Burke v. Hibernia Bank

• Decision Date: 28 November 1960
• Citation: 9 Cal.Rptr. 890,186 Cal.App.2d 739
• Court: California Court of Appeals Court of Appeals
• Parties: Barbara Beatrice Kastl Mancha BURKE, Plaintiff and Appellant, v. HIBERNIA BANK, a corporation, et al., Defendants and Respondents. Beverly W. THEOBALD et al., Plaintiffs and Appellants, v. HIBERNIA BANK, a corporation, et al., Defendants and Respondents. Civ. 18693, 18776.

Page 890

9 Cal.Rptr. 890

186 Cal.App.2d 739

Barbara Beatrice Kastl Mancha BURKE, Plaintiff and Appellant, v. HIBERNIA BANK, a corporation, et al., Defendants and Respondents.

Beverly W. THEOBALD et al., Plaintiffs and Appellants, v. HIBERNIA BANK, a corporation, et al., Defendants and Respondents.

Civ. 18693, 18776.

District Court of Appeal, First District, Division 1, California.

Nov. 28, 1960.

Rehearing Denied Dec. 27, 1960.

Hearing Denied Jan. 25, 1961.

C. Ray Robinson, Eugene A. Mash, O'gara, McGuire & Danielson, Walter McGovern, San Francisco, for appellants.

Tobin & Tobin, Sullivan, Roche, Johnson & Farraher, Brobeck, Phleger & Harrison, San Francisco, for respondents.

TOBRINER, Justice.

In these two actions appellants, as successors in interest of Thomas Cian and Michael Kane, seek a determination of their asserted rights in The Hibernia Bank. Appellants would fashion a sword of factual issues to pierce respondents' summary judgments, but the affidavit upon which they rely consists of inadmissible evidence, while respondents' affidavits state facts sufficient to sustain the judgments.

We analyze in the first instance the complaints; in the second, respondents' affidavits in support of the summary judgments.

The complaints in these appeals are almost identical; both are framed in four counts. We present a synopsis of the first and third counts, respectively; we need not discuss the other two counts since they have been abandoned by appellants.

Appellants allege that on April 12, 1859, Hibernia Savings and Loan Society was incorporated pursuant to 'An Act to provide for the Formation of Corporations for certain purposes.' Stats.1853, p. 87. Although its certificate of incorporation provided for a stock structure, this Hibernia of 1859 functioned as a membership corporation. Michael Kane became a member of this corporation on April 12, 1859; Thomas Cian acquired his membership on November 12, 1860. On August 29, 1864, in accordance with the members' prior authorization, Hibernia Savings and Loan Society was incorporated as a membership corporation under 'An Act to provide for the formation of Corporations for the accumulation and investment of Funds and Savings.' Stats.1862, p. 199, as amended by Stats.1864, p. 531. The later corporation's board of directors adopted a set of by-laws on September 29, 1864 by which, and together with subsequent amendments, they intended to restrict membership in Hibernia of 1864.

Thomas Cian, according to the complaint, on May 11, 1865, assigned his account and membership to John Meiler, who continued to be a member until his death on April 30, 1914. Appellant Burke is the sole heir of John Meiler.

The complaints further allege that by the year 1945 Hibernia of 1864 had acquired a surplus fund which exceeded $8,000,000. In 1946 Hibernia obtained an in rem judgment determining its membership without notice to John Meiler of Michael Kane or their successors in interest who were members thereof; therefore, this judgment is not binding on appellants. ¹ In 1947 the fifteen adjudicated members of Hibernia converted the society into a stock corporation; to each of these members this stock corporation, subsequently called The Hibernia Bank, issued 18,666 2/3 shares of stock in lieu of reserve fund. Appellants further allege that respondents engaged in a conspiracy between 1944 and 1947 by which they intended to deprive the appellants of their rights as members of the society.

Countering these allegations respondents filed motions for summary judgments. Their supporting affidavits set forth the facts which we recite below.

In 1859 Michael Kane opened an account with Hibernia Savings and Loan Society, but by withdrawal of the credit balance he closed this account on August 7, 1862. On July 28, 1866, he opened a new account with Hibernia of 1864. Michael Kane died on November 1, 1899; on October 9, 1924 his account was closed by payment of the credit balance to the order of Elizabeth Buckley, as Executrix of the Estate of Michael Kane.

Thomas Cian opened an account with Hibernia Savings and Loan Society on November 12, 1860, and though he withdrew the credit balance in this account on July 24, 1862, he made another deposit on November 19, 1862. On May 11, 1865, Cian assigned this account to John Meiler. Hibernia of 1864's board of directors neither elected Cian nor Meiler to membership, and neither Cian nor Meiler ever signed the 'Agreement to Become Members.' The State of California, pursuant to a judgment of escheat, obtained the credit balance in this account on April 21, 1933.

The Hibernia Savings and Loan Society was incorporated in 1864 and on September 29th of that year adopted certain by-laws. The fourth article of the by-laws reads: 'All persons who were members of The Hibernia Savings and Loan Society on the thirty-first day of August, 1864, shall be deemed and considered members of this corporation, and the signatures of such persons to an agreement on their part to become members of this corporation, and ratifying and confirming the incorporation of said The Hibernia Savings and Loan Society, as directed by a resolution of its Board of Trustees, adopted Aug. 8th, 1864, shall be procured as speedily as may be. Other persons may be allowed to become members of this corporation by a vote of the Board of Directors, but not otherwise. Membership shall not pass with the ownership of moneys deposited with or under control of the corporation.' (Emphasis added.)

The by-law was amended on numerous occasions; on October 19, 1888 and until April 17, 1915, it read: 'The only members of this Corporation are the persons who have signed the agreement * * * [to become members] and who have kept accounts open with the corporation since they respectively signed said agreement. Other persons may become members thereof by vote of the Board of Directors, and by signing said agreement, and keeping an open account with the Corporation, but not otherwise. Membership shall not pass with the ownership of moneys deposited with or under the control of the Corporation. Membership ceases when a member once closes his or her account. * * * Any person shall cease to be a member of this Corporation * * * who shall not have continuously and at all times, at least one hundred dollars to his or her credit upon an open deposit account. * * * Membership therein shall continue only so long as such credit shall exist, and shall cease when such credit shall cease to exist.' (Emphasis added.)

To defeat the impact of these by-laws appellants rely upon an affidavit of William Lyle. The affidavit recites that Alf. R. Kelly, the uncle of William Lyle, had been a member of Hibernia; that, upon his death, his membership passed to his heirs, and in 1946 or 1947 Hibernia paid the heirs for this membership an amount which the affiant believes exceeded $100,000. Lyle also states that he is the grandson of James R. Kelly, deceased, who was a member and depositor of Hibernia; affiant alleges he went to see Cyril R. Tobin, a director of Hibernia, and requested payment for his grandfather's interest in Hibernia; Tobin responded by offering $35,000, but, upon affiant's failure to reply, accused him of blackmail and stated that affiant had no interest in Hibernia.

The summary judgments declare, among other things, that appellants have no interest in respondent bank; that 'membership in the defendant bank' acquired prior to the conversion of the bank to a stock corporation in 1947, including any membership acquired by being a member of Hibernia of 1859 on August 29, 1864, or at any time prior to the 1864 by-laws, was non-transferable and non-descendible.

While we have discussed in companion cases many of the issues which arise here, we shall examine briefly two matters which appellants particularly emphasize: (1) The triable issues of fact asserted by appellants, and (2) appellants' position and citations as to transferability and descendibility.

As to the first, appellants' argument that they have raised triable issues of fact, which defeat the summary judgments, must fail upon the ground that their counteraffidavits do not set out competent evidence upon which such issues can rest. As we have pointed out in the companion cases, a summary judgment will stand if the supporting affidavits state facts sufficient to sustain a judgment and the counter-affidavits do not proffer competent and sufficient evidence to present a triable issue of fact. Coyne v. Krempels, 1950, 36 Cal.2d 257, 261, 223 P.2d 244; Code Civ.Proc. § 437c. The summary judgment procedure seeks to discover, through the media of affidavits, whether the parties possess evidence which demands the analysis of trial. Schessler v. Keck, 1956, 138 Cal.App.2d 663, 668, 292 P.2d 314; Cone v. Union Oil Co., 1954, 129 Cal.App.2d 558, 562, 277 P.2d 464. Specifically requiring that such evidence be admissible, section 437c of the Code of Civil Procedure provides: '[T]he facts stated * * * [in each affidavit] shall be within the personal knowledge of the affiant * * * and each affidavit shall show affirmatively that affiant, if sworn as a witness, can testify competently thereto.'

Here, however, the major portion of the Lyle affidavit setting out Lyle's request for compensation upon the basis of his grandfather's membership in Hibernia, and Tobin's response, relates to a matter of compromise; such evidence is not admissible. Thus the court in Yoakam v. Hogan, 1926, 198 Cal. 16, 21, 243 P. 21, 23, states, 'if it can be said that the answers tended to show an offer on the part of the defendant to compromise, the evidence would be * * * incompetent * * *'. Nor does the fact that this affidavit pertains to another action against The Hibernia Bank improve the quality of the evidence. As the court in Brown v. Pacific Electric Ry. Co., 1947, 79 Cal.App.2d 613, 616-617, 180 P.2d 424, 426, points out: 'It is contrary to public policy to subject a person who...