Majority
p. 240(35 Misc. Rep. 115.) GARDNER v. NEW YORK MUT. SAVINGS & LOAN ASS’N. (Supreme Court, Special Term, Onandaga County. May, 1901.)
Headnote
Loan Association—Estoppel.Where a shareholder in a mutual savings and loan association knew of an amendment which reduced the withdrawal value of his shares below their actual value, but for two years made no protest, while other members paid their dues on the new basis, he is estopped after-wards, on withdrawal from the association, to claim any greater sum that he was entitled to under the amendment.
Action by Bufus C. Gardner against the New York Mutual Savings & Loan Association to recover a balance of an amount he would have been entitled to as the ownér of certain installment shares in the defendant but for the amendment of defendant’s articles of association whereby the withdrawal value of the shares was reduced. Plaintiff had no actual knowledge of the amendment, though regularly made. Judgment for defendant.
Gantz, Neier & McKennell, for plaintiff.
Russell & Winslow (John E. Ruston, of counsel), for defendant.
The articles of association, at the date of issuing of shares to plaintiff’s assignor, provided that withdrawing members should receive the amounts paid by them for dues, with 6 per cent, interest, less a withdrawal fee of one dollar per share. Subsequently the articles were amended so as to provide that they should receive the amount paid for dues, with the profits credited to the shares, less the amount set aside therefrom to the reserve fund.
p. 241
Tlie amount set aside to the reserve fund has, always included 1 per cent, per annum on the maturity value of shares, although prior to the amendment it was not deducted in ascertaining withdrawal value. The amendment, so far as it substituted declared profits for interest, was in the present case in favor of the withdrawing shareholder, and the question is solely whether the 1 per cent, per annum on the maturity value of shares (not the one dollar per share), which, having been put to the reserve fund, was, under the amendment, to be deducted instead of a withdrawal fee of one dollar per share, might lawfully be deducted by the defendant. While I am disposed to conclude that the amendment, in so far as it may have reduced the withdrawal value of the shares in question below their actual value, taking all the assets, including the reserve fund, into account, was a violation of the rights of plaintiff's assignor if done without his consent, I think he was estopped at the time he gave notice of withdrawal to claim any larger sum than he was entitled to under the amendment. He is chargeable with knowledge of the amendment in favor of other shareholders, some of whom have, no doubt, become members since then, and he could not stand by in silence, and without protest see other members paying dues, for more than two years, on the faith of the amendment, which cut down the withdrawal value of his shares, and afterwards claim, as against them, any greater sum on withdrawal than he was entitled to under the amendment. The defendant represents the equities of other members, and the estoppel is available to it.
Judgment for defendant, with costs.