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upon their misappropriation; the place or places of the meetings of the society; the powers and duties of the members at large, and of the committees and officers; the number of officers, and the purposes for and the manner in which they are to be elected, and their duration in office, as also the number of members to constitute the committee; the manner of settling disputes, whether by justices or arbitration, and if in the latter way the number of arbitrators and the mode of their election. Provision must also be made for the preparation, by some officer of the society, once in every year, of a statement of the funds and effects of the society, specifying in whose custody they are, together with an account of all receipts and expenses since the last preceding statement.
The provisions of the former Friendly Societies Acts, the 10 Geo. 4. c. 56, and 4 & 5 Wm. 4. c. 40, are incorporated into the Benefit Building Societies Act; and, although these Acts have been repealed, they are still in force for the purposes of these societies. This point was virtually decided in Rex v. Inhabitants of Merionethshire, 6 Q.B. Reports 343, where it was held that the repeal of an Act which had been incorporated with another Act did not repeal the former Act so far as it was applicable to the purposes of the Act into which it had been incorporated. See also Reg. v. Stock, 8 Ad. & Ell. 405.
The sections of the above Acts applicable to these societies will be found infra.
By the 7th section of the 10 Geo. 4. c. 56, no society is to have the benefit of the Act. until the rules have been deposited with the Clerk of the Peace, and duly entered in a book to be kept by an officer of the society ; but notwithstanding this, any bond or security given to the treasurer will be valid, and may be sued upon at law. This point arose in the case of Jones v. Woollam, 5 Barn. & Ald. 769, where it was held that a bond given to the treasurer of a Benefit Society, for the use of the society, was an available security at common law, although the rules of the society had not been confirmed pursuant to the statute then in force relating to Friendly Societies. In Margett v. Parkes, 1 Dowl. & L. 582, which was an action of assumpsit by the treasurer of a Friendly Society on a note, it was held that an averment that the rules were filed under 10 Geo. 4. c. 56, before the making of the promise, was not material; and an objection that they were not filed until after the making of the note, but before it became due, was invalid.
It would seem, upon the principle of the following case, that if any security requiring a stamp is given to the society before the rules are certified, and is not properly stamped, it will be sufficient if they are duly certified before action brought. In Bradburne v. Whitbread, 6 Sc. N. R. p. 284, which was the case of an unstamped promissory note given to the trustees of a Loan Society established under the Friendly Loan Act, it was contended that the trustees could not sue on the note, it having been made before the rules were enrolled, though after they had been certified; but the Court held that the enrolment of the rules before the commencement of the action, was sufficient to enable the trustees to recover.
Until the rules and alterations of rules are certified, they cannot be legally acted on. This point arose in Battey v. Townrow, 4 Camp. 5, where it was held that an action could not be maintained by the trustees of a Friendly Society, elected under new regulations, until they had been confirmed according to the statute, as the plaintiffs were not the legal trustees of the society for the time being, and the effects sought to be recovered never vested in them. See also Wybergh v. Ainley, 4 M-Cleland, 699. In Reg. v. Godolphin, 8 Ad. & Ell. 338, it appeared that certain alterations were made in the rules of a Friendly Society established under the 33 Geo. 3. c. 54; but the altered rules were never enrolled, and it was held that the rules as altered could not legally be acted upon. In giving judgment, the Court said it would be well if it were generally understood that these societies cannot depart from their established rules, or neglect to comply with the statute in the mode of altering or repealing them, without exposing their property to damage, and themselves to great expense, loss, and inconvenience. A doubt was also entertained as to whether the original rules continued in force, even for the purpose of holding the society legal under the statute, in consequence of the case Ex parte Norrish, Jac. 162; but in the case of Reg. v. Cotton, 15 Q.B. Repts. 569, it was held that, notwithstanding the alterations, the society was still in existence. See also Meredith v. Whittingham, 1 Com. Bench Reports, N. S. 216.
All rules and alterations are binding from the time of their being certified, Bradburne v. Whitbread, 6 Scott, N.C. 283, and the certificate of the barrister is conclusive as to the validity of the rules or alterations, Dewhurst v. Clarkson, 3 Ell. & Bl. 194, where it was proved that the rule of the society as to manner of making new rules had not been complied with; the certificate, however, will not make an illegal rule legal, Kelsall v. Tyler, 11 Exc. Rep. 560.
The property on account of which the advance is required, is to be mortgaged to the society to secure the amount of the shares with interest, and all other payments due under the rules; the security should be made in the usual mortgage form, and not as a conveyance upon trusts to secure the repayments, for if made in this latter form the society will not, upon default being made in the repayments, be entitled to a foreclosure decree, as in the case of a regular mortgage, but accounts will be ordered to be taken and the property to be sold, Schwestzen v. Stych, 31 Beav. 37.
The funds of the society cannot be laid out in the purchase of land to be allotted among the members, and the directors and trustees will be personally liable for all monies so laid out, Grimes v. Harrison, 26 Beav. 435, In re Kent Benefit Building Society, 7 Jur. 1045; but notwithstanding this misapplication of the funds, the members are still liable to pay their subscriptions, Hughes v. Layton, 10 Jur.,513, 12 Weekly Rep. 408.
By the 5th section of the Building Societies Act, a receipt endorsed upon the mortgage or further charge is to vacate the same, and to vest the property in the person for the time being entitled to the equity of redemption. In Prosser v. Rice, 28 Beav. 68, a member mortgaged to the society and then made a second mortgage to C, who therefore became entitled to the equity of redemption; the member then borrowed a sum from D to pay off the society, and a receipt was endorsed upon the mortgage, and a mortgage executed to D; and it was held that the legal estate was thereupon vested in C by the operation of this section, and not in D. Although this receipt operates as an effectual reconveyance, yet in a recent case the costs of a reconveyance by deed were allowed on taxation. Page, In re, 32 Beav. 485.
These societies are within the operation of the Winding-up Clause of the Joint Stock Companies Act, 1862. In re Midland Counties Benefit Building Society, 33 Law Jour. (Ch.) 739.
RIGHTS AND LIABILITIES OF THE SOCIETY AND
The 13th section of the 10 Geo. 4. c. 56, states how the funds of the society not wanted for the immediate exigencies thereof may be invested, and