Heironimus v. Sweeney

Citations

• 83 Md. 146
• 33 L.R.A. 99

Syllabus

<p>Savings Institution—Distribution of Assets—Priority of Special De- . positors Over Members—■Compounding Interest on Deposit— Power of Corporation to Borrow Money—Ultra Vires—Estoppel of Corporation to Repudiate Liability.</p> <p>Under the by:laws of a savings institution there were three classes of depositors : (x) Weekly depositors, who agreed to deposit a certain sum each week, and were entitled to dividends on the earnings of the institution. These were also members of the corporation, with a right to vote for directors. (2) Special depositors, who were entitled to receive such interest on their deposits as might be allowed by the directors. (3) Dime depositors, who were allowed interest at the rate of three per cent. The assets of the institution were not sufficient to pay all the depositors in full. Upon their distribution by receivers, held, that the special depositors were creditors of the institution and entitled to be paid in full, principal and interest, before distribution of the surplus to the weekly depositors, who were in substance the stockholders of the corporation.</p> <p>A special depositor, under a contract allowing him three per cent, interest semi-annually on the amount of his deposit if not drawn out within one year, agreed with the corporation that these amounts of . interest should remain and draw interest as new principal. Held, that such arrangement was unobjectionable.</p> <p>The charter of the institution conferred upon it power to make all contracts, etc., and authorized the directors to provide for the admission of members, to regulate the receiving of deposits and pass all necessary by-laws. Under the by-laws adopted, the weekly depositors were made members, and deposits received from special depositors, as above set forth. Held, that the contracts made with the special depositors, which were in' effect interest-bearing loans, were not beyond the corporate powers of the institution.</p> <p>A corporation has the power, without expres