124 Tenn. 119 | Tenn. | 1910
delivered the opinion of the Court
It is not necessary to state this case any further than to say that the relator, the Standard Trust Company, is a Delaware corporation, with its principal place of business in the city of Birmingham, Ala., and is engaged in selling to the public what it denominates a “home-purchasing contract.” This contract is similar in its terms and conditions to the business ordinarily done by building and loan associations organized under the laws of this State, as defined in section 2 of chapter 114 of the Acts of 1895. But the relation between the relator and purchasers of its contract is not mutual.
The relator filed a copy of its charter with the secretary of state on January 15, 1908, and paid to that official a privilege tax of $150 and a filing fee of $20, and, assuming that this entitled it to transact business in Tennessee, it opened an office in the city of Memphis, and commenced soliciting business. Soon thereafter the defendant, acting under chapter 114, Acts of 1895* as amended by chapter 126, Acts of 1897, sought to and did exercise jurisdiction over the business of the relator, and forbade it to do business in this State until it came within and submitted to the jurisdiction of the office of the defendant, as prescribed by the statutes above mentioned. The relator, after much correspondence with the defendant, filed a petition with him praying that a license be issued to it to do business in this State; but, for reasons not necessary here to be stated, this was refused, and the
Chapter 114, Acts of 1895, is entitled: “An act to provide for the examination and supervision of building and loan associations doing business in the State of Tennessee.” Section 2 thereof is as follows: “That the name ‘building and loan association’ as used in this act, shall include all corporations, societies, organizations or association doing business in this State under a building and. loan charter, or engaging in a building and loan business.” Chapter 126, Acts of 1897, amended the foregoing section so as to make it read as follows : “That the name of ‘building and loan association,’ used in this act, shall include all corporations, societies, organizations or associations doing business in this State under a building and loan charter, or engaged in a building and loan business, or engaged in seeking investments from the citizens of the State by selling forms of stock, debentures, certificates, etc., on plans similar to building and loan associations, but which need not necessarily be mutual.”
It is conceded that the latter act is amendatory only, although its title is broad enough to include original legislation upon the subject therein indicated. The ques
We think there can he no doubt but that the substitution of section 1 of the act of 1897 for section 2 of the act of 1895 will make the body of the latter act, when so amended, broader than its caption. Its caption is limited to the examination and supervision of building and loan associations, and section 2, as originally passed, defined such associations as those “doing business in this State under a building and loan charter, or engaged in a building and loan business.” The amended section extends the provisions of the act so as to include all “corporations, societies, organizations or associations doing business in this State under a building and loan charter, or engaged in seeking investments from citizens of the State by selling forms of stock, debentures, certificates, etc., on plans similar to building and loan associations, but which need not necessarily he mutual.”
The distinguishing characteristic of building and loan associations in the law of this State is that they are mutual. In McCauley v. Building & Saving Association, 97 Tenn., 421, 37 S. W., 212, 35 L. R. A., 244, 56 Am. St. Rep., 813, it is said that: “It is only so far as they serve
In Province v. Bldg. & Loan Ass’n, 104 Tenn., 458, 58 S. W., 265, it is said: “The theory on which associations like the present are organized, and the rule of law as applied to them by all the cases, is that they are mutual in their character, and the members share in common gains and losses.”
“Strict mutuality and equality of benefits and obligations must he kept the groundwork and basis of these associations, and, if they are not so founded, they are not truly building and loan associations entitled to the protection given such associations by the statutes.” McCauley v. Building & Saving Association, supra.
“Membership in a building and loan association is acquired by the ownership of stock.” Setliff v. Nashville, etc., Association, 39 S. W., 546.
The amendment to section 2 of the act of 1895 does not fall within the purview of its title, and there is no attempt in the amendatory act to enlarge the original title. Building and loan associations, as defined by this court, prior‘to and at the time of the passage of this amendatory act, were based upon the principle of mutuality. Without this feature, they would not be tolerated for one moment. But for the chance that the shareholder has to earn dividends upon his shares to offset inter
The term “building and loan associations,” as used in the title of the original act, will he given the legal significance that attached to such term under the law at the time it was employed. This means associations doing a building and loan business based upon the principle of mutuality between the association and its members, and in which membership is obtained through the ownership of its shares, and equal privileges and opportunities of obtaining loans of its funds are granted to every shareholder upon reasonable terms prescribed for the regulation of all members. It is foreign and incongruous to the purpose of the act to inject into it all other corporations, societies, organizations, or associations engaged in seeking investments by selling forms of stock, debentures, or certificates, whether they are mutual or not. Hyman v. State, 87 Tenn., 109, 9 S. W., 372, 1 L. R. A., 497; Railroad v. Byrne, 119 Tenn., 285, 104 S. W., 460.
The result is that section 1 of the act of 1897 is unconstitutional and void. It was only by virtue of this amendment that the defendant assumed jurisdiction and