Eastern Building Loan Association of Syracuse v. Bright Williamson

• Decision Date: 23 March 1903
• Docket Number: No. 152,152
• Citation: 23 S.Ct. 527,189 U.S. 122,47 L.Ed. 735
• Parties: EASTERN BUILDING & LOAN ASSOCIATION OF SYRACUSE, New York, Plff. in Err. , v. BRIGHT WILLIAMSON
• Court: U.S. Supreme Court

189 U.S. 122

23 S.Ct. 527

47 L.Ed. 735

EASTERN BUILDING & LOAN ASSOCIATION OF SYRACUSE, New York, Plff. in Err.,

v BRIGHT WILLIAMSON.

No. 152.

Argued January 28, 1903.

Decided March 23, 1903.

This action was commenced on January 12, 1898, in the circuit court of Darlington county, South Carolina, by Bright Williamson against the Eastern Building & Loan Association of Syracuse, New York, to recover the face value of twenty-five shares of stock in the defendant association, less a sum theretofore borrowed by the plaintiff from the association. Judgment in his favor for the full amount claimed was rendered in the trial, affirmed by the supreme court of the state (62 S. C. 390, 38, S. E. 616), and thence brought here on this writ of error.

The case is similar to that of the same plaintiff in error v. Ebaugh, 185 U. S. 114, 46 L. ed. 830, 22 Sup. Ct. Rep. 566. Here, as there, the stock certificates contained an absolute promise to pay 'the sum of one hundred dollars for each of said shares at the end of seventy-eight months from the date hereof.' Here, as there, circulars were shown to the plaintiff to induce his subscription, one of which contained this statement:

For the investor.

This association issues three classes of certificates, designated as instalment, paidup, and fully paid. All of which are guaranteed to mature in six and one half years.

Amply secured by first mortgages on real estate.

Paid-up stock doubles in six and one half years.

Fully paid certificates guaranteed.

Quarterly dividends, 7 per cent per annum.

For the borrower.

This association has no auction sales.

No bidding for loans.

And a definite time for repaying a loan.

Another, the following:

"Only association giving investor and borrower definite maturity contract in seventy-eight months. Only association issuing definite contracts."

The defendant pleaded that there was no absolute promise to pay at the end of seventy-eight months, but only an estimate of the time at which the stock would mature; that an absolute promise to pay at the end of seventy-eight months was inconsistent with the nature of the corporation as a mutual company, and against the provisions of its charter and by-laws, and also illegal by the laws of New York, under which the company was incorporated.

On the trial before a jury, defendant, in support of its answer, introduced the charter and by-laws of the company, the statutes of New York under which it was incorporated, certain decisions of the courts of that state, and the testimony of the assistant secretary and actuary of the defendant that the shares of stock had not, in fact, matured; also the deposition of its general attorney, who, after affirming his familiarity with the law of that state regarding building and loan associations, of which, as he said, he had made a special study, testified that, under the defendant's articles of incorporation and by-laws, and the laws and decisions of New York, the heretofore-referred-to clause in the certificate of stock 'is not to be construed or held as a guaranty period of maturity, but, on the other hand, an estimated period,' and that the association is not required to pay the face value of the certificates until 'the amount paid by the plaintiff on his shares of stock, augmented by the earnings apportioned and credited thereto, equal the par value.' Upon this testimony, the defendant asked the court to charge the jury that full faith and credit must be given to the laws of New York as construed by its courts, and that by reason thereof, 'under the terms of the contract of membership, and the contract of loan, by-laws, and charter, the transaction between the plaintiff and defendant does not terminate merely upon making a fixed number of payments, but only when the dues paid in by him, with the profits apportioned to his shares, make them equal their par value of $100 per share.' Other instructions of a similar nature, or looking to the same result, were also asked, but all were refused.

Messrs. William Hepburn Russell, William Beverly Winslow, and D. A. Pierce for plaintiff in error.

Mr. H. E. Young for defendant in error.

Mr. Justice Brewer delivered the opinion of the court:

The Federal question presented arises on the contention that the South Carolina courts did not give 'full faith and credit . . . to the public acts, records, and judicial proceedings' of the state of New York, as required by § 1, art. 4, of the Constitution of the United States.

Courts of one state do not take judicial notice of the laws of another state, whether written or unwritten. They must be proved as facts. Talbot v. Seaman, 1 Cranch, 1, 38, 2 L. ed. 15, 27; Livingston v. Maryland Ins. Co. 6 Cranch, 274, 3 L. ed. 222; Ennis v. Smith, 14 How. 400, 426, 14 L. ed. 472, 484; Pierce v. Indseth, 106 U. S. 546, 551, 27 L. ed. 254, 256, 1 Sup. Ct. Rep. 418; Chicago & A. R. Co. v. Wiggins Ferry Co. 119 U. S. 615, 622, 30 L. ed. 519, 522, 7 Sup. Ct. Rep. 398; Lloyd v. Matthews, 155 U. S. 222, 39 L. ed. 128, 15 Sup. Ct. Rep. 70; Eastern Bldg. & L. Asso. v. Ebaugh, 185 U. S. 114, 121, 46 L. ed. 830, 833, 22 Sup. Ct. Rep. 566; Nashua Sav. Bank v. Anglo-American Land, M. & A. Co. 189 U. S. 1, ante, 517, 23 Sup. Ct. Rep. 517.

The law of New York was so proved in this case, and the contention is that it was not rightly construed by the South Carolina courts; that the law of New York which entered into and formed a part of the contract sued on was not given by those courts the same force and effect that it had in New York, and that hence the rights secured by the Constitution of the United States to the plaintiff in error were denied. If it appeared that the South Carolina courts, without questioning the validity, simply construed a statute of New York, no Federal question would be presented. Glenn v. Garth, 147 U. S. 360, 37 L. ed. 203, 13 Sup. Ct. Rep. 350; Lloyd v Matthews, 155 U. S. 222, 39 L. ed. 128, 15 Sup. Ct. Rep. 70; Banholzer v. New York L. Ins. Co. 178 U. S. 402, 44 L. ed. 1124, 20 Sup. Ct. Rep. 972; Johnson v. New York L. Ins. Co. 187 U. S. 491, ante, 194, 23 Sup. Ct. Rep. 194.

But it is contended that the construction of the New York statutes as applicable to this contract was shown by the decisions of the courts of that state and the opinion of one learned in its laws; that there was no contradictory testimony, and, therefore, it was the duty of the South Carolina courts to find as a fact that such was the true construction.

The promise to pay $100 at the end of seventy-eight months is plain and unambiguous. It is a positive promise to pay at a fixed time. The circulars presented by the company to the plaintiff as an inducement for his subscription only emphasize the certainty of the promise. So, if the inquiry were limited to the mere language of the promise and the representations which led up to it, but one decision was possible. It is said that the promise made in the certificate is expressly based upon 'full compliance with the terms, conditions, and by-laws printed on the front and back of this certificate;' that one of the conditions expressed on the face of the certificate is: 'The shareholder agrees to pay, or cause to be paid, a monthly instalment of 75 cents on each share named in this contract, the same to be paid on or before the last Saturday of each month until such share matures or is withdrawn;' that it contained this further stipulation: 'Payable in the manner and upon the conditions set forth in said terms, conditions, and by-laws hereto attached,' and that these matters thus referred to had the effect of changing the absolute promise to a conditional one. All these were received in evidence, and when so received it became a matter of judicial construction to determine whether they had such effect, and that was a question which, nothing else being shown, was for the consideration of the courts in which the litigation was pending. In like manner, after the decisions of the courts of New York were received in evidence, their meaning and scope became matters for the same consideration. While statutes and decisions of other states are facts to be proved, yet when proved their construction and meaning are for the consideration and judgment of the courts in which they have been proved. Nor is the rule changed by the testimony given in the deposition of defendant's counsel, for, as he states, his opinion is based on the statutes, the articles of incorporation, and the decisions admitted in evidence, together with similar decisions of other states under like statutes, articles of incorporation, and by-laws. No witness can conclude a court by his opinion of the construction and meaning of statutes and decisions already in evidence. Laing v. Rigney, 160 U. S. 531, 40 L. ed. 525, 16 Sup. Ct. Rep. 366. The duty of the court to construe and decide remains the same. It must be remembered that the effort here made is to change the obligations which the defendant apparently assumed by the issue to plaintiff of its certificates of stock, and to justify such change by its articles of...