Clarke v. Darr

• Decision Date: 28 May 1901
• Docket Number: 19,124
• Parties: Clarke, Receiver, v. Darr et al
• Court: Indiana Supreme Court

60 N.E. 688

156 Ind. 692

Clarke, Receiver, v. Darr et al

No. 19,124

Supreme Court of Indiana

May 28, 1901

From the Elkhart Circuit Court.

Reversed.

Erdall & Swansen, W. Roose and G. D. Lint, for appellant.

Lou W Vail, for appellees.

Jordan J. Baker, J., did not participate in this decision.

OPINION

Jordan, J.

This action was instituted by appellant, Clarke, receiver of the American Savings & Loan Association, formerly doing business under the name of the American Building & Loan Association, a corporation organized in April, 1887, under the laws of the state of Minnesota as a building and loan association. By this suit appellant as such receiver sued to recover judgment upon a bond or written obligation, and to foreclose a mortgage upon certain real estate situated in the city of Goshen, Elkhart county, Indiana, said bond and mortgage both being executed by the appellee Charles L. Darr to said building and loan association on the 1st day of August, 1890, the bond being for money loaned or advanced to him by the association, to secure which the mortgage in suit was executed. It appears that prior to the commencement of this action said association had become insolvent, and appellant was duly appointed receiver to wind up its affairs and collect its assets. Appellees appeared to the action, and Charles L. Darr filed a verified plea in abatement whereby he sought to abate the action. Appellant's demurrer to this plea was overruled, and, upon his refusal to plead further judgment was rendered in favor of appellees, to the effect that appellant take nothing by his complaint, and that they recover their costs. The only error assigned is that the court erred in overruling this demurrer.

The plea in question by way of abatement averred that the American Building & Loan Association was a foreign corporation, organized under the laws of the state of Minnesota, and at the time of the execution of the bond and mortgage in suit it was doing business in the State of Indiana, and that said contracts were entered into by it through William H. Vesey, Charles W. Miller, Merrill E. Wilson, and Charles Wehmeyer, who were then acting as its agents in and for the county of Elkhart, State of Indiana; that said parties as agents for the said association had not at the time of entering into said contracts, nor have they, or either of them, or any other person, at any time since the execution thereof, deposited or filed in the clerk's office of said Elkhart county any power of attorney, appointment, or authority under or by which they, or either of them, acted as such agents; that said corporation is now insolvent and in the hands of a receiver, and has not, prior to the commencement of this action, complied with the provisions of §§ 3022, 3023, 3030 R. S. 1881. Sections 3022, 3023, supra, referred to in the above plea of abatement, were a part of the revised statutes of 1852, and have been in force in this State since 1853, and are numbered §§ 3453, 3454 Burns 1894. Section 3461 Burns 1894, § 3030 R. S. 1881, mentioned in the plea of abatement, is section two of an act approved March 15, 1879 (Acts 1879, p. 145), which relates to the transfer of actions by a foreign corporation from any court in this State to the federal courts. This latter section, under the facts in this case, is not applicable, and must have been substituted by the pleader through inadvertence, for § 3456 Burns 1894, § 3025 R. S. 1881. Section 3022, supra, requires agents of foreign corporations, before entering upon the duties of their agency in this State, to deposit in the clerk's office of the county where they propose to transact business the appointment or authority under, or by virtue of which, they act as agents. Section 3023, supra, requires said agents to procure from such foreign corporation and to file with the clerk of the circuit court of the county wherein they propose to do business before commencing their duties a duly authenticated order or resolution of its board of directors or managers, authorizing citizens or residents of this State having a claim or demand against such corporation, arising out of any transaction in this State with such agents, to sue for and maintain an action in respect to the same, etc., and further authorizing service of process in such action on such agent to be valid service on such corporation, etc. Section 3025, being section four of the act as originally enacted, provides that "Such foreign corporations shall not enforce, in any court of this State, any contract made by their agents or by persons assuming to act as their agents, before a compliance by such agents or persons acting as such with the provisions of sections one and two of this act." (§§ 3022, 3023.)

Appellant virtually concedes that the agents mentioned in the plea of abatement had not, at the time they transacted the business in question with appellee in respect to loaning the money and the execution of the bond and mortgage, nor did they at any time subsequent thereto, comply with the provisions of said §§ 3022, 3023, supra, but he contends that he is authorized to maintain this action by virtue of section ten of an act of the legislature of this State, approved March 8, 1897 (Acts 1897, p. 284), which section reads as follows: "That where a foreign building and loan association doing business within this State has become insolvent, and its affairs are being wound up by a receiver, the failure of such association to have complied with the laws of the State representing its admission to do business therein, shall not affect the right of such receiver to bring any suit necessary to wind up the affairs of such association."

Appellee, however, assails the validity of this act upon the grounds that it was enacted in violation of section 19, article 4 of the State Constitution, which provides that "Every act shall embrace but one subject and matters properly connected therewith; which subject shall be expressed in the title", etc. The title of the above act of 1897 is as follows: "An act concerning building and loan associations; prescribing the duties of certain officers therein named; providing penalties for the violation of the provisions of this act; fixing the time when the same shall take effect, and repealing all laws and parts of laws in conflict therewith; fixing the time for the taking effect thereof."

The first section of the statute in question provides "That every association heretofore or hereafter incorporated under any law of this State providing for the incorporation of building and loan fund and savings associations, and every association heretofore or hereafter incorporated for the purpose of raising money to be loaned or advanced among its members, shall be known in this act as a building and loan association," etc. Section two makes it unlawful for any building and loan association doing business in this State to charge or collect from any of its members, on the stock or shares of stock therein, any money other than membership fees, loan fees, dues on stock, premium, interest, fines, and forfeitures, etc. Other sections of the act relate to the matters and affairs of building and loan associations. Section eight provides for the going into liquidation of building and loan associations organized under the laws of this State, and further provides that any such association which may go into liquidation under the provisions of the act shall not be subject to any of the provisions of the preceding sections, but its affairs shall be controlled and regulated by the laws in force prior to the passage of the act until the winding up of its affairs. Section nine, among other things, legalizes contracts previously made between a borrower and any such association for the payment of any premiums with or without any bidding, and further provides that no premiums previously contracted for without bidding, or to be contracted for, under this section, shall be deemed usurious.

Counsel for appellees propounds this question: "Is the title 'An act concerning building and loan associations', a broad enough title to cover a statute relating to such associations organized under the laws of sister states?" It is asserted that a going corporation organized under the laws of this State and the receiver of an insolvent foreign corporation constitute two subjects and that neither is matter properly connected with the other. Counsel contend that the title of the act indicated that the law to be enacted was intended to apply only to domestic building and loan associations which were going concerns within this State, and not to the winding up of the affairs by a receiver of a foreign insolvent association which had been doing business within the State, and the insistence is further advanced that such a matter can not be considered as one properly connected with the subject designated by the title. The provision of our Constitution here involved has been repeatedly considered by this court, and the purpose and meaning thereof seem to be settled upon principles which give it a somewhat general and liberal application. As affirmed in Hingle v. State, 24 Ind. 28: "It authorizes one subject, and any number of matters, provided they have any natural or logical connection with each other in legislation. The words 'subject' and 'matter' are often used as synonymous. Indeed, in the sense in which they are employed in the Constitution, they are as nearly so as it is possible for two English words to be, and both are used simply to avoid repetition. The only difference between them is created by the offices which they are respectively made to perform in the clause in question. * * * Now it is quite evident that the word 'subject' is here used to indicate the chief...