Page:North Dakota Reports (vol. 2).pdf/369

successive series, and all the stock of any one series, which Has not been forfeited, will reach par at the same time, and the purposes of the association as to such stock will then be at an end, and the assets will be distributed and the association dissolved. The fund so accumulated is, primarily, for the use of the stockholders. In the absence of express statutory authority, a building and loan association cannot loan its money outside of its own members. End. Bldg. Ass’ns. 312; Wolback v. Association, 84 Pa. St. 211. Neither can a loan be made toa stockholder in excess of the par value of his stock. Whena certain amount (not less than the par,value of one share of stock) is accumulated, the money is put up for sale, usually termed ‘auction,’ and that member who is willing to pay the highest premium, or who is willing to have the largest amount deducted, where a premium is deducted from the loan, receives a loan equal to the par value of the stock held by such party, and assigns his stock to the corporation as collateral security. But his duty to continue his payments upon his stock is not changed, and should he fail in that duty, his stock would become forfeited. Hence he is also required to execute his note for the loan, with mortgage security, and generally to pay interest on the amount until the note is paid. No definite date for payment is fixed. In theory, and generally in practice, the time of payment arrives when the stock reaches par, and the corporation, as to such stock, ceases to exist, and the member receives as his share of the assets his own note and mortgage. Under our statute, the member has the right to pay his note at any time and thus stop the interest; and in that case would, of course, be entitled, on the dissolution of the corporation, to receive the value of his stock in cash. But the effect of the transaction, zenerally speaking, is simply this: The association uses the fund to purchase the stock of that member who is willing to sell his stock in advance for the least money, and continue the payments on stock subscription until the value of his stock reaches par. It will be noticed that all the stock receives the benefit of the premiums paid, that of the party receiving the so-called ‘loan’ equally with that of the other stockholders; and the larger the aggregate premium paid, the