179 A. 242 | Pa. | 1935
Receivers of the Mortgage Building and Loan Association, successor to the Hoover Building and Loan Association, appointed by the Federal District Court, brought suit against Rebecca Wenger on a promissory note for *75 $3,500, loaned to her by the latter association October 16, 1929. Fifty shares of stock of the same association were pledged by her as collateral security.
The merger agreement whereby the Hoover Building and Loan Association, the Mortgage Building and Loan and other associations became one, thereafter known as the Mortgage Building and Loan Association, provided among other matters that the shares of the capital stock of the merged association, when exchanged in substitution for the shares of the constituent companies, could not be withdrawn for a period of twenty-four months from the date of the approval of the merger agreement by the secretary of the Commonwealth. This agreement was submitted for approval of the stockholders of each of the constitutent companies at a meeting held for that purpose on March 30, 1931. Rebecca Wenger did not attend this meeting in person, but gave a proxy to vote her stock at that meeting, granting to her proxy "full power and authority to act for [her] and . . . to vote upon the adoption or rejection of a joint agreement of merger . . . and the transaction of all such other business as may come before the said meeting, as fully and effectively as [she] could do if personally present. . . ." Her proxy attended the meeting and voted in favor of the merger agreement.
In 1932 when the merged association was admittedly solvent, appellant wrote to the Mortgage Building and Loan Association asking for the blanks necessary to be filled out for the purpose of withdrawal of her stock, and stating that she wished "to withdraw from the Hoover Building and Loan Association and receive all moneys due [her]." No further notice or action was taken by her, nor was any demand made for an appropriation of the value of her stock to the payment of her note; the letters thereafter from her attorney stating her intention "to make arrangements whereby the stock can be credited on account of the loan," were not considered as a direction to appropriate. Her request for withdrawal was not *76 acted on by the association, although it was endorsed by the secretary's clerk "Withdrawal" on January 27, 1932. At that time her shares were valued at $7,303, her note with interest and dues amounted to $3,635, leaving a balance in her favor of $3,668.
On February 4, 1935, the receivers appointed by the Federal Court were ousted by the Supreme Court of the United States (Pa. v. Williams,
The appellant contends that the proxy given by her did not authorize the holder to vote in favor of a merger agreement with a clause limiting the right of withdrawal from the merged company; that any limitation contained in the merger agreement on the right to withdraw was contrary to applicable statutes and against public policy and that the provisions of such statutes cannot be waived; that, even if the limitation on withdrawals is valid, there was no restriction on her right to appropriate the value of her stock to payment of her loan, and her withdrawal notice should be treated as a request for such appropriation, which right of appropriation was not affected by subsequent insolvency of the association.
The first contention is without merit. There was no limitation on the powers of her proxy, the relevant provisions of which are quoted above. She cannot now, when the rights of third parties are materially changed, attempt to limit or restrict the general power given and confine it, contrary to its plain language, to a mere power to adopt or reject those particular provisions of the merger agreement which deal simply with the mechanical details of the merger. Moreover she continued to pay her dues and interest on her loan to the merged association *77 without objecting to any provision in the merger agreement.
It is urged that the agreement restricting the rights of withdrawal for a period of twenty-four months is in violation of the Act of April 29, 1874, P. L. 73, section 37, which provides that any stockholder in a building and loan association shall have power to withdraw from the association. The precise question is whether shareholders may waive for a limited time the right given by this statute. Appellant contends the statute contains a declaration of public policy and is such that the persons for whom the benefit was created cannot waive it by voluntary act or otherwise. See Bosler v. Rheem,
The power of a shareholder to withdraw from a building and loan association is rather a privilege than a right. It was not until the Act of April 12, 1859, P. L. 544, that any right of withdrawal was provided for in the statutes of this State. This right was later carried over to the Act of April 29, 1874, supra, and now appears in the Building and Loan Code of May 5, 1933, P. L. 457, section 612; see Judge KELLER'S opinion in Morris Resnick B. L. Assn. v. Barnes,
Appellant was a borrowing member and such members are expressly excluded from the withdrawal feature conferred *79
by section 37 of Act of 1874, supra. She could, however, if the association were solvent, appropriate the value of her stock to the indebtedness, receiving the excess, if any; in this way she could accomplish the same result without paying her note and then withdrawing: Act of April 10, 1879, P. L. 16, section 4, as amended by the Act of April 30, 1929, P. L. 901; Orient B. L. Assn. v. Freud,
Judgment affirmed.