Such corporation, acting in good faith and reasonably, may compromise with a member, and release him from further obligation to the corporation, whether the indebtedness be for a loan or on subscription. Ib.

Where such compromise has been made in good faith, it will not be rescinded because the released member was paid a larger sum than he would have received upon a pro rata distribution of the assets. Wangerien v. Aspell, 47 Ohio St. 250.

An executory contract between a building association and a member in respect to more than twenty shares is ultra vires and cannot be enforced. Simpson v. Building and Savings Association, 38 Ohio St. 349.

The act of May 9, 1868, does not grant banking powers within meaning of section 7, article 13, of constitution. Bates v. People's S. & L. Assn., 42 Ohio St. 655.

A borrower who has deposited money to procure a loan is estopped to deny that he is in fact a depositor. Ib.

Such corporation can take only rate of interest allowed by law, and premium bid for precedence in taking a loan at a competitive sale of such right. Ib.; State v. Greenville Bldg. Assn., 29 Ohio State, 92. See, also, 5 N. P. 86.

Such corporation may pay taxes or assessments levied on real estate mortgaged to it to secure a loan and will have first lien therefor, it having no knowledge of defect or illegality in the assessment; and where the same were paid by its secretary and treasurer for the corporation with its money and he prayed for judgment in his own name: Held, judgment for corporation for such payments, without amending petition, was not error. Ib.

By-laws construed. Building Assn. v. Bebout's Adm'r, 29 Ohio St. 252. Building associations are corporations for profit, and dues payable by the association's constitution until the full amount of capital is paid, are analogous to payments on stock subscriptions; and where payment of dues was stopped by consent, and association was in hands of receiver, no dues were payable except as assessments by the court to pay debts and equalizing stockholders among themselves, and an assignment of a mortgage by the corporation is void as to the receiver who is entitled to collect the interest payable by the terms of the mortgage, monthly, there being no defense showing that without such interest there were assets sufficient. Hinman, Receiver, v. Ryan, 3 C. C. 529.

See Building Assn. v. Cummings, 45 Ohio St. 664, as to liability of several upon bond having only one seal. See Seibel v. Bldg. Assn., 43 Ohio St. 371, as to shares, value, etc.; also, Eversman, Receiver, v. Schmitt, 53 Ohio St. 174; Ruehlman v. Atlantic Bldg. Assn. Co., 6 C. C. 285; Turner Bau-Verein v. Woodburn, 27 B. 409; Building and Loan Co. v. Richter, 16 C. C. 191, reversing 4 N. P. 97; Sachs v. Duckworth Bldg. & Loan Assn., 4 N. P. 214 (Sup. Ct. Cin.); Schone v. Consol. Bldg. Co., 4 N. P. 216 (Sup. Ct. Cin.); Ward v. Building Co., 5 N. P. 132 (Sup. Ct. Cin.); Galvin, Receiver, v. Albers, 6 N. P. 273 (Sup. Ct. Cin.); Bldg. Assn. v. Tenney, 7 N. P. 130.

An Act to provide for the organization, regulation and inspection of building and loan associations and to repeal certain laws therein named. Passed May 1, 1891.

($ 3836-1.) Sec. 1. Building and loan associations; domestic, foreign-Laws governing

A corporation for the purpose of raising money to be loaned among its members shall be known in this act as a building and loan association. Associations organized under the laws of this state shall be known in this act as "domestic" associations, and those organized under the laws of other states or territories, as "foreign" associations. Associations may be organized and conducted under the general laws of Ohio relating to corporations, except as otherwise provided in this act. 88 O. L. 469.

A corporation may become a member to borrow money for its business. Norwalk Sav. Bk. Co. v. Norwalk Metal, etc., Co., 14 C. C. 1.

($3836-2.) Sec. 2. Capital stock; subscription to-Di

rectors

The capital stock named in the articles of incorporation shall be deemed to refer to the authorized capital, and the organization may be completed and business commenced when five per cent thereof is subscribed. Directors may be elected for any term, not less than one year nor longer than three years, but if such term be longer than one year, it shall be so arranged that the term of office of an equal number of directors, as nearly as may be, will expire each year. 88 O. L. 469.

($ 3836-3.) Sec. 3. Deposits-Stock-Dues, fines, interest and premiums-Withdrawals-Cancellations-Stock of minors-Real estate and personal property-Borrowing money-LoansCancellation of loans-Reserve fund-Dividends-Increase or decrease of capital or face value of shares-Dissolution-Constitution and by-laws-General powers-

Such corporation shall have power: To receive money on deposit from time to time, to the extent necessary to meet the demands made on it by its members and depositors, but shall not pay interest thereon, exceeding the legal rate. To issue stock to members on such terms and conditions as the constitution and by-laws may provide; but no person shall vote more twenty shares in any such

corporation in his own right. To assess and collect from members and depositors such dues, fines, interest and premium on loans. made, or other assessments, as may be provided for in the constitution and by-laws. Such dues, fines, premiums or other assessments shall not be deemed usury, although in excess of the legal rate of interest. To permit members to withdraw all or part of their stock deposits at such times and upon such terms as the constitution and by-laws may provide. Any member, however, who withdraws his entire stock or whose stock has matured, shall be entitled to receive all dues paid in and dividends declared, less all fines or other assessments, and less a pro rata share of all losses, if any have occurred. To cancel shares of stock upon which all payments have been withdrawn, or upon which loans have been canceled, and reissue them as a new stock. To issue stock to minors and permit the same to be withdrawn as other stock, and the receipt of such minor shall be a valid acquittance, if his rights have been fully secured to him. To acquire, hold, incumber and convey such real estate and personal property as may be necessary for the transaction of its business or necessary to enforce or protect its securities. To borrow money, not exceeding twenty per cent of the assets, and issue its evidences of indebtedness therefor. To make loans to members and depositors on such terms, conditions, and securities as may be provided in the constitution and by-laws. To cancel such loans and release the securities on such terms as the board of directors may provide. But any member may have his loan canceled upon the following terms, to wit: After the premium for one year has been paid, and also the interest and premium up to the date of cancellation, the borrower shall pay the sum actually borrowed, less the dues paid and dividends credited. He shall pay also any fines or other assessments required by the constitution or by-laws. To accumulate from the earnings and invest as the board of directors may determine, a reserve fund, for the payment of contingent losses. To make such annual or semi-annual distribution of the earnings (after paying expenses and setting aside a sum for the reserve fund as hereinafter provided), as the constitution and by-laws may prescribe. To increase or decrease its authorized capital or the face value of its shares at any time, by a majority vote of its board of directors; and a certificate of such action shall be made by the president and secretary, and duly filed with the secretary of state. To dis

solve the corporation when its continuance shall be deemed, by a majority vote of its members, to be no longer desirable, subject, however, to the vested rights of members. To provide, by constitution adopted by its members, and by-laws adopted by its board of directors, for the proper exercise of the powers herein. granted, and the conduct and management of its affairs. All such other powers as are necessary and proper to enable such corporation to carry out the purpose of its organization. 88 O.

L. 469.

On right of stockholder to recover amount of his deposit, see article in 33

B. 201.

Fines and penalties accrue to date of payment of mortgage where mortgagor assigns for benefit of creditors. Hutchinson v. Straub, 16 C. C. 452. Provision exempting building and loan associations from operation of usury laws is unconstitutional. Mykrantz v. Globe Bldg. & Loan Assn., 19 C. C. 51. See criticism of case by A. T. Brewer, 42 B. 330.

(§ 3836-4.) Sec. 4. Deposit and withdrawal of fundsTreasurer's bank book; expenditures-Bond

of certain officers-Directors not eligible as bondsmen, etc.

The board of directors shall designate a bank or banks in which the treasurer shall deposit all funds in the name of such corporation. Such funds can then be withdrawn only by check signed by the president and financial secretary, or such other officers, as the board of directors may designate. The treasurer's bank book shall be open to the inspection of any director at any time. president or secretary or other officer shall sign any check unless the expenditure has been authorized by the board of directors. All officers of such association who have charge or possession of money, securities, or property, shall give bond before entering upon their duties to the satisfaction of the board of directors, for the faithful performance of the same, and the safe keeping and proper application of all moneys or property coming into their hands. All officers of such corporations, on being re-elected to office shall renew their bonds. The bond may be increased or additional sureties required, at any time, by the board of directors. Directors shall not be eligible as bondsmen, and shall be individually liable for any loss to members, caused by their neglect to comply with the provisions of this section. 88 O. L. 469.

($3836-5.) Sec. 5. Fund for contingent losses

The amount to be set aside to the fund for contingent losses shall be determined by the board of directors, but in all permanent or perpetual associations, at least five per cent of the net earnings shall be set aside each year to such fund until it reaches at least five per cent of the outstanding loans. All losses shall be paid out of such fund until the same is exhausted, and whenever the amount in said fund falls below five per cent of the loans as aforesaid, it shall be replenished by annual appropriations of at least five per cent of the net earnings as hereinbefore provided until it again reaches said amount. 88 O. L. 469.

(§ 3836-6.) Sec. 6. Earnings; application of-Dividends -Losses; apportionment of

All expenses of such associations shall be paid out of the earnings only, and so much of the earnings as may be necessary shall be set aside each year for such purpose. But charges incident to a loan, if paid by the borrower, shall not be deemed a part of the current expenses. A portion of the earnings, to be determined by the board of directors, shall also be reserved annually, or semi-annually, for the payment of contingent losses, as provided in section five of this act, and the residue of such earnings shall be transferred as a dividend annually, or semi-annually, in such proportion to the credit of all members, as the corporation by its constitution and by-laws may provide, to be paid to them at such time and in such manner in conformity with this act as the corporation, by its constitution and by-laws may provide. All losses shall be assessed in the same proportion and manner on all members after the amount in the reserve fund has been applied to the payment of the same. 88 O. L. 469.

($3836-7.) Sec. 7. Taxation of building and loan associaciation stock

The shares and loans, advanced to its members, shall be exempt from taxation, except shares or stock upon which no loans have been made or money advanced by the company, shall be considered and held as credits, and the said members individually, shall list for taxation the number of shares held by them, and the true value thereof in money, on the day preceding the second Monday in April in each year, and the same shall be assessed at such valuation for taxation and taxes as other property. 88 O. L. 469.