14 A.2d 98 | Pa. | 1940
Some of the facts in regard to the relations between the Northwestern Trust Company and the Christian A. *7 Fisher Building and Loan Association have been set forth in the preceding opinion (in re appeals Nos. 352, 353, 354, 355, Jan. T., 1939). It must here be added that, at the time when the Secretary of Banking took possession of the Trust Company, on July 17, 1931, it was the owner of stock in that Association, the paid-in value of which, on April 1, 1933, when the Secretary of Banking took possession of the Association, amounted to $52,194.40; of this amount $24,875 represented installment stock, $20,000 full-paid stock, $2,539.40 stock which had been assigned to the Trust Company and was left after the appropriation of so much thereof as was necessary to pay stock loans of the assignors, and $4,780 stock which had been declared matured. At the time of the closing of the Trust Company, however, none of the stock had matured, nor had any notice of withdrawal been given.
At the audit of the first and partial account of the receiver of the Association the court refused to allow him to set off the deposit balance which the Association had with the Trust Company against the claim of the latter for the value of its shares in the Association or against the liquidating dividends paid by the Association on such shares. From the decree of the court to that effect the receiver of the Building and Loan Association appeals.
The rights of parties to a set-off are determined as of the time of the closing of the insolvent institution and the appointment of a receiver: Gordon, Secretary of Banking, v.Anthracite Trust Co.,
It is argued by the receiver of the Building and Loan Association that stock of such an association has a status different from that of an ordinary corporation in that its owner may, under certain circumstances, withdraw from the enterprise, and therefore the stock here involved had a potential withdrawal value which existed when the Trust Company passed into receivership. It is true that if the conditions exist which entitle a stockholder in a building and loan association to withdraw he may do so after a specified time following notice to that effect and thereby acquire the status of a quasi creditor of the association. But this right is strictly limited; it depends upon the amount of funds then in the treasury and upon the solvency of the association, and if the withdrawal of the stockholder would result in giving him a greater share of the assets of the association than could then be obtained by all the other shareholders the withdrawal would not be permitted. Since the assets of such an association consist principally of mortgages and real estate, the valuation of which depends upon appraisals, it is evident not only that it is extremely difficult, in the absence of actual liquidation, to determine at any given time the real withdrawal value of the stock, but that such determination, if made, would necessarily be subject to modification if more accurate information in regard to the assets were later obtained, and especially if insolvency of the association subsequently occurred.
When the Northwestern Trust Company went into receivership on July 17, 1931, none of the stock which it owned in the Building and Loan Association had matured, nor had it given any notice of withdrawal. While there was an ultimate obligation of the Association to pay the Trust Company, as a shareholder, the proportion of the Association's assets to which it might at *11 some time be found to be entitled, no relation of debtor and creditor then existed. If the Trust Company's stock in the Association had been declared matured, or had notice of withdrawal been previously given and the circumstances were such that a withdrawal would have been legally enforceable, the fact that the amount payable on the stock might have been ascertainable only by a process of liquidation might not in itself have been fatal to its availability as a set-off, but, under the facts as they existed, there was then no actionable claim of the Trust Company against the Association and therefore no right of set-off. Nor, since such right must exist at the time of the declaration of insolvency or not at all, can a set-off be allowed of the Association's deposit with the Trust Company against the liquidating dividends subsequently paid by the Association, because these dividends were determined by what was left of the assets of the Association in its insolvency proceedings after the payment of its general creditors; they resulted from conditions arising long after the declaration of the Trust Company's insolvency, and did not represent the maturing of a debt which existed at the time of the Trust Company's insolvency, for, as already pointed out, no such debt then existed.
The decree of the court below is affirmed, the costs to be divided equally between the receiverships of the Trust Company and the Christian A. Fisher Building and Loan Association.