MR. CHIEF JUSTICE BRANTLY,
after stating the case, delivered the opinion of the Court.
Many errors are alleged as grounds for a reversal of the action of the district court, but of these we shall notice only three.
1. In the directions given to the referee touching the credits to be allowed plaintiff in ascertaining the balance due, no' account was taken of the sum of $30 paid as interest and dues for June, July and August on the four shares of Series D. This amount, with interest from the date of payment, should have been allowed as a credit.
2. Plaintiff insists that he should have been allowed as •credits upon his loans the whole amount of the premiums paid by him as of the respective dates of payment. The theory of his argument is that the consideration or inducement for paying these large premiums was the mode of payment, being in small sums monthly, and his participation in profits resulting from premiums, dues and fines from time to time, and other sources of income; and that as the association allowed itself to become dissolved by limitation, this consideration has failed. He insists, also; that the relation between himself and the association should be declared to be that of debtor and creditor simply, and that the settlement should be made on that basis, he being allowed credit for all payments made on the principle of partial payments. Taking the contracts as they are stated in the bonds and mortgages according to their terms, they provide for a repayment of the sums advanced absolutely at the end of ten years, or upon the expiration of the charter limit, without reference to the maturity of the shares. They contain no stipulation that upon the maturity of the shares they should be finally surrendered in full payment of the loans. Under the by-laws of the association, however, this stipulation is to- be read into them, and they are to be construed accordingly. The shares were bought, and the loans or advancements were made, [451]*451■with the intention that this should be the result. Indeed, no other claim is made by the trustees. They assume the position, however, that the possible dissolution of the association before maturity of all shares was a matter within the contemplation of the plaintiff as well as of the association, and that, having secured the advancements under such circumstances, it would be inequitable to allow him accredit for the premiums, or any part of them, thus depriving the nonborrowing shareholders of a part of the value of their shares as ascertained at the date of dissolution. They insist also that under the circumstances of this case, other borrowing shareholders having fully matured their stock without taking credit for any portion of the premium paid, the plaintiff should not be allowed a credit for his. We do not think either of these positions correct. The plan adopted by the trastees to. mature the shares of the borrowing members was entirely unauthorized. As there were no outside creditors, the only power possessed by them was to collect up the assets, and distribute them pro rata among all the shareholders. Apart from the payment made by the plaintiff m August, 1896, which has already been disposed of, we shall, therefore, disregard entirely what has been done by the trustees since Way, 1896, and ascertain from the conditions then existing what the rights of the parties are. The weight of authority is, perhaps, in favor of plaintiff’s position that he should be credited with the full amount of the premiums paid as of the date of each loan. This coincides with the view stated by Mr. Endlich in section 531 of his work on Building Associations. It is not controverted by plaintiff, however, that the ascertained value of unmatured shares of Series C and D, on May 6, 1896, was correctly stated in the circular of August 22. These values were obtained by apportioning all premiums, interest, dues and fines paid up to that time, and also, funds aidsing from forfeitures. The premiums had been paid with full knowledge that the association would be dissolved on that elate, without reference to the maturity of the shares. It is not claimed that the holders of these shares would not, under the value thus ascer[452]*452tained, receive all that they had paid into the association, dollar for dollar, and a profit besides. In fact, from the condition of affairs as shown in the record, the shares were worth more than had been paid upon them, with accumulated interest. The association was, therefore, not insolvent. This condition exists only where, in the cou-rse of the business, the principal of tlie shareholders has besóme so impaired as toi fall below the level of the amount paid in. The premium paid by plaintiff, as well as by the other advanced members, entered into and made a part of the value of the shares. This adjustment gives to the unadvanced members somewhat the advantage, and to this extent is inequitable. At the same time, to allow plaintiff credit for the whole of the amounts paid would give him a much greater advantage over them. The question how to dispose of it presents great difficulty, but the plan adopted by the court below, by which he was given credit for the unearned portion,, seems, under all the circumstances, to be the most equitable; for it must be remembered that the obligations resting upon the members are mutual, and that all are parties to the contract of advancement or loan. Though, upon the dissolution, the contract was broken down, yet in adjusting the rights of the shareholders as among themselves it should be enforced as near as may be with the view of allowing each to receive nothing-more than his associate. The consideration for which the premium was paid has failed in part, but only in part. The statutes in some of the states governing these associations provide that upon voluntary repayment of a loan there must be an equitable apportionment of the premium, and this principle', which produces a fair result, has been recognized and applied to cases where the association has become insolvent, and has had its affairs administered by a court of equity. (Towle v. Am. Bldg. Loan Inv. Society (C. C.), 61 Fed. 446.) Though the act authorizing the association in question here contained no provision on this subject, subsequent acts of both the territorial and state legislatures have recognized and provided for its application to voluntary payments. Under the circum[453]*453stances of tliis case> we think its application just and equitable.
The district court held that the only credits to which the plaintiff was entitled were the interest payments and the unearned portion of the premiums, and that he must pay the balance due upon the bonds and mortgages. No provision was made in the decree allowing him a distributive share in the assets upon final distribution. We think it was its duty to ascertain what the accrued value of the shares of each class was, and to allow plaintiff a credit also for these amounts upon the respective loans, without interest, after deducting’ from the value of the stock a sufficient amount to pay plaintiff’s proportionate share of the reasonable expenses of administration of affairs by tlm trustees. There can be no just reason assigned, under the circumstances, why the plaintiff should be compelled to pay the full amount, of his loan as found by the trial court, and then be presently reimbursed by the trustees. The method of settlement thus indicated not only secures to- plaintiff all the rights to which he is entitled, but. it also does no wrong to other shareholders.
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MR. CHIEF JUSTICE BRANTLY,
after stating the case, delivered the opinion of the Court.
Many errors are alleged as grounds for a reversal of the action of the district court, but of these we shall notice only three.
1. In the directions given to the referee touching the credits to be allowed plaintiff in ascertaining the balance due, no' account was taken of the sum of $30 paid as interest and dues for June, July and August on the four shares of Series D. This amount, with interest from the date of payment, should have been allowed as a credit.
2. Plaintiff insists that he should have been allowed as •credits upon his loans the whole amount of the premiums paid by him as of the respective dates of payment. The theory of his argument is that the consideration or inducement for paying these large premiums was the mode of payment, being in small sums monthly, and his participation in profits resulting from premiums, dues and fines from time to time, and other sources of income; and that as the association allowed itself to become dissolved by limitation, this consideration has failed. He insists, also; that the relation between himself and the association should be declared to be that of debtor and creditor simply, and that the settlement should be made on that basis, he being allowed credit for all payments made on the principle of partial payments. Taking the contracts as they are stated in the bonds and mortgages according to their terms, they provide for a repayment of the sums advanced absolutely at the end of ten years, or upon the expiration of the charter limit, without reference to the maturity of the shares. They contain no stipulation that upon the maturity of the shares they should be finally surrendered in full payment of the loans. Under the by-laws of the association, however, this stipulation is to- be read into them, and they are to be construed accordingly. The shares were bought, and the loans or advancements were made, [451]*451■with the intention that this should be the result. Indeed, no other claim is made by the trustees. They assume the position, however, that the possible dissolution of the association before maturity of all shares was a matter within the contemplation of the plaintiff as well as of the association, and that, having secured the advancements under such circumstances, it would be inequitable to allow him accredit for the premiums, or any part of them, thus depriving the nonborrowing shareholders of a part of the value of their shares as ascertained at the date of dissolution. They insist also that under the circumstances of this case, other borrowing shareholders having fully matured their stock without taking credit for any portion of the premium paid, the plaintiff should not be allowed a credit for his. We do not think either of these positions correct. The plan adopted by the trastees to. mature the shares of the borrowing members was entirely unauthorized. As there were no outside creditors, the only power possessed by them was to collect up the assets, and distribute them pro rata among all the shareholders. Apart from the payment made by the plaintiff m August, 1896, which has already been disposed of, we shall, therefore, disregard entirely what has been done by the trustees since Way, 1896, and ascertain from the conditions then existing what the rights of the parties are. The weight of authority is, perhaps, in favor of plaintiff’s position that he should be credited with the full amount of the premiums paid as of the date of each loan. This coincides with the view stated by Mr. Endlich in section 531 of his work on Building Associations. It is not controverted by plaintiff, however, that the ascertained value of unmatured shares of Series C and D, on May 6, 1896, was correctly stated in the circular of August 22. These values were obtained by apportioning all premiums, interest, dues and fines paid up to that time, and also, funds aidsing from forfeitures. The premiums had been paid with full knowledge that the association would be dissolved on that elate, without reference to the maturity of the shares. It is not claimed that the holders of these shares would not, under the value thus ascer[452]*452tained, receive all that they had paid into the association, dollar for dollar, and a profit besides. In fact, from the condition of affairs as shown in the record, the shares were worth more than had been paid upon them, with accumulated interest. The association was, therefore, not insolvent. This condition exists only where, in the cou-rse of the business, the principal of tlie shareholders has besóme so impaired as toi fall below the level of the amount paid in. The premium paid by plaintiff, as well as by the other advanced members, entered into and made a part of the value of the shares. This adjustment gives to the unadvanced members somewhat the advantage, and to this extent is inequitable. At the same time, to allow plaintiff credit for the whole of the amounts paid would give him a much greater advantage over them. The question how to dispose of it presents great difficulty, but the plan adopted by the court below, by which he was given credit for the unearned portion,, seems, under all the circumstances, to be the most equitable; for it must be remembered that the obligations resting upon the members are mutual, and that all are parties to the contract of advancement or loan. Though, upon the dissolution, the contract was broken down, yet in adjusting the rights of the shareholders as among themselves it should be enforced as near as may be with the view of allowing each to receive nothing-more than his associate. The consideration for which the premium was paid has failed in part, but only in part. The statutes in some of the states governing these associations provide that upon voluntary repayment of a loan there must be an equitable apportionment of the premium, and this principle', which produces a fair result, has been recognized and applied to cases where the association has become insolvent, and has had its affairs administered by a court of equity. (Towle v. Am. Bldg. Loan Inv. Society (C. C.), 61 Fed. 446.) Though the act authorizing the association in question here contained no provision on this subject, subsequent acts of both the territorial and state legislatures have recognized and provided for its application to voluntary payments. Under the circum[453]*453stances of tliis case> we think its application just and equitable.
The district court held that the only credits to which the plaintiff was entitled were the interest payments and the unearned portion of the premiums, and that he must pay the balance due upon the bonds and mortgages. No provision was made in the decree allowing him a distributive share in the assets upon final distribution. We think it was its duty to ascertain what the accrued value of the shares of each class was, and to allow plaintiff a credit also for these amounts upon the respective loans, without interest, after deducting’ from the value of the stock a sufficient amount to pay plaintiff’s proportionate share of the reasonable expenses of administration of affairs by tlm trustees. There can be no just reason assigned, under the circumstances, why the plaintiff should be compelled to pay the full amount, of his loan as found by the trial court, and then be presently reimbursed by the trustees. The method of settlement thus indicated not only secures to- plaintiff all the rights to which he is entitled, but. it also does no wrong to other shareholders. The settlement should, therefore, have been made as follows: Charge the plaintiff with the amounts of the loans, without interest, including the earned portion of the premiums as found by the district court; credit him with the ascertained value of his shares on May 6, 1896, less his share of expenses of administration; then charge interest from that date until the date of judgment upon any balance found due. Plaintiff should also be credited, as hereinbefore indicated, with the amount of the payment made in August, 1896, and in like manner charged with the insurance premium paid by the trustees in November, 1897.
3. Plaintiff contends that a receiver should have been appointed, because the evidence demonstrates that the association was insolvent at the date of its dissolution, and that at the time, this suit was brought the trustees were proceeding to continue the business by collecting dues, fines and interest from the borrowing shareholders, instead of limiting themselves to collecting and distributing the assets; thus casting an unequal birr[454]*454cien upon the borrowing shareholders. Section 561 of the Civil Code constitutes the directors of a corporation dissolved for any reason trustees for the creditors and shareholders, with full power to wind up its affairs, unless some other person be appointed for that purpose. No exception is made in case of insolvency. The intention of the legislature seems to have been to provide the most inexpensive and expeditious way for me administration of the affairs of a defunct corporation by confiding them to the hands of those who are best acquainted with them, and have a direct personal interest in preserving and appropriating the assets to their legitimate purposes, subject to an accounting or removal by a court of equity at the instance of a shareholder or creditor whose rights are jeopardized or betrayed. ([Havemeyer v. Superior Court, 84 Cal. 327, 24 Pac. 121, 10 L. R. A. 627, 18 Am. St. Rep. 192.) In no case, however, will a court resort to a removal of a statutory receiver, and appoint one in his stead, until it is made to appear that the-person complaining has been, or is about to be, injured by an unwarranted procedure on his part. In this case, as we have seen, the association was not insolvent-. The principal of the; contributing shareholders was not impaired in any'way at the time of the dissolution, and it is not claimed that the assets have been mismanaged, or in any way misappropriated by the trustees. Time, as has already been stated, their action in attempting to mature the shares of the borrowing shareholders was and is unauthorized; but t-heir course in this particular has not resulted in loss, nor has it in any way injured plaintiff. Indeed, the holders of shares of Series C who- paid their interest and dues after the dissolution, thus mailing a conventional arrangement with the trustees, received all the advantages they would have received if there had been no- dissolution. Instead of ascertaining the balance due from himself, and tendering it to the trustees, thus securing his release, or, which would have been better, demanding an accounting o-f them, and thus speeding them in the administration of t-heir timst, he took advantage of the indulgence extended to him by them, [455]*455and, when they refused to release him from his just obligations to the other shareholders, he sought to further delay and confuse matters and incur expense by insisting that they should be declared unworthy of confidence, and a receiver be appointed in their stead. Their acts, though unauthorized, have not injured him. He therefore has no sufficient ground upon which to urge the court to discredit them. The appointment of a receiver was properly refused.
Let tho judgment and order be reversed, and the cause be remanded, with directions to proceed in accordance with the views herein expressed.
Reversed and remanded.