23 Ind. App. 175 | Ind. Ct. App. | 1899
Appellee was plaintiff below, and by his complaint it appears that he subscribed for five shares of the capital stock of appellant association, which shares were $100 each; that the dues upon such stock were $3.50 per month; that he paid all of his dues each month, beginning such payments in September, 1891, and continued to and including the month of April, 1894; that he paid in all for dues on said stock $112; that when he made his last payment in April, 1894, he notified the board of directors of appellant association that he wished to withdraw therefrom, and asked that he receive the amount paid in on his stock, less all fines and other charges thereon, with six per cent, interest; that he has “waited more than three months, but that no part of said •money has been paid or tendered to him by the officers of said corporation.” A demurrer for want of facts was overruled, and appellant excepted. Appellant answered in two paragraphs; (1) a general denial, and (2) that by the by-laws of the association, which is the contract between appellant ■and appellee, the appellee agreed to pay seventy cents monthly on each 'share- of his stock, and in default thereof for more than' four months such stock shall lapse and the amount paid in shall be transferred to the funds of the association. The answer further avers that in April, 1894,. appellee defaulted in the payment of his monthly instalments, since which time he has never made any payments thereon, and that by reason, of such failure said stock lapsed and had been transferred to the other funds of the associa
The appellant has assigned errors as follows: (1) That the court erred in overruling the demurrer to the complaint; (2) that the complaint does not state facts sufficient to constitute a cause of action, and (3) that the court erred in overruling the motion for a new trial. The first and second specifications of the assignment of errors'may be considered together.
The complaint proceeds upon the theory that appellee was entitled to recover of appellant the amount paid into its treasury upon his stock, less any and all fines and other charges thereon, upon his withdrawal. The right of a member of a building and loan association to withdraw from it, upon certain conditions, is a statutory right, and the manner of his withdrawal and the terms thereof, are likewise fixed by statute. §3410 Horner 1897. The language of the statute is: “Any stockholder wishing to withdraw from such corporation may do so upon three months’ notice given to the board of directors, when such withdrawing stockholder shall be entitled to receive thé amount paid in upon the stock to be withdrawn, less all fines and other charges thereon: Provided, that when the withdrawal occurs after the expiration of one year from the beginning of the series in which the stock to be withdrawn was issued, he shall receive in addition to the amount paid in, less fines and other charges as aforesaid, at least legal interest on each instalment paid from the date at which the same was payable: Provided, that at no time
Appellant’s learned counsel urge that the averments of the complaint do not show that the conditions prescribed by statute by which appellee might withdraw his stock existed when he attempted to withdraw, and hence, for a failure to show such conditions, the complaint is bad. It is first claimed that' it is not averred that his shares of stock were not held “subject to á lien for the payment of unpaid instalments or other charges.” The complaint shows that appellee became the owner of his shares of stock in September, 1891; that he made his monthly payments beginning with September, 1891, and continuing to and including the month of April, 1894, and that he paid each month the sum of $3.50. It seems plain that under these allegations there could have been no lien in favor of the association for unpaid instalments, for it clearly appears that appellee had paid all instalments upon his stock as they became due. It is further charged that when he paid his last instalment he notified the board of directors that ho wished to .withdraw, and asked that he receive back the amount paid in upon his stock, less all fines and other charges, together with interest, etc. If appellee paid the instalments on his stock as they became due, we are unable to see what lien the association would have upon his stock for unpaid instalments and “other charges.” In any event, if the association had any such lien, it was unnecessary for appellee to aver the same, but it was
Another provision of the statute is that “no stock shall be withdrawn which is at the time held in pledge for security.” Appellant insists that the complaint is bad for a failure to aver that appellee’s stock was not at the time “held in pledge” for security. It is urged that appellee may have become a borrower, and his shares of stock held in pledge for security. Where a stockholder in a building and loan association has borrowed money on his stock, it is npt a debatable question but what such association would hold such stock “in pledge for security.” It is equally clear that under such facts the stockholder would not be entitled to withdraw from the association, nor entitled to any of the rights of a withdrawing stockholder, until he should redeem his stock from such pledge. These questions were settled in the case of Anderson Building, etc., Ass. v. Thompson, 88 Ind. 405. These objections which appellant urges to the complaint do not seem to us to be well taken. These objections thus urged are exceptions to the statutory right of the stock
Mr. "Works, in his Pleading and Practice, at §365, says: “It was a rule of pleading at common law that if an exception in a statute appeared in the enacting clause, the declaration must show that the plaintiff, or the action brought, was not within the exception; but ydiere the exception appeared in the proviso, it was not necessary to notice it in the complaint. The rule is thus stated: The rule usually laid down upon this subject is that where matter is introduced by way of exception into a general clause, the pleader must show that the particular case does not fall within such exception; whereas a proviso need not be noticed by him, but must be pleaded by the opposite party. The difference is, where an exception is incorporated in the body of the clause, he who pleads the clause ought also to plead the exception; but when there is a clause for the benefit of the pleader, and afterwards follows a proviso, which is against him, he should plead the clause, and leave it to the adversary to show the proviso. * * * The test is, whether the exception is necessary to be alleged to constitute a cause of action. If so, it must be averred, no matter in what part of the statute it occurs.” See, also, Stephen Pl. 443.
The right of a stockholder to withdraw from a corporation is a statutory right, at least in cases of this character. Here the statute confers upon him that right, and specifies what he shall receive in return. After granting to him this right, and placing upon him the necessity of giving the corpora
Another objection urged to the complaint is that there is no averment that there were funds in appellant’s treasury which could be applied to the payment of appellee’s demand for withdrawal. Upon this question, the authorities are not in accord. Our own courts have not had the question before them in any reported case we have been able to find. In Heinbokel v. National, etc., Assn., 58 Minn. 340, 59 N. W. 1050, the exact question here presented was raised and decided in harmony with appellant’s contention. The Minnesota statute, under which that .case arose, was very similar to our statute, and the provisions relating to a stockholder’s right to 'withdraw were in all essential particulars like ours. The Minnesota statute provided that not more than one-half the amount received on stock should be used to pay withdrawals without the consent of the board of directors. A by-law of the association contained a similar provision. In the course of the opinion the court said: “Can a nonborrowing member of a mutual building association, who has brought himself within the rales by notice of withdrawal, be permitted to bring an action and take judgment against the association Avhen, by reason of the statute and the by-laws, there is no money in the treasury legally applicable to the payment of his claim?” This inquiry the-court answered in the negative, and its conclusion was, to use its own language: “It follows that there must be proper-allegations in the complaint and proof upon trial as to the existence of funds out of which payment can properly be made.” In Maloney v. Real Estate, etc., Assn., 57 Mo. App. 384, the same conclusion was reached. These are the only eases we have been able to find which hold squarely to the above rule.
The supreme court of Pennsylvania, in a well considered
IVe think these cases rest upon sounder reason.and stronger equity than the cases holding the contrary doctrine, and follow them as being in harmony with both the' letter and' the spirit of our statute. The fact that the statute gives a member the right to withdraw, upon, specified conditions, carries with- it the necessary .'and corresponding dirty of the association to make reasonable provision for carrying out, the provisions of the statute. Some of the authorities go so far as to hold that it is the duty of the association to keep-itself, as far as practicable, and in accordance with the dictates of experience and reason as to the probable amount-required for withdrawals, in readiness to meet their demands. See Endlich on Bldg. Associations, §113; Wolfe v. Saving Assn. 75 Hun 201, 27 N. Y. Supp. 44; National, etc., Assn. v. Hubley, supra.
If the position of appellant is correct, then a withdrawing member of an association of this character would be left to the mercy and caprice of the association; for it is evident that if the directors-so desired, the treasury of the association would be kept without funds, and thus the-rights of the with
It is next urged that the complaint- is bad because a copy of the constitution' and by-laws of the association was not filed as an exhibit. It is sufficient answer to this to say that such constitution and by-laws did not constitute the foundation of the action. The action was based upon the statutory right to withdraw, and was for the recovery of the amount appellee had paid in, less fin'es and charges, together with the accrued interest. It was unnecessary for him to file a copy of the constitution and by-laws as an exhibit to his complaint. Some other objections to the complaint have been suggested, but we think they are frivolous and not well taken. While the complaint might have been fuller in detail and more specific in some particulars, it stated a cause of action, and there was no error in overruling the demurrer to it.
In- its motion for a new trial appellant assigned sixteen reasons. The first reason assigned is that the verdict is not sustained by sufficient evidence. The second does not present any question, and the third is that the verdict is contrary to law. The first and third reasons may be considered together.
Appellant urges that the evidence wholly fails to show that appellee notified the board of directors that he wished to withdraw his stock. The statute makes it obligatory upon a member who wishes to withdraw to give to the board of directors three months’ notice, etc. It was necessary for the complaint to aver that such notice had been given, and as this was a material averment, it follows that it was necessary for appellee to .prove that such notice had been given. If the evidence fails to show that such notice was given, then
The evidence wholly fails to show the required statutory notice to appellant’s board of directors of the intention or wish of appellee to withdraw, and as this failure relates to a material question of fact, the verdict is not sustained bv sufficient evidence. Hpon the essential fact of notice, there is absolutely no evidence to support the verdict, and where there is no evidence to support the verdict, then such verdict is an error of law which may be reviewed and corrected in the appellate tribunal. Deal v. State, 140 Ind. 354, and cases there cited; Robbins v. Spencer, 140 Ind. 483. As this conclusion leads to a reversal of the judgment, other questions presented by the record need not be noticed. The judgment is reversed, and the court below is directed to sustain appellant’s motion for a new trial.