Granger, J.
The case involves no controversy as to general creditors, nor as to any creditors except in so far as the ■withdrawing shareholders may be regarded as creditors, as to which fact there is some controversy in argument. There are two classes of persons who claim to be entitled to participate in the distribution of the assets of the corporation: First, those who gave notice of withdrawal before the appointment of the receiver, who claim to be preferred, and to be entitled to full payment 'before the other shareholders are entitled to anything; and, second, those who did not give such notice, who claim that all shareholders (that is, both classes) should share equally. The articles of incorporation provide for two funds, — a loan fund and an expense fund. The following is a provision of the by-laws under which it is claimed-, that the withdrawing shareholders should be preferred and first •paid: “Section 9. Any shareholder in good standing, after giving thirty (30) days’ notice in writing, and upon the surrender of his certificate, may withdraw, after three (3) months-’ dues have been paid, the full amount of his payments to the loan fund, together with the earnings up to the last dividend period. Said withdrawals shall be paid according to the priority of notice.” The stock of the corporation is classed from A to F, but the classification is not important for our consideration. The following is a further provision of the by-laws: “Article XVII. This- association shall not be liable to pay out on account of withdrawals of all classes of stock, during any one month, more than thirty (30) 'per cent, of the cash receipts of the loan fund during -such month, upon all classes of stock except Class F, and except stock issued under the provisions of Sec. 2 of article VII. of the by-laws. In case of withdrawal before maturity, there shall be charged against the book value thereof a withdrawal fee of 10 cents on [39] each share.” By a misappropriation, the loan fund has been used -for the expenses of the corporation to an amount in excess of thirty-six thousand dollars, and while, in argument, there is some contention otherwise, the corporation is insolvent. In considering the rights of withdrawing shareholders from such associations, the cases discuss the effect of the association 'being, at the time of withdrawal, “a going concern,” or insolvent, and its affairs being “wound up.” It is quite evident that the by-laws of this association were adopted with reference to doing business', rather than with reference to closing up its affairs. This fact is important in determining what must have been the mutual understanding of the incorporators in their adoption of the article and laws, and 'also the understanding of those who became shareholders afterwards. Section 9 of article 13 gives thé absolute right of withdrawal on thirty days’ notie*#, and just as absolute a right to withdraw payments to the loan fund, except that it must be done in a way prescribed. That method is fixed by article 17, which exempts the association from liability for such withdrawals, so that it is not required to pay, in any one month, more than thirty per cent, of the cash receipts of the loan fund during such month. Speak'ng of such an association as a going cor cera, there would seem to be no question hut that a wit’-drawing shareholder, on presentation of his certificate, could demand and should receive payment, in the order of his withdrawal, of as much money as the treasury 'afforded, of the thirty per cent, specified, and no more. If there were no provision for such payment, none could be made from the fund, and the shareholder must hold his stock or exchange it in the market. The right of withdrawing the stock,— that is, withdrawing the payments, — depends entirely on the by-laws authorizing it. The by-law is not a limitation on a prior right, — that is, a right existing [40] independent of the by-law, perforce of a person being a -shareholder, — but it is a grant of ¡a right, and limited by the terms of the grant.
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Granger, J.
The case involves no controversy as to general creditors, nor as to any creditors except in so far as the ■withdrawing shareholders may be regarded as creditors, as to which fact there is some controversy in argument. There are two classes of persons who claim to be entitled to participate in the distribution of the assets of the corporation: First, those who gave notice of withdrawal before the appointment of the receiver, who claim to be preferred, and to be entitled to full payment 'before the other shareholders are entitled to anything; and, second, those who did not give such notice, who claim that all shareholders (that is, both classes) should share equally. The articles of incorporation provide for two funds, — a loan fund and an expense fund. The following is a provision of the by-laws under which it is claimed-, that the withdrawing shareholders should be preferred and first •paid: “Section 9. Any shareholder in good standing, after giving thirty (30) days’ notice in writing, and upon the surrender of his certificate, may withdraw, after three (3) months-’ dues have been paid, the full amount of his payments to the loan fund, together with the earnings up to the last dividend period. Said withdrawals shall be paid according to the priority of notice.” The stock of the corporation is classed from A to F, but the classification is not important for our consideration. The following is a further provision of the by-laws: “Article XVII. This- association shall not be liable to pay out on account of withdrawals of all classes of stock, during any one month, more than thirty (30) 'per cent, of the cash receipts of the loan fund during -such month, upon all classes of stock except Class F, and except stock issued under the provisions of Sec. 2 of article VII. of the by-laws. In case of withdrawal before maturity, there shall be charged against the book value thereof a withdrawal fee of 10 cents on [39] each share.” By a misappropriation, the loan fund has been used -for the expenses of the corporation to an amount in excess of thirty-six thousand dollars, and while, in argument, there is some contention otherwise, the corporation is insolvent. In considering the rights of withdrawing shareholders from such associations, the cases discuss the effect of the association 'being, at the time of withdrawal, “a going concern,” or insolvent, and its affairs being “wound up.” It is quite evident that the by-laws of this association were adopted with reference to doing business', rather than with reference to closing up its affairs. This fact is important in determining what must have been the mutual understanding of the incorporators in their adoption of the article and laws, and 'also the understanding of those who became shareholders afterwards. Section 9 of article 13 gives thé absolute right of withdrawal on thirty days’ notie*#, and just as absolute a right to withdraw payments to the loan fund, except that it must be done in a way prescribed. That method is fixed by article 17, which exempts the association from liability for such withdrawals, so that it is not required to pay, in any one month, more than thirty per cent, of the cash receipts of the loan fund during such month. Speak'ng of such an association as a going cor cera, there would seem to be no question hut that a wit’-drawing shareholder, on presentation of his certificate, could demand and should receive payment, in the order of his withdrawal, of as much money as the treasury 'afforded, of the thirty per cent, specified, and no more. If there were no provision for such payment, none could be made from the fund, and the shareholder must hold his stock or exchange it in the market. The right of withdrawing the stock,— that is, withdrawing the payments, — depends entirely on the by-laws authorizing it. The by-law is not a limitation on a prior right, — that is, a right existing [40] independent of the by-law, perforce of a person being a -shareholder, — but it is a grant of ¡a right, and limited by the terms of the grant.
In Heinbokel v. Association, 58 Minn. 340 (59 N. W. Rep. 1050), this particular question is considered. The by-law in that case is -so like- the one in this ease- as to make the authority entirely applicable. It is said in that case: “In assuming the relation -of a member of the association, plaintiff contracted with reference to, and was to be governed by, its by-laws in so far as they were reasonable, and not opposed to -our -statutory provisions regulating associations- of this character. He agreed to abide by the condition of the treasury in case of a withdrawal, and to take his- money when funds properly applicable for the purpose were on hand. He was not to be paid until' these funds were in the treasury, and, although he cou-ld at any time cease to be a member, and terminate hi-s obligation to' make monthly payments, the amount to- be returned to him did not then become due or payable except in -a certain contingency. If not absolutely and immediately due and payable at withdrawal, it is difficult to see how his cause of action was then maintainable.” In that case the questions are considered whether or not a withdrawing shareholder becomes a creditor upon complying with the law for withdrawing his payments, and -also- whether he could- bring an action -and obtain judgment against the association when there is no- money legally applicable for the payment of his claim. It is held that such a -shareholder is not to be regarded as having the rights of the ordinary creditor, and hence that he could not maintain such an action. It is further said in that case: “The right to -draw and receive back what has been -paid into the treasury by a member of the association exists solely by virtue of the by-laws or .the statute. .If .this.right to receive the money out of [41] ■the treasury is made to depend upon its condition, the right is not perfect or .absolute until that condition exists.” In Association v. Kerr (Tex. Sup.) 13 S. W. Rep. 1020, where the right of withdrawal was given in the by-laws, and there was a provision that at no time should more than one-third of the funds in the treasury be .applied to the demands of the withdrawing stockholders without the consent of the directors-, it was held that there could be no recovery by such a •stockholder in the absence of a showing that there were funds applicable, or that the directors had consented to the use of other funds. Christian’s Appeal, 102 Pa. St. 184, involved a question as to the right of withdrawing •stockholders to preference after the payment of the general creditors, under by-laws so similar to those in the case at bar as to make the rule of the case authority; and it is there said as to such stockholders: “If the association has .been prosperous, they have the right, under certain limitations and restrictions, to demand and receive their proportionate share -of the accumulated fund; but if bad investments have been made, or losses have been sustained, before actual withdrawal, they must bear their just proportion- thereof. * * * When a 'building association has- failed to fulfill the object of its creation, and has become hopelessly insolvent, it cannot be justly or equitably wound up on airy other principle than that above suggested. After expenses incident to the administration of its assets are ■deducted, the general creditors, if any, -should be first paid- in full, and the residue of the fund -should be distributed pro rata among those whose claims are based upon stock -of the -association, whether they have withdrawn and hold orders- for the withdrawal value thereof or not. Both classes are equally meritorious, and, in the marshaling of the assets, neither is -entitled to priority -over the other, The claims of each are alike based [42] on their relation to the association as members thereof.” The case refers to Association v. Silverman, 85 Pa. St. 394; and, while it does not overrule or distinguish it, it announces the above rule with the former case in mind. It is not easy to reconcile the two cases in some particulars, and undoubtedly the last should be taken as the judgment of the court wherein, if at all, the cases are notin harmony. The Silverman Case is reviewed in Heinbokel v. Association, supra (the Minnesota case), and the holding is disapproved. In Endlich, Building Associations (2d ed.), section 114, it is said, speaking-of the by-law provisions of such corporations, that only a proportion of the funds can be withdrawn for the purpose of paying withdrawing stockholders: “This, then, becomes a charter limitation upon the rights of withdrawing members, and operates to prevent a conflict between them and the undisturbed exercise of the association’s -corporate functions by narrowing- them -down to ¡a certain portion of its assets as the source of their payment.”
It -seems to us that these authorities, as well as the language of the by-laws of the association in this case, fix a limitation on the rights of withdrawing shareholders as to the funds applicable to- the payment of their claims, and that beyond -such limit they cannot go. In this case there is, -confessedly, no such fund available. We have seen no case in which the limitation is like the one in this ca.se, it being limited to thirty per cent, of the monthly receipts. This, limitation, throughout the authorities, in this country, seems to be of controlling importance. Insolvency -but adds to the strength of such a position, and the holding- in Christian's Appeal, supra, is in a case where the corporation was insolvent, and the rule pvas 'there applied. Both parties have quoted from, and -argued the effect of, some English cases, and, conceding them to announce a different rule (and to- quite an extent they do), we are still [43] content with the rule that is supported by the weight of authority in this country, and best accords with reason. No one contends that such a conclusion is not the equitable one, the contention of interveners being only that a correct legal construction of the by-laws justified their claim, but in that view we do not concur. As we said at the outset, the provision of the by-laws for paying back contributions to the loan fund contemplated 'monthly receipts to such fund, so that the corporation, as a going concern, could apply a percentage thereof to such a purpose; and there is nothing to show a purpose to make such payments after such receipts ha e ceased, and the only business of the corporation is a final settlement and an equitable division of the assets. We think the judgment should be so changed as to make a pro rata payment of all 'stockholders, regardless of notices of withdrawal, and the cause is remanded for such a decree.- — -Reversed.