Berlizheimer v. Asset Building and Loan Association
| Decision Date | 03 October 1932 |
| Docket Number | 12041 |
| Citation | 17 Pa. D. & C. 167 |
| Parties | Berlizheimer v. Asset Building and Loan Association |
| Court | Pennsylvania Commonwealth Court |
Bill in equity to recover withdrawal value of building and loan association stock.
William C. Hayes, for plaintiff.
Emanuel Moss, for defendant.
The plaintiff avers in her bill that she is a citizen of the Commonwealth of Pennsylvania and a resident of the County of Philadelphia; that defendant is a corporation organized and existing under and by virtue of the laws of the Commonwealth of Pennsylvania and was and is doing business in the City of Philadelphia; that the defendant corporation was formed by the merger and consolidation of Arco Building and Loan Association, Simon Greenbaum Building and Loan Association and Asset-Interest Building and Loan Association, all corporations organized and existing under the laws of the Commonwealth of Pennsylvania and doing business in the City of Philadelphia; that plaintiff is and was, prior to April, 1980, the owner of 52 1/2 double shares of the stock of the first series and five double shares of stock of the second series of Arco Building and Loan Association; that from January, 1924, to and including the month of May, 1930, there had been paid to the Arco Building and Loan Association as dues on said 52 1/2 double shares of the first series the sum of $ 105 monthly, a total of $ 8085, and on said five double shares of the second series the sum of ten dollars monthly, a total of $ 710, or a total on both series of $ 8795; that, on April 24, 1930, plaintiff sent by registered mail to Lester J. Moses, Secretary of the Arco Building and Loan Association, and on May 21, 1930, delivered to the said secretary, a written notice of her desire to withdraw as a stockholder of the Arco Building and Loan Association; that the said notice was presented at a regular meeting of the board of directors of the said association held on or about May 21, 1930; that the Arco Building and Loan Association failed to pay to the plaintiff the withdrawal value of her stock; that, on September 10, 1930, a special meeting of stockholders of the Arco Building and Loan Association was held for the purpose of voting upon a merger and consolidation of the said Arco Building and Loan Association with the Asset-Interest Building and Loan Association and Simon Greenbaum Building and Loan Association; that the plaintiff did not consent to the merger and voted against the proposed merger at the meeting; that the merger and consolidation was completed, and that the defendant Asset Building and Loan Association was formed as a result of the merger, AR of the averments of plaintiff's bill were admitted. Plaintiff prays for a decree requiring the defendant corporation to pay her the value of her stock at the time of the merger; and, further, that the said defendant corporation be restrained from transferring or conveying any of its assets until such payment be made to the plaintiff; and that the defendant corporation be ordered and decreed to furnish plaintiff a statement of the value of her stock as of the date of the organization of the defendant by merger of the Arco Building and Loan Association, the Simon Greenbaum Building and Loan Association and the Asset-Interest Building and Loan Association. A certified public accountant testified as to the value of plaintiff's shares in the respective series as of September 30, 1930. This valuation was fixed at $ 6226.90.
The defendant presents five grounds of defense to the right of plaintiff to a decree: (1) insolvency; (2) adequate remedy at law; (3) failure to proceed under the Act of 1909; (4) laches; and (5) an order front the Department of Banking to pay no withdrawals.
We will consider these in the order named.
1. It was held in Friedman v. Southern Cooperative B. & L. Ass'n, 104 Pa.Super 514, that where a stockholder of a building and loan association objects to a proposed merger and refused to become a stockholder in the consolidated corporation, it is no defense, in an action against the consolidated corporation to recover the amount so agreed to be paid, that defendant is insolvent and that to pay plaintiff would give him an unjust preference over other stockholders, since plaintiff never became a stockholder of the new corporation but is its creditor to the extent of the agreed value of the stock, and is, therefore, entitled to priority as such over the stockholders. The financial status of a defendant corporation is not controlling: In Ferrando v. U.S. National B. & L. Assn, 307 Pa. 25, 27, it was held: " When a corporation, against the protest of one of its stockholders, transfers all its assets, either through sale or merger, to another corporation, a dissenting stockholder is entitled to demand and receive in cash the value of his stock at the time of such transfer: Koehler et al. v. St. Mary's Brewing Co. et al., 228 Pa. 648; Maxler v. Freeport Bank et al., 275 Pa. 510; Ringler v. The Atlas Portland Cement Co. et al., 301 Pa. 176; 3 Cook on Corporations, 8th edition, Sec. 671; 1 Savidge on Corporations in Pennsylvania, Sec. 207."
2. Should plaintiff's bill be dismissed if she has an adequate remedy at law? Rule 49 of the Rules of Equity Practice provides: " if the only objection sustained is that plaintiff has a full, complete and adequate remedy at law, the bill shall not be dismissed, but shall be certified to the law side of the court for further proceedings." This question, however, should be raised as a preliminary objection and not at hearing on bill and answer. In Wright et al....
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