Friendly Society – Building Society – Effect of Winding-up Order on Position of Members – Right of Member to Pay up Loan and Withdraw under Rules – Act 37 and 38 Vict. c. 42 – Building Societies Act 1874, sec. 14.
The rules of a building society entitled a member who had received a loan from it to withdraw from the society on payment of the balance of the loan. The society, which had no debt to creditors other than its own members, went into voluntary liquidation, and obtained a winding-up order. Held ( alt. judgment of Second Division) that the effect of the winding-up order was to take away the option to withdraw given by the rules to a member who had obtained a loan, but ( aff. judgment of Second Division) that such a member was entitled to be free from his liability as a contributory of or debtor to the society on paying the balance of the loan unpaid at the date of the winding-up order.
Citations:
[1883] UKHL 481
Links:
Jurisdiction:
Scotland
Banking
Updated: 03 July 2022; Ref: scu.636760