Bennett v. Hibernia Bank
| Decision Date | 27 December 1956 |
| Citation | 47 Cal.2d 540,305 P.2d 20 |
| Court | California Supreme Court |
| Parties | Olive BENNETT et al., Plaintiffs and Appellants, v. The HIBERNIA BANK (a Corporation), et al., Defendants and Respondents. S. F. 19089. |
L. L. James, Carl E. Day, Leander L. James, III, San Francisco, and Morris Lavine, Los Angeles, for appellants.
Alexander S. Keenan, Jr., San Francisco, amicus curiae on behalf of appellants.
Tobin & Tobin, Sullivan, Roche, Johnson & Farraher, Brobeck, Phleger & Harrison and Moses Lasky, San Francisco, for respondents.
Plaintiffs are seeking declaratory relief to determine their rights, if any, in the Hibernia Bank which, prior to 1947, was known as the Hibernia Savings and Loan Society. They claim as successors of Callaghan Curtin who, it is alleged, became a member of Hibernia on October 27, 1860. A general demurrer to the complaint was sustained without leave to amend, and plaintiffs have appealed from the ensuing judgment.
The complaint is very lengthy, and it contains a great deal of purely evidentiary matter; some of the allegations are inconsistent, others are ambiguous and uncertain, and our task would have been greatly simplified had the complaint been clarified on special demurrer. We have concluded, however, that the complaint, when liberally construed, Code Civ.Proc., § 452; Treu v. Kirkwood, 42 Cal.2d 602, 608, 268 P.2d 482; Hudson v. Craft, 33 Cal.2d 654, 661, 204 P.2d 1, 7 A.L.R.2d 696; Jaffe v. Stone, 18 Cal.2d 146, 153, 114 P.2d 335, 135 A.L.R. 775, is sufficient as against the general demurrer.
The principal allegations of the complaint may be summarized as follows:
Hibernia was organized in 1859 under an act which authorized the formation of corporations having capital stock and made no provision for corporations composed of members rather than stockholders. Stats.1853, p. 87. By-laws were adopted which recited that the signers thereof agreed that the by-laws should govern them and determine their mutual duties, rights and privileges as members of the society. It was also provided that those who should sign the by-laws and It was the intention of the incorporators that Hibernia should be conducted as a membership corporation, and the members alone exercised the right to vote, elect the trustees and amend the by-laws.
Curtin became a member of Hibernia on October 27, 1860, when he signed the by-laws, paid the entrance fee, made a deposit of $3,500 and received a passbook showing the amount of his deposit.
Some shares of stock were issued following incorporation, but none was issued after November 29, 1861. Between that date and June 27, 1863, all but four certificates for shares were retired and cancelled, and thereafter the corporation was composed of members only, none of whom owned any stock. No dividends were ever declared or paid upon the stock of the corporation; instead, all dividends were paid to the members on their deposits.
On August 29, 1864, Hibernia elected to become incorporated under an act adopted in 1862, and amended in 1864, Stats.1862, p. 199, Stats.1863-1864, p. 531, which provided that savings banks, including associations claiming in good faith to be incorporated under the laws of this state, could incorporate as savings banks without capital stock. A new certificate of incorporation was filed which stated that Hibernia should have no capital stock and that its affairs should be managed by a board of directors. On September 29, 1864, the directors, without a vote or consent of the members, and without consent of Curtin, purported to adopt new by-laws which stated that all prior by-laws were repealed. Article 4 of the by-laws provided that all persons who were members on August 29, 1864,
Subsequent to August 29, 1864, and prior to January 18, 1871, Curtin signed the agreement provided for in the 1964 by-laws, by the terms of which he ratified the incorporation proceedings taken by Hibernia in 1864 and agreed to become a member of the corporation as it existed under the act of 1862. Those by-laws provided that the 'corporate powers' should be exercised by the directors, and amendments were adopted by the directors from time to time. An amendment so adopted in 1868 provided that all persons who were members on August 29, 1864, and then had not less than $100 to their credit, and whose accounts were not subsequently closed, An amendment on January 18, 1871, provided that those who had signed the agreement to become members and who then In 1886 an amendment was adopted which provided that a person shall cease to be a member 'who shall not have continuously and at all times, at least One Hundred Dollars to his or her credit upon an open deposit account on the books of this Corporation.'
In January 1909 Hibernia filed documents purporting to extend its corporate life for a further period of 50 years, and in March 1934 it filed other documents providing for perpetual existence of the corporation. The documents were executed by acting officers, directors and persons claiming to be members of the corporation; none of them was executed by Curtin, and neither he nor his daughter Mary had any knowledge of them.
Curtin maintained a deposit of at least $100 at all times from the opening of the account in October 1860 until April 1914, when he made a written assignment to Mary of all the moneys to his credit with Hibernia and she withdrew the balance on deposit, amounting to $363.54. He died several months later in September 1914. Mary was appointed executrix of Curtin's last will by the Superior Court of Santa Clara County, and his entire estate, including his membership rights in Hibernia, was distributed to her as sole legatee under his will. Mary died in January 1951, and a decree entered in 1952 ordered distribution to plaintiffs of the residue of her estate, which included the membership in Hibernia. Curtin's membership continued until transferred to Mary either by assignment or descent, and plaintiffs, as distributees of the estate of Mary, succeeded to all of the membership rights.
In October 1945 Hibernia filed an in rem suit to determine membership rights. The complaint named as defendants a number of individuals, together with all persons unknown claiming any right of membership, and alleged that, so far as Hibernia knew, the only persons who were members and had membership rights were 15 named individuals. These persons filed verified answers admitting the allegations of the complaint and alleging that they were members of Hibernia and the only persons having any right or interest in its property or assets other than the right to repayment of funds deposited with interest. Hibernia knew the residences of Curtin and of Mary, who was a resident of the state, and also knew or could have ascertained by an inspection of its records and the records of the Superior Court of Santa Clara County that Curtin's entire estate including his membership rights in Hibernia had been distributed to Mary as sole legatee. Neither Curtin nor Mary were naved as defendants, and the only service attempted on them was as unknown defendants, by publication and posting. No appearance was made on their behalf. The court directed entry of the defaults of all nonanswering defendants, including all persons unknown claiming any assets of Hibernia, and judgment was entered naming the 15 answering defendants as the sole members of Hibernia and the only persons having any right or interest in its property and assets.
In 1947 Hibernia was reorganized as a stock corporation under the name of The Hibernia Bank, with stock in the amount of $7,000,000 divided among the 15 individual defendants.
Up to the time of Mary's death in January 1951 neither she nor any of the plaintiff's had any notice or knowledge of the 1945 action or the judgment entered therein or of the conversion of Hibernia into a stock bank, or of the change of its name, or of any facts which might have led them to discovery of the 1945 suit. Although Mary knew that Curtin was one of the early depositors of Hibernia, she had no knowledge of the fact that he was a member or was possessed of any of the rights of a member, and plaintiffs had no such knowledge until about June 1952.
Plaintiff Bennett was informed shortly after October 21, 1951, of a newspaper article published on that date which told about the settlement of an action brought against Hibernia by the descendant of an early depositor. Upon investigation by Bennett, it was discovered that Curtin signed the by-laws in 1860, made a deposit and paid the entrance fee, and thus became a member of Hibernia. Discovery was also made of the 1945 suit, the conversion of Hibernia into a stock bank, and the distribution of all its stock to the 15 individual defendants. The information gained through the investigation was the...
To continue reading
Request your trial
-
City of Tiburon v. Northwestern Pac. R. Co.
...Maguire v. Hibernia S. & L. Soc. (1944) 23 Cal.2d 719, 728 et seq., 146 P.2d 673, 151 A.L.R. 1062 * * *.' (Bennett v. Hibernia Bank (1956) 47 Cal.2d 540, 550--551, 305 P.2d 20. See also, Columbia Pictures Corp. v. DeToth (1945) 26 Cal.2d 753, 760, 161 P.2d 217, 162 A.L.R. 747; Rubin v. Tobe......
-
Madlaing v. JPMorgan Chase Bank, N.A.
...showing the time and surrounding circumstances of the discovery of the cause of action upon which they rely." Bennett v. Hibernia Bank, 47 Cal.2d 540, 563, 305 P.2d 20 (1956). "The purpose of this requirement is to afford the court a means of determining whether or not the discovery of the ......
-
Reichert v. General Ins. Co. of America
...662, 328 P.2d 198, 68 A.L.R.2d 883; Coots v. Southern Pacific Co., 49 Cal.2d 805, 806 et seq., 322 P.2d 460; Bennett v. Hibernia Bank, 47 Cal.2d 540, 559 et seq., 305 P.2d 20; see Alter v. Michael, 64 Cal.2d 480, 483, 50 Cal.Rptr. 553, 413 P.2d 153; 1 Witkin, California Procedure (1954) Act......
-
Macris v. Bank of America, N.A.
...showing the time and surrounding circumstances of the discovery of the cause of action upon which they rely." Bennett v. Hibernia Bank, 47 Cal.2d 540, 563, 305 P.2d 20 (1956). "The purpose of this requirement is to afford the court a means of determining whether or not the discovery of the ......