Griffith v. Daylight Savings Building and Loan Association
| Decision Date | 11 December 1940 |
| Docket Number | 15-1940 |
| Citation | 16 A.2d 685,142 Pa.Super. 542 |
| Parties | Griffith, Appellant, v. Daylight Savings Building and Loan Association |
| Court | Pennsylvania Superior Court |
Argued October 9, 1940.
Appeal from decree of C. P. No. 7, Phila. Co., June T., 1939, No 1466, in equity, in case of Nathan Griffith v. Daylight Savings Building and Loan Association.
Bill in equity. Before Oliver, P. J.
The facts are stated in the opinion of the Superior Court and also in the opinion of the lower court, reported in 36 D. & C. 169.
Decree entered dismissing bill. Plaintiff appealed.
Errors assigned, among others, were various conclusions of the chancellor.
Decree affirmed.
Harold D. Saylor, of Strong, Saylor & Ferguson, for appellant.
William S. Peace, for appellee, filed no brief and made no argument.
Before Keller, P. J., Cunningham, Baldrige, Stadtfeld, Parker Rhodes and Hirt, JJ.
A stockholder in the defendant building and loan association which is in the course of voluntary liquidation, filed a bill in equity to compel the association to convey real estate to him in exchange for his unencumbered matured stock. An answer was filed thereto admitting the facts averred in the bill and asking for a judicial determination of the rights of the respective parties. The chancellor dismissed the bill and the exceptions filed to his decree were overruled by the court below. Hence this appeal.
The assets of the association, which included mortgage loans, a large amount of encumbered real estate, delinquent dues, etc., amount to a total of $ 382,424.84, with liabilities of $ 344,486.42. On or about March 8, 1939, the board passed a resolution that certain restrictions upon the activities of the association be enforced, paving the way for an informal voluntary liquidation.
By reason of its extensive holdings of real estate the association adopted a plan for decreasing its liabilities by conveying to a stockholder, when requested, real estate in exchange for his stock. In every such case the stockholders' matured or withdrawn stock had a value equal, at least, to the value at which the real estate was carried on the association's books. The surrendered stock was then cancelled and the outstanding obligation of the association accordingly reduced. An examiner of the Banking Department in his report made June 16, 1938, approved this plan. The defendant association, however, has recently ceased this practice, as the Department of Banking did not approve thereof, despite its examiner's recommendation.
The value of the plaintiff's matured stock amounts to $ 2,326. He asked the association to convey to him real estate in cancellation of his stock at the book value of such real estate or at the actual value thereof, whichever amount was the higher. This request was refused and this action followed.
There is no provision in the law that expressly prohibits a building and loan association from following the procedure heretofore adopted by the defendant in reducing its stock liability, but, on the other hand, there is no law that compels an association to do so. While there may be some advantages to the shareholders in being relieved of any obligations which accrue by reason of the association's holding real estate and such a course would no doubt serve to facilitate defendant's liquidation, due regard must be given to the interests of the shareholders of a building and loan association, as they have an equal status in the winding up of the affairs of an association. No shareholder should be permitted to obtain advantage over others occupying the same relationship: Sharps v Homer Building and Loan Association, 111 Pa.Super. 556, 170 A. 353; Rosenblatt et al. v. Potential Building & Loan Association, 110 Pa.Super. 466, 169 A. 24; Stone v. New Schiller...
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