the bankruptcy sale did not vest full title in him, as the discharge of his mortgage was made under a mistake of fact, complainants should be required, as a condition to relief, to pay the amount of said mortgage, together with the amount paid on the first mortgage. Complainants met this contention with the claim that, as the mortgage was given to secure an antecedent debt, the defendant could not be treated as a bona fide purchaser. The pleadings were not so framed as to admit of this defense, but the question was litigated in the court below. And it is held:

a-That as the defendant, upon the occasion of accepting the mortgage, which he did in good faith, and without notice of complainants' rights, extended the time of payment of the amount secured, he must be held a bona fide purchaser, to the extent of his mortgage interest.

b-That the case will be remanded, with leave to the defendant to amend his answer by setting up his claim under his mortgage; that either party may, within a reasonable time after the amendment, offer further proofs upon that subject; that, to determine the rights of the parties, an accounting shall be had; that on such accounting the defendant will be entitled to an allowance for the amount paid on the first mortgage, with interest, and, if the court shall so determine, for the amount of his own mortgage, with interest; that defendant will also be entitled to an allowance for the increased value of the land by reason of improvements by him made in the honest belief on his part, as appears from the testimony, that he had acquired title by his purchase from the assignee

in bankruptcy; that complainants may offset the rents and profits of the land, but not the increase of rental value due to improvements, and will be entitled to redeem upon payment of the balance found due to defendant after deducting the rents and profits, and will recover costs of both courts.

Appeal from Wayne. (Carpenter, J.) Argued October 2, 1894. Decided December 22, 1894.

Bill to redeem from a mortgage foreclosure. plainants appeal.

Com

Decree reversed, and record remanded for an accounting. The facts are stated in the opinion.

George Gartner, for complainants.

Moore & Moore, for defendant.

MONTGOMERY, J. This is a bill filed to redeem from a foreclosure upon a mortgage executed by complainants' mother, Marie G. Bagard.

The facts of the case are that on the 1st of April, 1871, Marie G. Bagard was the owner of lot 3 of the subdivision of the St. Jean farm, being part of private claim 26 in the township of Grosse Pointe, Wayne county. On that day she executed to Maria D. Tracy a mortgage to secure the payment of $700 at the end of five years, with interest at the rate of 10 per cent. per annum, payable semiannually, according to the conditions of a certain bond collateral thereto. In October, 1872, Marie G. Bagard died, leaving the two complainants, her children, and who are her sole heirs at law. The younger of these complainants became of age November 3, 1891, and this bill was filed shortly after. It appears that in 1874 there was due upon the mortgage one installment of interest, of $35, and Edward G. Bagard, the father of complainants, it is claimed, offered to pay such installment, and was also desirous of paying the principal sum, which was not yet

103 MICH.-16.