Bingham v. The Marion Trust Co.
| Decision Date | 28 June 1901 |
| Docket Number | 3,788 |
| Citation | 61 N.E. 29,27 Ind.App. 247 |
| Parties | BINGHAM v. THE MARION TRUST COMPANY, RECEIVER |
| Court | Indiana Appellate Court |
From Marion Circuit Court; H. C. Allen, Judge.
Petition for instructions by the Marion Trust Company, as receiver of the Washington Savings and Loan Association. From a decree adjudging the association insolvent and fixing the status of the holders of paid-up stock, Harriet A. Bingham, a stockholder of the association, appeals.
Affirmed.
A. C Ayres, A. Q. Jones, J. E. Hollett and J. E. McCullough, for appellant.
J. W Noel and F. J. Lahr, for appellee.
This appeal is from the decision of the trial court in overruling the exceptions of appellant to the report of the Marion Trust Company as receiver of the Washington Savings and Loan Association, in which the receiver made a showing of its liability to appellant as a stockholder in said association and in which the appellant was given judgment for the amount of her claim as found by the trial court. The Marion Trust Company was appointed receiver of the Washington Savings and Loan Association May 20, 1899, and under the instructions of the court was winding up the affairs of the association.
The issues were presented in the following manner: The receiver petitioned the court for instructions, in which petition it made a showing that a large amount of money had been paid from the assets of the association as dividends upon certain classes of stock known as prepaid stock and paid up stock, at rates of from eight per cent. to ten per cent. per annum, at times when the association had no net profits or surplus, and when it was in an insolvent condition, and that no dividends of any character were ever credited to or paid upon the ordinary running stock of the association and that such dividends were paid upon prepaid and paid up stock, notwithstanding the fact that there were at no time any profits from which to declare dividends, and that such dividends were paid from the capital stock of the association, to its great impairment.
Upon the showing made by the receiver, the court ordered the receiver, in cases where stock upon which said dividends had been paid is still in force, to recover such paid dividends by setting off the amount thereof against the distributive share of the stockholder who received them, and retaining from said distributive share of the stockholder such amount as was necessary to reimburse the association.
On the 14th of July, 1900, the receiver made a report, including a schedule of liabilities, in which he showed the liability of the association in favor of Harriet A. Bingham to have been as follows: Book value of stock, $ 1,500; dividends paid by association and ordered recovered by the court on certificate 138, $ 219.21, and on certificate 139, $ 243.60; and that a partial withdrawal had been made of $ 500 which should also be recovered.
In the same report the receiver showed to the court that certain withdrawals shown by the schedule had been made while the association was insolvent, and the parties making the same were not entitled thereto, and asked that the amount of said withdrawals should be deducted from the distributive share of stockholders to whom such amounts had been paid. And the receiver further prayed authority to declare a dividend of twenty-five per cent. to all stockholders.
The court approved the report and the schedule of liabilities and found that said schedule showed the correct amount due each party named in the schedule, and instructed the receiver to withhold dividends declared on the amounts of all the shareholders, respectively, who had made partial withdrawals, and to return the same to the assets until the whole amount of the withdrawal should be recovered. The court further ordered the receiver to retain the distributive dividends of each and all of the stockholders who had received former dividends when there were no profits, and to return the same to the assets of the association until the assets were reimbursed for said wrongfully paid dividends. The court further ordered that all claims against the association should be adjudicated as shown by said schedule unless objections or exceptions were filed on or before the 4th of September, 1900. Afterward the time was extended to the 17th of September, 1900.
On the 15th of September, 1900, the appellant filed an intervening petition asking that her claim be allowed in the sum of $ 1,500, without any deductions, and filed her exceptions to the report of the receiver, in which she excepted to the deductions of $ 219.21 and $ 243.60, respectively, on account of dividends, and to the deduction of $ 500 on account of her withdrawal, in which she alleged that she was the owner of certain certificates of paid up stock of the association of $ 1,000 each, for which she paid the face thereof in full at the time of taking the certificates, and in which she alleged further that a dividend of nine per cent. per annum was guaranteed her in writing on the back of each of said certificates. She alleged further that the amount set out in the schedule as deductions were paid to her as dividends at the rate of nine per cent., under said guarantee, excepting the amount of $ 500, which was paid to her upon her application for withdrawal on or about the 26th of November, 1898.
The receiver answered, admitting all the facts pleaded in the petition and exceptions, but alleged, in short, that at all times at which said dividends were paid, and at all times after appellant became a member of the association, the association was insolvent, and there were no profits or surplus, but there was a large deficit in said association, and that said sums purporting to be dividends were paid wrongfully and notwithstanding the fact that there were no net profits or earnings. The receiver alleged further in answer that at the time of the payment of said $ 500 in withdrawal, the association was insolvent, and that she had no right to withdraw her stock.
The appellant replied in general denial. The issues thus formed were submitted to the court for trial, and upon the request of the appellee, made at the proper time, the court made a special finding of the facts and stated conclusions of law thereon.
Over a motion by appellant for judgment in her favor upon the facts found, judgment was rendered by the court overruling the appellant's objections and exceptions to said report of the receiver, and that her claim against the receiver be allowed in the sum of $ 2,000; that she recover from the assets of the Washington Savings and Loan Association such portion of her distributive share thereof based upon said claim of $ 2,000 as may exceed the sum of $ 962.81 (that being the aggregate amount paid her by said association as dividends upon her stock and upon her withdrawal of $ 500 of stock before said association went into liquidation or hands of the receiver), but that said distributive share of her said claim shall be retained by the receiver and returned to the assets of said association until the sum of $ 962.81 shall have been so retained, and said assets reimbursed in said amount, and that the distributive share of said Harriet A. Bingham based upon said claim of $ 2,000, which may exceed the said sum of $ 962.81 be paid to her by the receiver.
It is claimed upon this appeal that the court erred (1) in each one of its conclusions of law; (2) in overruling appellant's motion for judgment in her favor upon the facts found; (3) in overruling the exception of the appellant to the report of the receiver.
The court found specially that the receiver was engaged in winding up the affairs of the Washington Savings and Loan Association, which was a building and loan association organized and existing under the laws of Indiana, the receiver having been appointed May 20, 1899. The Washington Savings and Loan Association had been formed February 7, 1898, by a consolidation which absorbed the Equitable State Building and Loan Association, which had been doing business under the laws of this State since the 1st day of January, 1896, and prior thereto. Appellant became a member of the association on the 11th of May, 1896, taking ten shares of paid up stock of the association, her certificate being of the face value of $ 1,000, for which she paid $ 1,000 cash. On the 26th of May, 1896, she took ten additional shares of the same character of stock in the additional amount of $ 1,000, which she paid in cash to the association.
The by-laws of the association, both at the time she subscribed the stock and at the time of the consideration, provided that paid up stock should be issued in shares of $ 100 each, which should be paid for in advance at the rate of $ 100 per share, and should bear dividends at the rate of eight per cent. per annum, in lieu of all other earnings. Section thirty of the by-laws also provided that "the loan fund shall be applicable to the payment of dividends, interest, and loans on approved security, to the payment of withdrawals," etc. Her certificates bore on the back thereof the following:
On the first of said certificates the officers of said association paid appellant sums of money purporting to be dividends from May 11, 1896, to October 1, 1898, inclusive, amounting in the aggregate to $ 219.21. ...
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