and purposes of building and loan associations and in particular it is alleged

And purposes of building and loan associations and in

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and purposes of building and loan associations; and in particular, it is alleged that they are, in the main, held by well-to-do people purely for purposes of investment and not by wage-earners for accumulating their modest savings for the building of homes. In the articles of incorporation we find the special shares described as follows: " 'Special' shares shall be issued upon the payment of 80 per cent of their par value in cash, or in monthly dues of P10. The 20 per cent remaining of the par value of such shares shall be completed by the accumulation thereto of their proportionate part of the profits of the corporation. At the end of each quarter the holders of special shares shall be entitled to receive in cash such part of the net profits of the corporation corresponding to the amount on such date paid in by the holders of special shares, on account thereof, as shall be determined by the directors, and at the end of each year the full amount of the net profits available for distribution corresponding to the special shares. The directors shall apply such part as they deem advisable to the amortization of the subscription to capital with respect to shares not fully paid up, and the remainder of the profits, if any, corresponding to such shares, shall be delivered to the holders thereof in accordance with the provisions of the by-laws." The ground for supposing the issuance of the "special" shares to be unlawful is that special shares are not mentioned in the Corporation Law as one of the forms of security which may be issued by the association. In the agreed statement of facts it is said that special shares are issued upon two plans. By the first, the subscriber pays to the association, upon subscribing, P160 in cash, on account of each share. By the second, the shareholder, upon subscribing, pays in cash P10 for each share taken, and undertakes to pay P10 a month, as dues, until the total so paid in amounts to P160 per share. On December 31, 1925, there were outstanding 20,844 special shares of a total paid value (including accumulations) of P3,680,162.51. The practice of El Hogar Filipino, since 1915, has been to accumulate to each special share, at the end of the year, one-tenth of the dividend declared and to pay the remainder of the dividend in cash to the holders of shares. Since the same year dividends have been declared on the special and common shares at the rate of 10 per centum per annum. When the amount paid in upon any special share plus the accumulated dividends accruing to it, amounts to the par value of the share (P200), such share matures and ceases to participate further in the earnings. The amount of the par value of the share (P200) is then returned to the shareholder and the share cancelled. Holders of special and ordinary shares participate ratably in the dividends declared and distributed, the part pertaining to each share being computed on the basis of the capital paid in, plus the accumulated dividends pertaining to each share at the end of the year. The total number of shares of El Hogar Filipino
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