168 S.E. 378 | W. Va. | 1933
This is a notice of motion for judgment by E. L. Morrison, as receiver of the Bank of Fayette, against the Fayetteville Building Loan Association, a corporation, to recover the withdrawal value of stock owned by the bank in the association. Judgment for defendant was rendered on an agreed statement of facts, as hereinafter recited, and plaintiff prosecutes error.
January 26, 1931, the commissioner of banking closed the Bank of Fayette because of insolvency, and on March 5th, following, appointed Morrison receiver. It owned 106 shares *392 of "paid up" stock in the Fayetteville Building Loan Association, of the par value of $100.00 each, and owed the association, as one of its depositors, $24,127.24. The by-laws of the association permit a stockholder, by giving four weeks notice, to withdraw the par value of his stock, provided not more than 50% of the net income of the association shall be used in paying the withdrawal, and authorize the board of directors to require the surrender of all paid-up stock certificates by paying to the holders the face value thereof, plus accumulated dividends. The receiver, by written notice to the association, March 14, 1931, demanded the withdrawal value of the stock. It refused to comply, contending that it was entitled to set-off against the debt, an equal amount of the claim due it as a depositor of the bank.
The right of set-off thus asserted must be determined from the mutual status of the bank and the association at the time the receiver was appointed. The receiver of an insolvent bank succeeds to the rights of the bank, "which must be determined by the facts and circumstances existing at the date of his appointment; he can claim no higher right than the bank itself." Williams v. Burgess,
The member of a building and loan association is not a creditor of the association, in the sense of being able to enforce his right of withdrawal, before the maturity of notice (or at least the filing thereof), of his election to demand the withdrawal value of his stock. 9 C. J. 941; 4 R. C. L. 357; 35 L.R.A. 290 (note); and Thompson and Blackledge on Building Loan Associations, p. 335. It would seem, however, that he is, prior to notice, such creditor of the association *393 as will entitle it, in the event of his insolvency while indebted to the association, to set-off against the withdrawal value of the stock his indebtedness to it.
Building Loan Association v. County Court,
The Colorado statute provides that in making up the amount of credits which any person is requested to list for taxation he shall be entitled to deduct from the credits all bona fide debts owing to any other person. HELD, that, where a savings association issued stock to its members, which was payable to the stockholders, with profits or dividends, on demand, subject only to the association's rights to limit the aggregate withdrawals during any one month to one-half the amount received by the association in the same period, such stock was a debt of the association, which it was entitled to deduct from its credits in determining the amount of its taxable property.Board of Commissioners v. Fidelity Savings Association (Colo.),
In Indiana, the statute, relating to corporations in general, makes all stock, except as otherwise provided by law, taxable in the corporate name. A section thereof provides that building, loan-fund, and savings associations shall be assessed on *395
the surplus of receipts over loans, and declares that neither said association nor the stockholders therein shall be liable to other taxation on said shares of stock. HELD, that this was not a limit on the right to further tax the holders of stock, or those to whom building associations were indebted, and that it was proper to tax a nonborrowing member for his holdings, which are in the nature of a credit, and it was immaterial whether the stock was fully paid up. "It is quite clear, we think, (the court said), that one who deposits his money with an association subject to call at any time upon reasonable notice, and who may receive the interest upon or earnings of the money so deposited, is a creditor to the extent of such deposit and interest or earnings, and, although his credit may be evidenced by a certificate of stock or other writing, he is nevertheless a creditor, and his holdings, whatever called or however evidenced, constitute a credit." Harn v. Woodard
(Ind.),
The Massachusetts statute, creating co-operative saving and loan associations, provided that the shares of stock shall be paid for in monthly installments, and that when the amount paid in by any member reaches $200.00, the shares shall be paid off; and that members may withdraw unpledged shares at any time upon giving thirty days' notice. In Atwood v. Dumas (Mass.),
The Illinois statute provided that a shareholder of a building and loan association might at any time, upon proper notice, withdraw and demand and receive from it the withdrawal value of his stock; and further that "no share shall be transferred while any debt, penalty or due of any kind, against the owner thereof, may remain unpaid". In Wetherell v.Thirty-First Street Building Loan Association,
We agree with the holding in the foregoing cases that the right of a member of a building and loan association to withdraw the value of his stock constitutes a promise on the part of the association to pay money, although contingent upon the giving of notice by the member of his election to exercise the right, and upon the further provision that not more than one-half of the net income of the association shall be used in paying withdrawals. There is no apparent difference in principles between this case and Williams v. Burgess, cited. In each, the bank, at the time of the appointment of the receiver, held an undue promise, to pay money, of the depositor asserting the right of set-off.
We, therefore, affirm the judgment of the circuit court.
Affirmed.