Commonwealth v. Anchor Building & Loan Ass'n

Citations

• 20 Pa. Super. 101
• 1902 Pa. Super. LEXIS 192

Syllabus

<p>Building and loan association — Insolvency—Directors.</p> <p>It cannot be charged that the directors of a building and loan association are responsible for its insolvency where the evidence shows that the directors had no personal knowledge of any illegal or fraudulent acts in the management of the affairs of the association ; that examination was made of the financial affairs of the association by the committee duly and legally. appointed for that purpose; that their reports made to the board of directors, uniformly showed that the association was in a solvent, condition; that all of the directors who were examined, and whose evidence was not attempted to be contradicted, testified that they believed that the association was solvent, and that the first intimation they had that the association was in financial difficulty, was when an examination was made by the bank examiners.</p> <p>The action of the directors of a building and loan association in prematurely maturing stock, cannot be regarded as grossly negligent, where it appears that their action was taken after reports by duly appointed committees of the board on the financial condition of the association, and with the advice of counsel.</p> <p>Corporations — Directors—Gratuitous mandatories.</p> <p>Directors of corporations are gratuitous mandatories, and as such are held io but ordinary skill and diligence, and are personally liable only when they are guilty of fraudulent conduct, or of acts clearly ultra vires.</p> <p>Building and loan associations — Directors— Overborrowing.</p> <p>The directors of an insolvent building and loan association cannot be deprived of their rights as creditors to participate in the assets of the association, on the ground that-they had borrowed on behalf of the association -beyond its legal capacity, where no allegation is made that the borrowed money did not go into the association, and it is not made clear to what extent, if any, there was an overborrowing, or that the overb