Gardner v. New York Mutual Savings & Loan Ass'n

Marean, J.

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 six 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.

The amount set aside to the reserve fund has always included one 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 one 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.