I.—Name and Objects of Society.

The Society shall be called the "Manawatu Permanent Equitable Building and Investment Society."

II.—Entrance Fee, Expense of Management, and Admission of Members.

Every Member of the Society holding capital or investment shares shall pay an entrance fee of Two Shillings and Sixpence per share taken up and also One Shilling additional on entrance and on the monthly payment day in March of each succeeding year in advance for working expenses in respect of each and every share held by such Member whether such share shall have been realised or not: Provided always that persons withdrawing investment shares for the purpose of taking up capital shares with the monies received on so withdrawing shall not be liable to pay entrance fees on such capital shares.

Minors (with the consent of the parents or guardians) may become investing members of the Society but shall not be allowed to vote or hold any office and may sell out or withdraw, and their receipt or that of their parents or guardians on their behalf shall be good discharge to the Society for all monies therein expressed to be received, and such parents or guardians may vote at meetings.

Females may also become Members and shall be entitled to vote but not to hold any office.

III.—Change of Residence of Members.

Any Member changing his place of abode shall within one month thereafter give notice thereof in writing to the Secretary and state his new place of residence.

IV.—Monthly Meetings.

The Society shall as heretofore meet on the last Saturday in every month for the purpose of receiving subscriptions and other payments at the Offices of the Society, Palmerston North, or at such other place as the Board of Directors may from time to time appoint.

V.—Annual Meetings.

The Society shall meet not later than the first week in the month of May in each year at the Offices of the Society in the Township of Palmerston North, or such other place as the Board of Directors may from time to time appoint, when the Annual Report shall first be read and received, and Directors shall then be elected according to rule VII.

VI.—Special Meetings.

The Chairman may call a special meeting of the Board of Directors at any time stating its objects. Any three of the Directors may also call a special meeting of the Board upon giving three clear days' notice thereof to the Chairman or Manager and stating its objects.

The Chairman on receiving a written memorial signed by thirty of the investment Members requesting him to convene a Special General Meeting of the Society, or on receiving notice of appeal from any Director removed from his office, shall within seven days after the receipt of such memorial or notice of appeal fix the time for such meeting to be held and direct the Manager to convene the same by advertisement in at least one Newspaper circulating in the County of Manawatu fourteen clear days before the time appointed for holding such meeting.

The Members or Directors (as the case may be) presenting such memorial or giving such notice of appeal shall, before such meeting is appointed, deposit with the Manager such a sum of money not exceeding Twenty Pounds as the Directors may think adequate to defray the expenses of such meeting, the same to be returned if the appeal be allowed or the resolution of the memorialists adopted.

Special General Meetings of the Members may at any time be also convened by the Chairman or any four of the Directors by advertisement in at least one Newspaper circulating in the County of Manawatu fourteen clear days before the time appointed for holding such meeting. No business shall be transacted at such meetings except that of which notice has so been given.

Twelve Investment Members shall form a quorum at any special or general meeting, and all decisions by majority of the votes of Members present at any meeting in conformity with these rules be binding upon all Members of the Society.

VII.—Management.

The Society shall be managed by a Committee not exceeding page 5 eight persons, to be called the Board of Directors, four to form a quorum, and one of whom may be appointed Managing Director with such salary as the Board shall think fit.

The four of the Directors who have been longest in office shall retire every year, but be eligible for re-election. Each Director shall be separately elected at the annual meeting, and any Member intending to offer himself as a new Director at any annual meeting shall give notice in writing thereof setting forth his name address and occupation to the Manager at least fourteen days previously to said meeting, and said notice shall forthwith be posted up in the office of the Society and advertised before the general annual meeting in one or more newspapers circulating in the District of Manawatu.

Every Director shall hold at least ten investment or capital shares in the Society and any Director shall forfeit his seat at the Board of Directors if at any time his payments are in arrears exceeding three months. Should any Director become bankrupt or insolvent or compound with his creditors he shall immediately cease to be a Director. Provided always that in the event of any vacancy occurring in the number of Directors during the current year of office the remaining Directors shall fill up their number provisionally until the next annual meeting, and such provisional Director shall retire at the same meeting at which the Director in whose place he was provisionally elected would have retired.

The Board of Directors shall elect a Chairman from their own body and such Chairman shall preside at all meetings of the Board of Directors and at all general or special meetings of the Society. In the event of the absence of the Chairman from any meeting of the Board of Directors or of the Society, the Shareholders present shall appoint a Chairman for such meeting. At every such meeting whether of Directors or Shareholders the Chairman for the time being shall have an original as well as a casting vote.

The Board of Directors shall meet at least once in every month at such time and place as may be from time to time agreed upon, to transact the general business of the Society, of which meetings at least three clear days' notice shall be given. At every meeting of the Board of Directors the minutes of the previous meeting shall first be read and confirmed, the bankbook shall then be produced and inspected and compared with the cash book, and their correctness declared and entered as the first minute.

The Board of Directors shall order a full statement of the Society's affairs, specifying in whose custody or possession the funds or effects of the Society shall be then remaining together with an account of all sums of money received and expended on account of the Society since the publication of the preceding periodical statement, to be annually prepared and audited seven page 6 days at least before the annual general meeting of the Members at which such statement is to be submitted, and each Member shall be entitled to receive upon application at the Society's office a copy of such statement as audited and a copy of the Directors' intended report one day at least prior to the general meeting for the submission of the same.

The Board of Directors shall order the payment of all monies due from or to be advanced by the Society and all payments above Two Pounds shall be made by them by cheque upon the Bankers signed by one Director and the managing Director, or if there shall not be a managing Director signed by two Directors and countersigned by the Manager or Secretary. They shall from time to time inspect the books kept by the Manager. They may if they shall think fit divide themselves into or appoint Executive Committees or an Executive Committee consisting of two or more Directors for the more convenient transaction of the business of the Society, provided always that the Chairman for the time being shall be ex officio a member of every such Executive Committee. The Board of Directors shall have the power to appoint agents or other officers with such remuneration for their services as they shall think fit. A sum may be voted at the annual general meeting to be paid to the Board of Directors for their services which sum shall be divided amongst them according to attendance. The Board may from time to time cause to be paid to any Director or Directors all or any portion of the actual expenses incurred by such Director or Directors in attending any meeting or meetings of the Board or in transacting any business of the Society.

No Director shall vote on any question which relates to his individual interest or conduct nor shall he be present when any such question shall be put to the vote.

The Manager, Secretary, Managing Director, Solicitors, and Bankers shall not be removed from their respective offices but by a majority of the Directors present at a special meeting called for that purpose, and whenever any of the officers shall resign or be removed from their said offices, a majority of the Directors present at a special meeting to be called for the purpose shall elect a successor or successors.

VIII.—Custody or Deeds.

All deeds writings or securities shall be made and taken in the name of the Society and shall after the registration thereof be delivered by the Solicitor to the Manager who shall give his receipt for the same and forthwith deposit them in strong boxes kept for the purpose at the offices of the Society, or such other place as the Board of Directors may appoint.

The Manager shall keep a register of the securities in the strong box which shall be annually compared with the deeds and certified to by the Auditors.

IX.—Survey.

The Board of Directors may from time to time employ any Surveyor or other person to examine any land and buildings offered as security, and in each case to furnish such evidence as the Board of Directors may require as to the condition and value thereof, the cost of which survey shall be borne by the Member applying to borrow.

X.—Seal.

A Seal bearing the device of a "Tree" shall be adopted by the Directors, and shall have the words "Manawatu Permanent Equitable Building and Investment Society," imprinted thereon. The Seal shall remain in the custody of the Managing Director, Manager or Secretary, and shall only be used in pursuance of a resolution of the Board of Directors, and affixed in the presence of at least one Director.

XI.—Duties Of Solicitor.

The Solicitor of the Society shall peruse and examine the title to all property from time to time offered as security and shall prepare the mortgages and other securities to be executed by the Members. Should the Solicitor be of opinion that the title to any property cannot be safely accepted by the Society he shall, if required by the Board of Directors, state the nature of his objections in writing to the Board of Directors, and the cost of investigating such insufficient title shall be borne and paid by the Member proposing the security.

XII.—Auditors.

The Members of the Society shall at every annual general meeting appoint two persons to act as Auditors of the accounts of the Society and to sign the annual statement of the Society; the remuneration for the Auditors' services to be fixed by the Members present at each annual general meeting.

The Auditors whose names are prefixed to these rules are the Auditors of the Society for the present year.

XIII.—Investment Shares.

Investment Shares shall be of the ultimate value of £50.

Every member shall on taking up any share or shares receive scrip for the same signed by two of the Directors and countersigned by the Manager or managing Director and bearing the seal of the Society.

Every Member holding an Investment Share shall pay on each such share the sum of Five Shillings per month until such share with interest and profits shall be of the value of Fifty Pounds, when it may remain at interest subject to the rules. The payment shall be made at the office of the Society or at the offices of such agents as the Board may from time to time appoint before or at the monthly meeting, and if at the latter, between page 8 the hours of ten and four in the day and seven and nine in the evening.

Every Member neglecting to pay the subscription shall he fined for each share as follows :—3d. for the first month, 9d. for the second month, 1s. 9d. for the third month, 3s. 3d. for the fourth month, os. 3d. for the fifth month, and 7s. 9d. for the sixth month, and thereafter a fixed rate of 3s. per month per share. Every member continuing to neglect the payment of his monthly subscriptions until the fines incurred thereby shall equal all the monies invested by him exclusive of the entrance and other fees, shall thereupon cease to be a member of the Society and shall forfeit his interest therein. If any member shall be in arrear in respect of his subscriptions or fines for more than one month, every payment that shall afterwards be made if not sufficient to discharge the whole thereof shall be applied first to the liquidation of fines, afterwards for the first monthly subscription due, and then in discharge of each subscription in arrear.

All scrip which shall be issued by the said Society in respect of the Investment Shares hereafter taken up between the 1st day of March and the 31st day of August in each year shall bear date the 1st day of March in such year, and all scrip which shall be issued in respect of shares taken up between the 1st day of September in one year and the last day of February in the succeeding year shall bear date the said 1st day of September, and all applicants for such shares shall on taking up the same pay an amount equal to the subscriptions that would have been payable in respect of such shares had the same been taken up on the 1st day of March, or on the 1st day of September as the case may be, preceding such application, with interest on such subscriptions at such rate as may be from time to time fixed by the Directors from the dates at which they would have been payable.

The Board of Directors may in their discretion receive subscriptions on investment shares in advance and may allow such discount on such payments as they shall from time to time determine.

Whenever the money available for allotment shall exceed the amount required for purposes of the Society, the Board of Directors may (at a special meeting of the said Board to be convened for that purpose) resolve that no shares shall be issued for such period as shall be determined at such meeting, and a copy of such resolution shall forthwith be posted in the office of this Society.

The Directors may also from time to time issue fully paid up shares at the value of Ten Pounds each in such quantities and at such times as they shall think fit. Such shares shall be called Capital Shares, but the term Investment Members shall include the holders of capital shares as well as of investment shares.

XIV.—Withdrawals.

Any Member desirous of withdrawing his investment shares shall be allowed to do so, on giving three months' notice in writing to the Manager, and shall be entitled to receive the amount of the subscriptions actually paid by him to the Society upon such investment shares, and if the application to withdraw shall be made at any period subsequent to the end of the first year from the date of the first subscription, the Member or Members so withdrawing shall be entitled to receive interest thereon at such rate per cent, per annum as the Board of Directors may from time to time fix, but the rate so payable shall not be less than five pounds per centum, per annum, calculated from the end of the first year: Provided always that the total amount to be so withdrawn during any given period may from time to time be limited by the Board of Directors : Provided

always that the Board may waive the necessity of giving three months' notice of intention to withdraw in the case of any shareholder who binds himself to take up capital shares with the monies received by him on withdrawing his investment shares.

Should several Members give notice to withdraw at one time, they shall be paid in rotation, according to the priority of notice: Provided always that the representatives of deceased Members shall have precedence, and after them the holders of shares which shall have been paid up to £50.

Capital shares shall not be capable of being withdrawn.

All amounts due and fines incurred previously to the notice of withdrawal shall be deducted from the amount which the member shall be entitled to receive.

XV.—Interest and Profits.

Interest on Capital Shares shall be allowed at the rate of £7per cent, per annum, payable to the holders thereof on the 28th day of February and the 31st day of August in every year.

Interest shall be allowed on Investment Shares at the rate of £7 per cent, per annum, and shall be added to each share monthly, the amount added each month being one-twelfth of a year's interest on the value of a share at the beginning of a year.

After provision for interest on the capital and investment shares, the profits shall be divided in the following manner:—One-fourth shall be carried to a reserve fund, and the remaining three-fourths divided proportionately between the capital and investment shares. The profits on the capital shares shall bo paid annually, but on the investment shares shall be added to their value as hereinafter mentioned.

At the close of the third financial year of the Society and of each succeeding year all investment shares of three years' standing shall, subject to the provisions of the foregoing clause, be entitled to an equable proportion of the profits which shall page 10 be then and afterwards annually added to their value, until such accumulated profits together with the subscriptions and the £7 per cent, interest added from year to year as above mentioned shall make up the sum total of £50, when such sum shall be paid over to the shareholders, but no profits shall be allowed on any fractional part of a year. But no profits shall be paid or added as above mentioned except upon the certificates of two competent persons to be appointed by the Board for the purpose and paid out of the funds of the Society.

The remaining one-fourth shall be carried to the credit of a fund to be called "The Reserve Fund," which shall accumulate and be appropriated as the Board of Directors may from time to time determine, subject nevertheless to the approval of the annual meeting.

XVI.—Transfer of Investment Shares.

Any Member on giving notice in writing to the Manager, and on payment of all subscriptions, fines, and arrears then due from such Member on all shares held by him, shall be at liberty to sell or transfer his investment share or shares or any of them on payment of a transfer fee of 2s. 6d. for each share. Every transfer shall be countersigned by the Manager and registered at the office of the Society, and shall be in the form of Schedule C, appended to these Rules. Capital shares may also be transferred in the same way.

XVII.—Borrowing Powers.

As often as it shall be deemed advisable it shall be lawful for the Board of Directors to accept money on deposit, borrow money pursuant to the power and up to the limits conferred by section 12 of the "Building Societies Act, 1876," and to issue deposit receipts or debentures in respect of such monies, or to execute or cause to be executed any such document or documents as may be necessary or expedient for giving security to the lender over any of the property or securities of the Society, such deposit receipts, debentures or documents to bear the common seal of the Society, to be signed by two Directors, and countersigned by the managing Director, Secretary, or Manager for the time being. And for any sum so deposited with or borrowed by the Society it shall be lawful for the Board of Directors to pay interest out of the funds of the Society at any rate not exceeding Ten Pounds per centum per annum, and the funds for the time being of the Society, and all property of or belonging to the Society shall be security for and primarily liable for all monies so borrowed.

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.

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.

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.

XIX.—Pow'er to Sell, Exchange, or Redeem Property in Mortgage.

If any member shall sell any premises in mortgage to the Society, it shall be lawful, on payment by such member of all arrears then due from him to the Society, for the purchaser, on payment of a transfer-fee in respect of each share to take the same, chargeable with the debt due to the Society, and the purchaser shall thenceforth become answerable to the Society for the payment of the subscriptions, fines, and other payments, as the same shall become payable, without prejudice to the liability of the original mortgagor for such payment; and the Directors may, at the request and cost of such member, release him from all liability in respect of such share or shares.

If any member shall be desirous of having his property discharged from a mortgage, it shall be lawful for such member to transfer the mortgage to some other premises which the Board of Directors shall page 17 deem of adequate value, and upon having his share or shares, or so much as shall be then due in respect thereof, secured on such other premises, the Society shall, at the cost of the member requiring the same, release and convey the property for which such other premises shall be substituted, and make such endorsement on the mortgage as hereinafter mentioned.

If any such member shall desire to redeem the property which ho shall have mortgaged to the Society, he shall give notice thereof to the Manager or Managing Director, and the Board of Directors shall within one month thereafter inform such member the total amount due from him to the Society for principal interest and other payments, and upon payment thereof the Society shall subject (as hereinafter mentioned) release such member from all liability, and deliver up to him all securities held by the Society, and the Society shall at the cost of such member endorse a receipt or acknowledgment on such mortgage deed or security. But in case the Society shall hold from any member two or more mortgages, such member shall not have power to redeem or transfer any one property alone without the consent and concurrence of the Board of Directors. The Board of Directors shall not be obliged to release any security without receiving payment of three monthly instalments by way of forfeiture in addition to the amount due on such mortgage.

XX.—Depreciation or Property.

It shall be lawful for the Board of Directors at any time without notice when in the opinion of the Board the property given as security by any member has been injured by him or is suffering depreciation through mismanagement or from any cause whatever to enter upon and take immediate possession for the use of the Society.

XXI.—Extension- or Reduction of Payments.

If any member who has obtained a loan from the Society shall be desirous of reducing or extending the term of years for which the loan is made and shall give notice of such his desire to the Board and shall pay all fines and subscriptions due, and all legal survey and other charges due by him to the Society, it shall be lawful for the Board to reduce or increase the term of years for which the loan is made, with such corresponding increase or reduction of the monthly payment as the case may require for any period not exceeding twelve years from the time of application.

XXII.—Triennial Investigation.

Immediately preceding the close of every third year of the Society, or at such other time as may be determined, the Board may, if they deem it desirable, cause a survey to be made of any of the properties they hold as security for advances, and obtain a report of the then value of the same, for which survey and report such fee shall be paid as the Board may decide.

XXIII—Lunacy of Investment Members.

In the event of any investment member becoming a lunatic, or of unsound mind, no fine shall (during such lunacy or unsoundness of mind) be exacted for arrears of subscriptions on any investment share or shares he may hold, but a committee or guardian of such afflicted member, legally appointed, shall be entitled (after the expiration of page 18 twelve calendar months from the commencement of such affliction) to receive the full value of the investments of such member, but in case there shall be no committee or guardian legally appointed, then the party representing such afflicted member shall be entitled after the first year, but not previously, to receive the amount of such investment shares, deducting such fines as may have been incurred by such member previously to the time of his becoming lunatic or of unsound mind, subject however to any and every condition the Board of Directors (for the security of this Society) may think proper to require from the party applying for the withdrawal of such investments on behalf of the said lunatic or mentally-diseased investment member.

XXIV.—Death of Investment Members.

In case of an investment member dying, no right or benefit of survivorship shall be had or claimed by the surviving members of the Society, but the investment share or shares and interest of such deceased member shall go, and belong, to his executors or administrators, who shall have and take as much benefit by, from, and under these rules as the deceased member might have had in case he had been living. Such executors or administrators of the deceased member may vote and act in all cases whatsoever as fully as the deceased member whom they represent might have done if living, nevertheless one executor or administrator only shall vote, and if two or more claim to vote, preference shall be given to the one whose name has priority in the probate of the wills or letters of administration. Provided that if no probate or letters of administration be produced to the Board of Directors at any monthly meeting within two months after the decease of such member, then the Board of Directors shall be at liberty to pay or distribute the investment of the said shareholder, if the same shall not exceed the sum of Twenty pounds, to his widow or children, or next of kin, as the Board of Directors shall think fit, subject to any conditions the Board of Directors, for the security of the Society, may think proper to require from the parties receiving the money.

XXV.—Death or Lunacy of Borrowing Members.

In case of the death or insanity or lunacy of any borrowing member having a share or shares in this Society and upon the application of the widow wife or legal or other apparent representative of such deceased lunatic or insane member, the Board of Directors at their discretion may allow such widow, wife, or representative to redeem the whole or any portion of the property held by the Society as security for such shares upon the payment of a sum equal to the present value of the future monthly payments due to the Society on account of such shares, and upon such payment being made, together with all fines and expenses due in respect of such share, the Society shall release the property held as security for such share or shares, and deliver up the deeds relating thereto.

XXVI.—Application and Payment of Fees, Fines &c.

All the payments by way of fees and fines that may be made by any member or members, are to be considered as part of the assets of the Society, and to be employed in the increase of the general fund, and the same shall be paid with and in addition to the next monthly subscription money. All payments which shall become due from any page 19 member for or on account of his share or shares when the mode and time of payment are not hereinbefore prescribed shall be made in one sum at the next monthly meeting, unless the Board of Directors shall consent that the same may be paid by instalments.

XXVII—Balloting of Shares.

Whenever there shall be no application for loans or advances, the Board of Directors may, instead of investing as hereinbefore provided after payment of all borrowed money determine upon a ballot taking place of all the investment shares, and the Board of Directors shall pay to such persons whom the ballot shall determine liable to receive the share or shares so to be balloted for the full value thereof at the time of such ballot, and the member shall receive such value accordingly and no more. Previous to such ballot fourteen days' notice thereof shall be posted up in the office of the Society and advertised in one or more newspapers circulating in the District of Manawatu.

XXVIII.—New Rules and Alteration of Rules.

Any rule herein contained, or rule hereafter to be made, may bo altered rescinded or repealed, and any other rule or rules may be passed at a general meeting of the investment members, specially called for the purpose.

XXIX. —Mode of Voting.

No number of shares shall confer more than five votes.

At any general meeting members may vote by proxy, such proxy to be appointed by writing: Provided always that no member who shall not have paid at least three monthly subscriptions shall be entitled to vote in respect of such shares at any meeting.

XXX. —Reconveyance.

When the whole of the subscriptions fines and other payments on any realised share or shares have been paid by any member, the Society shall, if requested, endorse upon the mortgage given to the Society by such member a receipt for all monies intended to be secured thereby in the form pursuant to "The Building and Land Societies Act, 1866," as set forth in Schedule E appended to these Rules, and shall deliver up the same with all other deeds and documents relating to such mortgage which shall have been deposited with them by such member, subject nevertheless to the provisions contained in these Rules. Provided always that any member shall be entitled to a reconveyance of the property mortgaged at his own cost.

XXXI.—Offices.

The Board of Directors may purchase with the funds of, and on behalf of, this Society, and hold land with or without a house, and erect thereon a house and offices for the business of the Society, and page 20 may at any time sell and execute a conveyance of the said house and land to any purchaser or purchasers thereof.

XXXII.—Arbitration.

In case of any matter or dispute between this Society and any person claiming under it, and any member or person claiming on account of any member, reference of such matter shall be made to two Arbitrators one to be chosen by the Board and one by the person claiming, and if a third arbitrator, to be chosen by such two.

XXXIII.—Construction of Rules.

In the construction of these these, unless there be something in the subject or context repugnant to such construction, every word importing the singular number only shall mean and include several persons and things as well as one person or thing and the converse, and every word importing the masculine gender shall mean and include a female as well as a male, and the words month and monthly shall mean a calendar and not a lunar month.

XXXIV.—Rules.

Each member shall be furnished on application with a copy of these Rules, for which he will pay the sum of one shilling and sixpence.

XXXV.—Preliminary Expenses.

The Board of Directors shall have power to defray all expenses and disbursements incurred in the formation of the Society.