or as amendments to the old.109 The by-laws or rules of the society are to be considered as forming part of the mortgage by virtue of the mortgagor's membership in the association. FORECLOSURE OF MORTGAGE 44. Upon default in the payment of stock, interest, etc., the property mortgaged must be sold, either by virtue of a provision in the mortgage to that effect, or by legal proceedings. The proceeds of the sale may be disposed of, as provided for by the terms of the mortgage in various ways. The usual method, after payment of all arrears, is either (1) for the association to invest the surplus, in trust, and to apply the income arising therefrom to the payment of all accruing monthly dues, interest, and fines, until the termination of the building association, or (2) to retain the full present value of the mortgage, treating all future payments which shall become due during the balance of the association's existence, as immediately due and payable, and paying the surplus to the borrower. The sale of the premises on foreclosure of the mortgage does not discharge the borrower, if its proceeds be insufficient to satisfy the amount of the mortgage in full; he is still liable to pay the balance, and may be sued therefor." And where the association satisfies its claim in full, from the sale of the mortgaged premises, the sale does not extinguish the membership of the borrower, but, the debt being canceled and paid in full by the proceeds of the sale, he retains his interest in the association, and, if he continue his stock payments, is entitled to the value of his stock upon its maturity; or, upon dissolution, to his full share of the funds of the association.' 111 But a borrowing member has the right to apply his stock payments in reduction of the mortgage debt, if he choose; and, if he do so, or if the association do so, without objection 1092Ch. (Eng.) 311 (1893). 110 40 Md. 237 (1874). 111 35 Pa. 463 (1860). by him, his stock is thereby extinguished, and his membership in respect of it is at an end. 45. When the mortgage debt is due, and a tender (an offer to pay the debt) is properly made by a person having a right to make it, the association is bound to accept it; and, if it refuse to receive the money tendered, interest will cease to run from the time of the tender. If, however, the association subsequently agree to accept the money previously tendered, and demand its payment, and the party who made the tender be not then ready to pay it, interest must run on as if no tender had been made, until the money is paid or brought into court.112 The general rule is that, if a specific tender of the amount due be made before or after the commencement of suit with costs, proof of such tender, and of its refusal, will throw on the party refusing the burden of all subsequent costs, though he be in strictness entitled to a decree of foreclosure. If a party declare that no tender will be accepted if made, that will dispense with a formal tender.113 113 112 If the association hold both a mortgage and an assignment of a member's stock, it may, at least so long as the member still owns both, enforce either security, or both." But where a borrowing member subsequently assigns his interest in the stock, for value, absolutely, or makes a second mortgage of the land to another, the association is not allowed to come first upon the security which is subject to the claims of both parties, but must resort to the other security for satisfaction, and can only come upon the security which is subject to the claims of both for the balance of its claim.115 So, where the association has mortgages upon two pieces of land, one of them being also subject to a subsequent mortgage held by another mortgagee, it may be compelled to pursue the same course, if necessary, for the satisfaction of the claims of both parties, unless that will trench upon its rights, or operate to its prejudice. = 112 42 Md. 192 (1874). 113 lbid. 114 103 Pa. 507 (1883). REDEMPTION OF LOANS 46. Although a borrowing member, especially one who has assigned his shares to the society, cannot withdraw from membership like an unadvanced member, leaving his debt to the association unpaid, he can, nevertheless, relieve himself at any time from the necessity of continuing the periodical payments of interest, dues, and premiums, called for by his former contract, by repayment of the loan. But in repaying the loan prior to maturity, the borrower, if he so desire, unless he have already assigned his shares absolutely to a third party, may apply his stock payments already made to the extinguishment of his debt, so far as they will go, and his representative (as, for example, his assignee for the benefit of creditors) may also make such application." The difficulty in such a case lies in ascertaining the exact amount the borrowing member shall be called upon to pay. The method of calculating this is sometimes fixed by statute or by-law. In the absence of such provision, the rule generally adopted is to calculate the probable duration of the association, from the time the borrower received the loan until his stock will mature, and find the total amount of all subscriptions due from him to the association during this period, counting past payments, and treating future payments as immediately due. This, when added to any fines or other charges standing against him, represents the total amount of his debt. He is then to be credited with all the periodical payments he has made on account of dues and interest, but with his actual payments only, and not with any profits made thereon by the association. The balance thus struck represents his present indebtedness to the society at any time. A borrower loses the right to have his dues applied to the debt by assigning his shares absolutely to a third party. By so doing he makes a definite appropriation of the value of - 116 46 Pa. 493 (1864). his stock, and cannot afterwards assume to reappropriate it in violation of the arrangement already consummated.""' 118 Where the association enters into a special arrangement, outside of statute and by-law, to induce a member to repay and settle his account, it is bound by the terms thereof when consented to by the member.' Such arrangements, however, often prove short-sighted and disastrous to the society. When the premium is paid in a lump sum at the time the loan is taken, it is frequently provided that a borrower, on repaying the loan, shall receive back a proportionate amount of his premium for each year or each month from the date of repayment until a fixed time, based on the probable maturity of his stock. In applying this rule, fractions of a year or of a month are disregarded, unless provision be made to the contrary. When a borrowing member dies, the rights of the parties interested are to be adjusted in the same manner as if the borrower had voluntarily elected to pay off the loan and withdraw.' 119 117 35 Pa. 223 (1860). 118 50 Pa. 32 (1865). 11934 Leg. Int. (Pa.) 49 (1877). DISSOLUTION 47. An incorporated building association is dissolved by the expiration of the time limited for its existence by its charter or the law under which it is incorporated. ing association may also be dissolved (1) by the accomplishment of the objects for which it was created; (2) by voluntary surrender of its franchises; (3) by act of the legislature (where permitted); (4) by decree of court. 120 The misuser or non-user of its franchises; the insolvency of the association; the omission to elect officers; the neglect or refusal of members to continue their stock payments;' and even the cessation of all corporate acts and business, do not of themselves dissolve the association, but only constitute good cause for which a court of equity will, upon petition of a member, decree the appointment of an officer, called a receiver, for the purpose of winding up the affairs of the association. The mere maturing of the stock does not of itself dissolve the association. This can only be effected, under such circumstances, either by a voluntary winding up, or a decree of court, upon investigation of the affairs of the society, at the instance of one competent to demand it, and upon proof that the time has actually arrived when the assets of the corporation have become equal to the par value of all its stock.' 121 The maturing of the stock is a ground of dissolution only in a terminating association. It is of the very nature of a serial or permanent association that all the stock cannot mature at once, and the maturing of one series is not reason for dissolving the association. In order to effect the voluntary surrender of the franchises of a building association before the expiration of the time. 120 13 N. J. Eq. 427 (1861). 121 97 Pa. 514 (1881). |