207 Wis. 260 | Wis. | 1932
The following opinion was filed January 12, 1932:
The demurrer is .on the ground of insufficiency of facts pleaded. The complaint states that the plaintiff corporation, hereinafter called the bank, loaned to one Erz, treasurer of the defendant, hereinafter called the association, a sum of money in excess of the value of a matured certificate for ten shares of the. stock of the association held by him and took the certificate assigned in blank as collateral. On maturity of the certificate the bank demanded payment of its value, which was less than the amount of its loan to Erz. The association refused payment. The complaint also alleges notice of the pledge of stock to the association prior to the commencement of' the suit.
If this were all there was to the complaint, the complaint would be sufficient, providing building and loan stock may be lawfully pledged as security for a lóan. Appellant claims that such stock cannot lawfully be so pledged. A priori it may be, under the general rule that all manner of personal property may be so pledged. 21 Ruling Case Law, p. 634. We would have to take judicial notice of any statute prohibiting such pledging, but no statute is called to our attention which expressly prohibits it. Sec. 215.15, Stats., is cited, but it does not say that such stock may not be so pledged. Sec. 215.26 declares what articles or by-laws building and loan associations must adopt, among which is one prescribing the manner and condition of transfer of shares and one prescribing the terms and conditions upon which loans may be obtained, paid, and canceled, which manifestly applies to loans by the association. It does not inferentially follow from either of these provisions that a
It is also contended that a corporation cannot become an owner of building and loan stock because sec. 215.20 provides that only natural persons may become “members” of a building and loan association. The most that can be claimed under this section is that a corporation cannot become a member of an association and vote shares held by it at a meeting of the association. It does not expressly, and we consider that it does not inferentially, bar corporations from holding shares as collateral security. Although banks are not authorized to deal in stocks, they may take them as collateral security. Corn Exch. Nat. Bank v. Kaiser, 160 Wis. 199, 151 N. W. 259. With greater reason may they take as collateral building and loan shares which are merely promises to pay money.
The complaint therefore states a cause of action unless the pleader has defeated the effect of the allegations first stated by pleading other facts. The other facts alleged are in brief that Erz got the association to loan him. money on the pledged stock, without delivering the certificate to ..the company to hold pending payment of the loan as the by-laws
Counsel for respondent does not dispute the general rule that payment of an assigned chose in action without notice of the assignment discharges the obligor as to the assignee, but contends that under the provisions of the by-laws set out in the complaint providing when loans are made by members they shall deposit their shares with the association and that on payment shares shall revert to the association and be canceled, the general rule should not be applied to building and loan shares assigned as collateral. It is urged that these provisions if followed would protect assignees of stock against payment to the original holder. So they would. But the provisions are not made for the benefit of the public. They are made for the benefit of the member and the association. The association may waive a provision
The complaint is considered insufficient for absence of an allegation that the payment, alleged was made after notice of the assignment of the certificate to the plaintiff.
By the Court. — The order of the circuit court is reversed, with directions to sustain the demurrer.
. A motion for a rehearing was denied, with $25 costs, on March 8, 1932.