257 N.W. 684 (Wis. 1934), State ex rel. Cleary v. Hopkins Street Bldg. & Loan Ass'n

Citation:257 N.W. 684, 217 Wis. 179
Opinion Judge:EDWARD T. FAIRCHILD, J.
Party Name:STATE EX REL. CLEARY and others, Plaintiffs, v. HOPKINS STREET BUILDING & LOAN ASSOCIATION and others, Defendants. RELIANCE BUILDING & LOAN ASSOCIATION, Respondent, v. CLEARY and others, Appellants. NORTHERN BUILDING & LOAN ASSOCIATION, Respondent,vs. SAME, Appellants
Attorney:For Cleary and others connected with the Banking Commission there were briefs by the Attorney General and John E. Martin, assistant attorney general, attorneys, and Benjamin Poss and Joseph P. Brazy, both of Milwaukee of counsel, and oral argument by Mr. Poss and Mr. Brazy. B. F. Saltzstein and E...
Case Date:December 11, 1934
Court:Supreme Court of Wisconsin
 
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Page 684

257 N.W. 684 (Wis. 1934)

217 Wis. 179

STATE EX REL. CLEARY and others, Plaintiffs,

v.

HOPKINS STREET BUILDING & LOAN ASSOCIATION and others, Defendants.

RELIANCE BUILDING & LOAN ASSOCIATION, Respondent,

v.

CLEARY and others, Appellants.

NORTHERN BUILDING & LOAN ASSOCIATION, Respondent,vs. SAME, Appellants

Supreme Court of Wisconsin

December 11, 1934

Argued October 12, 1934.

APPEAL from two judgments of the circuit court for Milwaukee county: CHARLES L. AARONS, Circuit Judge. Reversed.

AN ORIGINAL ACTION commenced pursuant to leave granted by this court. Writ granted.

The Reliance Building & Loan Association and the Northern Building & Loan Association each brought its action to restrain the Banking Commission and Supervisor of Building and Loan Associations from interfering with the plaintiffs in their attempt to convert their associations from a state building and loan association into a federal savings and loan association. On September 14, 1934, the Banking Commission, with leave of this court, began an original action against the Hopkins Street Building & Loan Association to restrain the association, its officers, and agents from operating as a federal savings and loan association, to have defendant's attempted conversion into such an association declared null and void, and to compel the officers of said association to operate it as a Wisconsin building and loan association or to wind up its affairs as such an association in the manner provided by the statutes of this state, on the ground that the Hopkins Street Building & Loan Association is under the jurisdiction of the Banking Commission of the State of Wisconsin. The cases of Reliance Building & Loan Association and Northern Building & Loan Association were tried together in the circuit court for Milwaukee county before the court without a jury. The petition for leave to commence the original action in this court stands as the complaint. There was an appearance in this action by all of the named defendants and for "Hopkins Federal Savings & Loan Association, a national corporation, organized pursuant to the acts of congress and the laws of the United States of America, successor by conversion to Hopkins Street Building & Loan Association." An answer was interposed by the Hopkins Federal Savings & Loan Association describing the proceedings taken and alleging the legality and sufficiency thereof in the matter of converting that association into a federal savings and loan association, a corporation under the government of the United States, and praying for a rule that the Banking Commission of the State of Wisconsin has no jurisdiction of the defendant.

Reversed and cause remanded.

For Cleary and others connected with the Banking Commission there were briefs by the Attorney General and John E. Martin, assistant attorney general, attorneys, and Benjamin Poss and Joseph P. Brazy, both of Milwaukee of counsel, and oral argument by Mr. Poss and Mr. Brazy.

B. F. Saltzstein and E. J. Gross, both of Milwaukee, attorneys, and Lyman W. Sherwood of Chicago of counsel, for the Hopkins Street Building & Loan Association.

For the Reliance Building & Loan Association briefs were filed by Wallace Reiss of Milwaukee, attorney, and Lyman W. Sherwood of Chicago of counsel.

For the Northern Building & Loan Association briefs were filed by John H. Schlintz of Milwaukee, attorney, and Lyman W. Sherwood of Chicago of counsel.

OPINION

Page 685

[217 Wis. 182] The following opinion was filed December 11, 1934:

EDWARD T. FAIRCHILD, J.

The Reliance Building & Loan Association and the Northern Building & Loan Association, respondents on this appeal, and the Hopkins Street Building & Loan Association, defendant in the original action here, are each Wisconsin corporations organized under the provisions of ch. 215, Stats. This chapter places the control and supervision of building and loan associations under the Banking Commission, and authorizes the commission to take possession of and liquidate such an association when it shall appear that it is violating its charter or any of the laws of the state.

On July 22, 1932, congress enacted the Federal Home Loan Bank Act (12 USCA, § 1421 et seq.). By virtue of the provisions of this act, state building and loan associations were eligible to membership and, under certain conditions and restrictions, entitled to borrow from a Federal Home Loan Bank. The Wisconsin legislature, on July 10, 1933, by its enactment of sec. 215.07 (8), Stats., authorized Wisconsin building and loan associations, with the approval of the Commissioner of Banking, to become members of and borrowers from the Federal Home Loan Bank. Each of the building and loan associations here involved became [217 Wis. 183] members of the Federal Home Loan Bank. On June 13, 1933, there was enacted by the congress of the United States the Home Owners' Loan Act (12 USCA, § 1461 et seq.), section 5 of which authorizes the Federal Home Loan Bank Board to provide for the organization of associations to be known as Federal Savings & Loan Associations and to issue charters therefor; and on April 27, 1934, by amendment to the Home Owners' Loan Act (12 USCA, § 1464 (i)), it was provided:

"Sec. 5 . . . (i) Any member of the Federal Home Loan Bank may convert itself

Page 686

into a Federal Savings & Loan Association under this act upon a vote of 51 per centum or more of the votes cast at a legal meeting called to consider such action; but such conversion shall be subject to such rules and regulations as the board may prescribe, and thereafter the converted association shall be entitled to all the benefits of this section and shall be subject to examination and regulation to the same extent as other associations incorporated pursuant to this act."

Following the passage of the amendment just referred to and without further consent or authority of the state, application was made by the three associations to the Federal Home Loan Bank Board for permission to convert themselves into federal savings and loan associations under the provisions of sec. 5 (i) of the Home Owners' Loan Act of 1933 as amended. In each case the Federal Home Loan Bank Board granted the permission. With reference to the Hopkins Street Building & Loan Association, the Banking Commission undertook to prevent the proposed conversion, but in compliance with the order of the circuit court for Milwaukee county, desisted from such attempt, and the association accepted a charter from the Federal Home Loan Bank Board and has since held itself out to be a savings and loan association free from the jurisdiction and control of the Banking Commission of this state. An original action [217 Wis. 184] is brought against the association seeking to have the attempted conversion declared null, void, and of no effect. The Reliance Building & Loan Association and the Northern Building & Loan Association each began an action to restrain the Banking Commission from interfering with its proposed conversion. In those cases the Banking Commission interposed counter-claims praying for declaratory relief similar to that sought in the original action in this court and an injunctional order to prevent the proposed conversion. This is briefly a description of the record in the three matters, and they present identical questions. The learned judge who tried the two cases in which judgment...

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