
    Eagle Savings and Loan Company, Respondent, v. Jennie Samuels, Appellant.
    
      Building and loan association—a borrower from it estopped from asserting that it had ceased to be a corporation — what does not effect its dissolution—premium on loam, how fixed.
    
    A person who accepts a loan from a building and loan association, incorporated under chapter 122 of the Laws of 1851, and executes a mortgage to it as such, is estopped" from asserting that the corporate existence of the association had terminated prior to the negotiation of the loan.
    
      Semble, that the fact that the number of its members and of its outstanding shares fell below the requirements of the articles of association would not effect,- per se, the dissolution of the corporation.
    It does not impair the validity of the transaction that the premium which the borrower agreed to pay for the loan was fixed arbitrarily, in advance, by the trustees of the association, and not by competition among the members, especially where it appears- that this rule of procedure was declared by the Attorney-General of the State, and that business had' been transacted on the faith of it for over ten years.
    Appeal by the defendant,-Jennie Samuels, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings bn the 14th day of March, 1899,. upon the decision of the court rendered after a trial at the Kings County Special Term.
    
      Mirabeau L. Towns, for the appellant.
    
      Edward M. Grout [Wm. E, C. Mayer with him on the brief], for the respondent,
   Cullen, J.:

This action is brought to foreclose a mortgage executed to the plaintiff, which-is a building and loan association incorporated under chapter 122 of the Laws of 1851. The mortgage was given to secure not only the amount actually advanced to the defendant, but also a premium given for the loan, and monthly dues agreed to be paid on her shares. . The great burden of the appellant’s argument is-to show the unfairness of the conditions of-the loan, the extravagant rate of interest which the borrower -agreed to pay, and the illusory character of the expectation held out to her that she might repay her debt by the redemption of the shares she held in the plaintiff company. This, however, is but an argument against the •economic value of building associations generally. The brief of the learned counsel is witty and clever; and were the question of the general advantages, and benefits of associations like the plaintiff, under consideration before a body where the discussion even of grave questions must be relieved by some play of wit and fancy, his brief might be efficacious and secure for the counsel a more attentive hearing than a dry, logical argument. Submitted to á judicial tribunal, however, the great bulk of it is far aside the mark.

The decision in the Court of Appeals in Concordia Savings & Aid Association v. Read (93 N. Y. 474) leaves but two legal questions raised by the appellant to which it is nécessary for us to refer. The corporate existence of the plaintiff is challenged, principally on the ground that some time anterior to the transaction which is the subject of this, suit, the number of its members and of its outstanding shares fell below the requirements of the articles of association. We do not- think that this would effect, jper se, the dissolution of the corporation, but it is not necessary to discuss the proposition. The plaintiff’s incorporation is not claimed to have been terminated or lapsed by anything occurring since the execution of the'bond and mortgage. As to its character and condition at that time the appellant is estopped from asserting that it is not a corporation, having contracted with it as such. (Eaton v. Aspinwall, 19 N. Y. 119; The Buffalo & Allegany R. R. Co. v. Cary, 26 id. 75; Whitford v. Laidler, 94 id. 145.) The second objection made is that the premium which the defendant agreed to pay for the loan was not the result of competition among the members of the association, but was fixed arbitrarily in advance by the trustees. The act under which the plaintiff was incorporated (§ 7) provided that the imposition of any premium for loans made to members should not be deemed a violation of the provisions of law against usury. This is the only reference to premiums to be found in the statute. In the absence of any statutory requirement on the subject, we think that the exaction of a premium and its amount were matters that could be determined by the corporation itself. Subsequent statutes of this State have regulated this matter as to corporations formed under them, and the act of 1851 has been repealed by section 192 of chapter 705 of the Laws of 1894. From the operation of such repeal,, however,- existing associations incorporated under earlier acts are expressly excepted. In 1889 the Attorney-General of the State advised the Banking Department that it was not necessary in case of corporations organized under the act of 1851 that the premiums paid for loans should he fixed by competition. We think: that the rule thus declared by the law officer of the State, on the faith of which business has been transacted for over ten years,, should not be overruled unless it appears clearly to be wrong.

The judgment 'appealed 'from should be affirmed, with costs.

All concurred, except Bartlett, J., not sitting.

Judgment affirmed, with costs.  