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All the loans made by a building and loan association to its stockholders becomes immediately payable, when the building and loan association becomes insolvent. In such a situation, its affairs are liquidated by a receiver or by the Secretary of Banking. After a building and loan association passes into the hands of a receiver, the duties of the receiver are to wind up the affairs of the building and loan association, and this is done in an equitable manner.
The following is an example of case law defining a building-and-loan association:
Building and loan associations are organizations with the object of accumulating money from their members. The money is then collected in periodical payments into the treasury thereof, to be invested, from time to time, in loans to the members upon real estate for home purposes. [Security Bldg. & Loan Asso. v. Spurlock, 65 F.2d 768 (9th Cir. Ariz. 1933)].