30 Mont. 351 | Mont. | 1904
prepared tbe following opinion for tbe court:
Section 120, Code of Civil Procedure, relating to replications, jDrovides: “Where the answer contains a counterclaim * * * the reply must contain a general or specific denial of each of the material allegations of the counterclaim, controverted by the plaintiff, or of any knowledge or information thereof sufficient to form a belief.” This section of the Code was amended by the Act of February 22, 1899 (Laws of 1899, p. 112), so as to read: “Where the answer contains a counterclaim or any new matter the plaintiff * * * shall * * * reply to such counterclaim or new matter, denying generally or specifically each allegation controverted by him.” This amendment eliminates' from the law that part of the statute ■which reads, “or of any knowledge or information thereof sufficient to form a belief,” and also adds to the section the statement, “or any new matter.” The pleading must conform to' the requirements of the statute, and where the legislature amended the law by striking out that provision which granted peimission to deny, by alleging a, want of information, it was the undoubted intent that that form of pleading should be eliminated, so far as the same related to the replication. This form of denial is therefore insufficient as a denial, and these allegations of the answer must stand admitted to the same extent that they would be if no attempt to deny them had been made.
It is further denied by plaintiff that that which purports to be the by-laws printed on this certificate are in fact the by-laws of this association. Whether they are in fact the by-laws of the association is immaterial. They are a part of the written contract existing between the shareholder and the association, and were given to- him by the association as the by-laws, and were, for that reason, proper evidence in the case.
Certain letters were introduced, one of which was written by the secretary to another shareholder, dated April, 1895, in which the secretary acknowledged the receipt of dues, and stated that the old stock, which matured in five years, contained conditions which were deemed burdensome, and that other stock was issued to mature in seventy-eight monthSj and that all except six shareholders had made the exchange. He alsoi pointed out that this was advantageous to the shareholders. In view of the fact that the by-laws make of the secretary the custodian of the books and records of the association, and charge him with the transaction of business relative to the issue and cancellation of stock, shareholders had a right to rely upon this letter as official, and it was admissible as showing that the company was at that time transacting business, and that the definite1 contract of maturity in five years did exist between the association and its original shareholders.
_ The plaintiff introduced but one witness to prove the insolvency of the association. The record contains the general statement made by the witness that the company had been in sol vent, “ever since after the first year that they were in business, namely, the year 1890.” The only evidence appearing, however, from which this general conclusion is drawn, is the following : “At the end of each year they would balance, and say ‘by dividend account’ so much money. As a matter of fact they never had a dividend account. They did not have any money. Their account at the bank was always in red; that is, it was
It must be kept in mind that “a building and loan association” ordinarily does not have outside creditors, as do general corporations; and where there is a deficiency of assets there is no insolvency in the proper sense of the word, but merely a loss of capital stock and- security, and depreciation of the stock held by the members. (Thompson on B. & L. Ass’ns, Sec. 120; note Knutson v. Northwestern Ass’n, 67 Minn. 201, 69 N. W. 889, 64 Am. St. Rep. 410; Towle v. Ass’n (C. C.), 61 Fed. 446.)
This evidence relative to the insolvency of the association is very indefinite, and possesses no claim to either precision or direction. The fact that the association was $15,000 in arrears, as shown by one of its books, on the 1st of January, 1895, is not sufficient to charge either the association or Anderson with knowledge of any insolvency either at the date the certificate was issued or the mortgage was released. There is no pretense that the $2,300 borrowed from the bank was not repaid, nor is there any attempt made to state the amount still claimed to be due to Mr. Wilson. Whether that amount is $1 or the full amount minus $1 is not stated. Insolvency is a question of fact, and must be sustained by the evidence. It is never presumed. The facts and admissions appearing in this record are conclusive that this association was transacting business up to the time that this mortgage was canceled; that it
At the beginning' or head of this certificate of stock are the words: “Date of issue; July 1, 1890. Maturity July 1, 1895.” Further on appear the statements: “This union matures its stock at a definite and stipulated time. * * ® This stock has no surrender value and cannot be withdrawn until it fully matures. * * * This stock matures at a fixed and definite time. * * * This union matures its mortgages at a fixed and definite time. * * * In consideration of the admission fee, together with the agreement and full compliance with the terms, conditions and by-laws printed on the front and back of this, certificate, which are hereby referred to and made a part of this contract, the National Loan & Savings Dnion agrees to pay to said shareholder * * * the sum of one hundred dollars for each of said shares at the end of five years from the date hereof. * * * This certificate of shares, is issued to and accepted by the shareholder upon the following terms and conditions which are hereby assented to by the shareholder.” The terms and conditions are sixteen in number, of which, for the purpose of this case, it is necessary to set out only the following: “(1) The shareholder agrees to pay a monthly installment of seventy cents on each share named in the certifi
This contract was of appellant’s own framing. It was not an informal, hastily prepared memorandum, but was. part of a carefully devised plan of business. The promise of the corporation was positive and unequivocal that it would, at the expiration of five years, pay to the subscriber the sum of $100 for each share. If this was intended merely as an estimate, it Was an easy thing to say so. -We must assume, therefore, that in thus preparing its contract the appellant intended to bind itself to the payment of the stipulated sum in the stipulated time, or it deliberately framed the instrument- and issued its printed literature to deceive prospective members, and borrowers with an apparent promise to that effect. We cannot assume that any
It is admitted that Anderson did comply with all these terms and conditions; that he did pay the seventy cents per share for sixty months; that he did pay the twenty-five cents per share for fifty months; that he did pay the interest and premium on his loan for the full sixty months ; that he did pay the cancellation fee of three dollars per share; and it further appeal’s from the evidence and by admissions that the association released this mortgage in regular form, delivered the note to' Anderson, accepted the cancellation fee of $120, duly canceled the stock, so that Anderson from that time on was not recognized as a stockholder, and had no voice in the conduct of the company's affairs. In fact, he complied with his contract in every particular. About three years after that time it was discovered that the association was unable to mature its stock and to comply with its contract with its members, and a receiver was appointed. Nearly two years later this suit was instituted to compel Anderson or his representatives to pay the full amount of this mortgage, with interest and attorney's fees. But no offer whatsoever is made to refund to Anderson’s estate the cancellation fee which he had already paid, nor to restore the certificate of stock which had been canceled, that the estate might thereby participate in the division of such funds as remained. The result of such a judgment would be that, notwithstanding Anderson had paid all that he ever agreed to pay, and had ceased to' be a member of the corporation, still he must pay in the full amount of his mortgage, with interest thereon from July 1, 1895, in order that the amount to be distributed among the other shareholders might be augmented by that sum, but that
The authorities are practically a unit in holding’ that, where a member of a building and loan association has made full settlement, and withdrawn therefrom, such settlement and withdrawal cannot be set aside by the association without a showing of fraud or of bad faith in some form. In Reitz v. Hayward, 100 Mo. App. 216, 73 S. W. 374, the court says: “The law, therefore, does not, in theory, permit withdrawals after an association is insolvent; but, if the surrender of stock was perfected while it was still a going concern, though in fact insolvent, it is an executed transaction, and the proceeds may be retained, unless fraud can be imputed to the withdrawing stockholder.” (Book's Appeal, 109 Pa. 592, 1 Atl. 36; Strohen v. Association, 115 Pa. 273, 8 Atl. 843.) “After he has been paid off on his withdrawal, and there is a final settlement between him and the society, in the absence of mutual mistake or fraud he can not be compelled to make good a deficiency occurring before the withdrawal, and discovered before the winding up of the association.” (Thompson on Building Associations, p. 285, and cases; 4 Am. & Eng. Eney. Law, 1052; Endlich on Building Associations, Sec. 108; Coltrane v. Association (C. C.), 110 Fed. 281.)
It appeal’s from the record in this case that Anderson made full settlement with this corporation, and withdrew therefrom by the cancellation of his stock years before any insolvency was discovered; and the record contains no evidence of fraud on the part of Anderson, and we cannot assume that he acted with any fraudulent intent. (Code of Civil Procedure, Sec. 3266; Jones v. Simpson, 116 U. S. 609, 6 Sup. Ct. 538, 29 L. Ed. 742.)
It is unnecessary to determine the other question raised, as to whether the corporation had the authority to issue what is termed “definite contract stock,” this being- a completed transaction. As was stated in Leahy v. Association, 100 Wis. 555,
We do not find any error in this cause, and think the judgment and order appealed from should be affirmed.
For the reaspnst stated in the foregoing opinion, the judgment and order are affirmed.