XVIII. —Investment of Money and Giving Security.

The funds of the Society shall be primarily invested on the mortgage of freehold and leasehold property, and the Board of Directors shall from time to time by resolution declare under which of the three Tables B, C, and D, they are prepared to receive applications.

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The Board of Directors are hereby authorised at any time to invest any portion of the moneys received by the Society in advances to any member of the Society upon security of any investment shares held by such member or members, and upon the same terms as to repayment as in case of advances upon freehold security, or the Board may with the consent of the Society, to be testified at a public meeting of the Society and entered in the general minute book, invest such portion of the monies received by the Society as shall not be required for its immediate purposes or use upon real or Government security in the name of the Society, and from time to time with such consent as aforesaid, to alter, transfer, and sell such securities, and all dividends and proceeds to arise from the monies so laid out and invested shall be regularly brought to account and shall be applied according to the Rules of the Society: Provided that no advance be made upon capital shares.

On payment to any member borrowing upon the security of his shares he shall transfer his scrip for such shares to the Society, in such form as the Board shall from time to time determine, as security for the repayment of the balance and interest, but such transfer shall not be liable to any transfer fee, and on payment of all the money secured to the Society by such transfer, such shares may be retransferred to the member entitled thereto, or the Society may issue fresh scrip in respect thereof.

If any member who shall have borrowed upon the investment shares shall make default in payment of his subscription and redemption monies in respect thereof, when such subscription and redemption monies together with any fines to which he he shall become liable shall together with the amount advanced to such member on such shares make up the amount per share which such member shall be entitled to be paid for withdrawal from the Society, then such share shall be absolutely forfeited to the Society.

The Board of Directors may in their discretion advance to any borrowing member any sum less than £50, and in any such case the share on which the advance is made shall be repaid by instalments bearing the same proportion to the instalments as set out in Table B, C, and D as the sum advanced bears to £50. Where in calculating such proportions fractions of a penny occur, a penny shall be paid instead of the fractional part. Fines to accrue on any such share shall remain the same as if the whole sum of £50 had been advanced.

When the Board of Directors shall consider it necessary they shall give publicity to the amount of money at their disposal for investment, and the same shall be offered to the shareholders in the order in which their applications are numbered. Each applicant shall give to the Manager a schedule in accordance with the form or Schedule B appended to these page 12 rules, setting forth his name, the amount required by him, full particulars of the nature and situation of the property offered as security, and at what rate per share per month, per three months, or per six months he desires to repay to the Society the principal and interest of such loan, and on such application being granted in full or in part, then he shall commence at the next monthly pay day subsequent to such application, or if the payments are three-monthly or six-monthly, then he shall commence at the next quarterly or half-yearly pay day as next hereinafter provided as the case may be, to pay such sum per share per month, per three months, or per six months as may be agreed upon, and such payments shall be made by such applicant whether his mortgage shall have been executed or not in terms of such of the subjoined Tables B, C, or D, as shall then be in force, which tables shall be considered as forming part of these rules : Provided that in case of repayments by quarterly or half-yearly instalments, if the first quarterly or half-yearly payment shall fall due within the period of three or six months from the date of such loan being completed, then the borrower shall be allowed interest at the rate of £6 per centum per annum upon the amount of such first payment for a period of time to be calculated from the quarterly or half- yearly pay day next preceding such completion.

Every borrowing member omitting to pay any instalment of principal and interest money shall be fined for each share as follows:—

And for every succeeding monthly pay day over which such default shall continue, the additional sum of 6s.

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That in the case of all advances made after the passing of these rules all three-monthly payments shall fall due upon the last Saturday in May, August, November, and February in each year, and half-yearly payments on the last Saturday in August and February in each year respectively.

When the Board of Directors shall be satisfied with the security offered by any member, they shall pay to such member the sum which he shall be entitled to receive upon his executing to the Society a deed of mortgage in such form and containing such powers of sale and other powers to the Society and such covenants on the part of the said mortgagor as the Solicitor of the Society shall require.

Members to whom advances have been allocated may, if they think fit, continue to hold their investing shares, or may withdraw the subscriptions to their credit with the interest and profits added thereon, in accordance with the Rule XV.

The mortgage to be given by the member to the Society shall provide that in case the said member shall at any time fail, neglect, or refuse for three monthly pay days, if such monies are repayable weekly or monthly, or if repayable by three- monthly or six-monthly payments for one month after any such periods of payment, to pay, observe and perform all or any of the subscriptions, payments, and regulations on his or their part respectively to be paid, observed, and performed, the Board of Directors for the time being shall have power, on behalf of the said Society, to appoint the Manager or any other person or persons to collect the rents and profits of the premises in such mortgage mentioned, and to charge for such collection, whether by the Manager or otherwise, a commission at the rate of £5 per cent, if the rent be payable quarterly or at longer periods, or £7½ per cent, if payable monthly, or £10 per cent, if payable weekly; and the Board of Directors shall have the power after default in payment of such subscription and payments for three months after any of the periods upon which such payments should have been made, in the case of monthly payments, and after such default for one month, in the case of three-monthly or six-monthly payments, or on the breach of any covenant on the mortgagor's part in any mortgage expressed or implied, whether the Board of Directors shall have entered into the receipt of the rents and profits of any such mortgaged property or not, and without entering into the receipt of such rents and profits, and without the consent or concurrence of the said mortgaging member, absolutely to sell and dispose of the said mortgaged premises by public auction or private contract upon condition that the purchaser or purchasers shall pay, as and for the purchase money of any such property, a certain payment in accordance with such of the Tables as may at the time of such sale be in force, in accordance with Rule XVIII., Clause 1 (to be fixed and determined by the Board of Directors) page 14 until the full amount due to the Society on such property be paid, or to make any arrangements with any member whose property shall be liable to be sold for his retention thereof and for the cessation of all fines upon subscriptions and redemption monies, fines, insurance premiums, and other payments then due and in arrear at the time of such arrangement, or thereafter to become due to the Society, or to sell and dispose of the same in one or more lots by public auction or private contract, or partly in one way and partly in the other, at one or more time or times, and subject or not to special conditions as to title or evidence of title or the time or mode of payment of the purchase money or otherwise as the Board of Directors shall think fit, and to receive the money arising therefrom. And at any sale by public auction the Board of Directors, or any one of them, or some other person to bo appointed by them in writing, may bid for and buy in the said mortgaged premises on behalf of the Society, and resell the same by public auction or private contract without being answerable for any loss to be occasioned by such re-sale, and out of the monies to arise from such collection of rents and profits of sale as aforesaid the Board of Directors shall in the first place discharge all costs and charges and expenses which shall or may be incurred in or on account of the collection of the rents and profits of the said mortgaged premises, or the sale or attempted sale or sales thereof, or in anywise relating to the exercise of the powers in the said mortgage, and in the next place shall retain and reimburse the said Society all such principal money, subscriptions, fines, and other payments as shall be then due, owing, and payable by such member under and by virtue of these Rules or the said mortgage, and shall pay the surplus (if any) to the said member, or as he shall appoint. And that the receipt of the Board of Directors or Manager of the said Society shall be a sufficient discharge to all tenants and purchasers paying any money to the Board of Directors or Manager, without their being accountable for the misapplication or non-application thereof, and that no purchaser or purchasers shall be bound to enquire into the propriety or regularity of any such sale or sales, nor whether any such default shall have been made. And that until the said mortgaged premises shall be sold and conveyed the Board of Directors shall have full power to let and demise the same, or any part thereof, for such terra of years, and at such rent, and upon such conditions of re-entry as they shall think fit.

If any Member who shall have taken upon mortgage to the Society any principal money, repayable either in one sum or by other instalments than those referred to, shall make default in payment of the principal money, or of any instalments thereof, or of the interest thereon or of any part thereof, the Directors shall have the like power of management of dealing with and settling and disposing of the property in mortgage, and with the page 15 like indemnity to and irresponsibility of purchasers as is hereinbefore provided in the case of default of payment of weekly or monthly instalments.

No property shall be deemed sufficient security for monies to be advanced, which shall be subject to any previous mortgage, except to the Society.

When any member shall be desirous of building, he shall be entitled to receive the monies agreed to be advanced to him in such sums and at such times as the Board of Directors may appoint upon executing the mortgage.

Should any member after receiving any portion of his loan or advance, not proceed to complete or finish any building upon which the same shall have been advanced, to the satisfaction of the Board of Directors or the Society, the Manager shall give seven days' notice in writing to such member of their intention either to sell such premises in the manner hereinbefore provided or to employ some person or persons to finish and complete the same at the cost and charges of such member, and upon the expiration of such notice they shall be at liberty so to do and to advance and pay the sum and sums of money requisite for such purpose accordingly, and the premises shall be charged with such further sums with interest at such rate as the Directors shall from time to time determine as if such sums had formed part of the advance of such member. If a sale shall be made and a surplus remain after paying all money due to the Society, and all incidental expenses it shall be paid to such member.

All buildings mortgaged to the Society shall be insured from loss or damage from fire in the name of the Society for such amount as the Board of Directors shall think necessary by and at the expense of the Mortgagor, and the policy and renewal receipts shall be deposited with the deeds. Should the Mortgagor fail to do so the Manager or Managing Director shall be at liberty to insure the property in the name of the Society or (if already insured) may pay the premium due on such policy out of the Society's funds, but the money so expended, together with fine of 1s per month in the pound shall be paid to the Society by the Mortgagor.

If the Mortgagor is not bound by covenant to insure in any particular office, the insurance may be effected in any Fire Insurance Office, subject to the approval of the Board of Directors. Each member who shall have mortgaged any property to the Society shall be required to give immediate notice in writing to the Manager of any trade carried on in any part of his premises, or of any stove, furnace, or any article erected therein, or of any such similar change in the character or occupation of the adjoining properties which would in any way affect the validity of the policy of assurance. Any member neglecting to give such notice shall pay such fine as the Board of Directors may determine, not exceeding 10s per week nor less than 1s. page 16 per week, for each share advanced. The Board of Directors shall as often as they may deem requisite appoint one or more of their number to obtain all the information they can with respect to trades, &c., carried on in or about such property, and the members shall permit the Directors so appointed to inspect the mortgaged premises and reimburse them all reasonable expenses.

"Whenever any property mortgaged to the Society shall sustain damage by fire, the Board of Directors for the time being shall receive the amounts recoverable for the damage so sustained from the insurance office in which such property shall have been insured, and shall give a receipt for the same, which receipt shall be a sufficient discharge to the person or persons liable by virtue of any policy of insurance to pay such money, and the same shall be applied according to the covenant (if any) under which such insurance was effected, but if none, then the Board of Directors shall have the option of appropriating such money in payment and satisfaction of the money secured by the mortgage of the premises which shall have sustained such damage, or of repairing the damage so sustained and returning any surplus to the mortgagor.

If any member, who shall have borrowed upon his investment shares, shall make default in payment of his subscription and redemption moneys in respect thereof, when such subscription and redemption moneys, together with any fines to which he shall become liable, shall, together with the amount advanced to such member on such shares, make up the amount per share which such member shall be entitled to be paid for withdrawal from the Society, then such shares shall become absolutely forfeited to the Society.

Whenever a Member shall apply for a loan and shall fail to provide security to the satisfaction of the Board of Directors they may after two months from the date of application declare the same to have lapsed.