Hillers v. Local Federal Sav. & Loan Ass'n

• Decision Date: 06 March 1951
• Docket Number: No. 32335,32335
• Citation: 204 Okla. 615,1951 OK 57,232 P.2d 626
• Parties: HILLERS et al. v. LOCAL FEDERAL SAVINGS & LOAN ASS'N.
• Court: Oklahoma Supreme Court

Page 626

232 P.2d 626

204 Okla. 615

HILLERS et al. v. LOCAL FEDERAL SAVINGS & LOAN ASS'N.

No. 32335.

Supreme Court of Oklahoma.

March 6, 1951.

Rehearing Denied June 19, 1951.

Syllabus by the Court.

1. Upon the death of a stockholder in a building and loan company, his legal representative or distributees of stock in the company shall be entitled to receive the full amount paid in by the decedent stockholder and legal interest thereon.

2. No statute of limitation begins to run against the foregoing liability created by 12 O.S.1941 § 95(2) until demand is made for payment and unconditionally refused.

3. Where demand is made and the liability is acknowledged but a future plan of payment is suggested by the debtor and accepted by the administrator, the demand for immediate payment contemplated by the statute, supra, is in legal effect withdrawn and the statute of limitation that would otherwise start running is inoperative.

4. Laches in legal significance is delay which works a disadvantage to another and causes a change of condition or relation during the delay.

5. Estoppel is an equitable defense which will not be accorded a building and loan company which pays a former administrator of a deceased stockholder's estate its statutory liability on the basis of apparent authority long after his discharge and the settlement of the estate, though the erstwhile administrator still possesses the stock certificates, where no inquiry or investigation is made by the company as to the existing authority of the payee at the time of payment and where it is not contended that the payments or any part thereof reached the persons entitled thereto.

Clay M. Roper, Homer Caldwell, both of Oklahoma City, for plaintiffs in error.

Everest, McKenzie, Gibbens & Crawford, of Oklahoma City, for defendant in error.

ARNOLD, Chief Justice.

Albert Heitmann died intestate on September 2, 1930, owning three certificates representing 45 shares of stock, of the par value of $4,500, in the Local Building & Loan Association. C. S. Young was appointed administrator of his estate by the County Court of Canadian County. On September 25, 1931, the county court entered a final decree setting over to the heirs, brothers and sisters of the decedent, in equal parts, said shares of stock and other assets. On January 20, 1932, Young was discharged as administrator. While he was acting as such administrator, Young made a demand upon the defendant for withdrawal and for payment of the amount due on the certificates of stock and submitted to it an order by the county court to convert said stock into cash, but because of the economic depression and the rules governing building and loan associations, the defendant did not then make payment but suggested a plan of payment which would be followed. On August 17, 1934, Local Building & Loan Association, not actually knowing that Young had been discharged as such administrator, issued to him a check for $2,728.13 as partial payment on the stock. On January 28, 1935, upon surrender and cancellation of the stock certificates, which had been in Young's possession until the time of cancellation, it delivered to Young, payable to him as such administrator, two checks, one for $299.32 and one for $627.60, in payment of the balance due on the stock. Young deposited these checks in the bank at Wheatland and testified that he wrote out checks dividing the amounts so collected among the five heirs of the decedent and that the banker was to mail them to the respective parties. The record is silent as to what became of the last named checks, but the heirs did not receive the money due them. After these checks were issued, the Local Building & Loan Association was converted into a Federal institution and became the Local Federal Savings & Loan Association.

Two of the heirs lived in Iowa and three lived in Germany. One of those in Iowa died. On December 19, 1941, the four living heirs and the administrator of the estate of the deceased heir filed a suit against the Local Federal Savings & Loan Association to recover the amount due on said certificates of stock. That suit was dismissed without prejudice on May 6, 1943, and on May 5, 1944, the present action was filed. As one ground of defense, the defendant relied on the statute of limitations.

The plaintiffs plead and argue that it was a fraud upon them for defendant to pay the amount due to Young after he was discharged as administrator, that they did not discover the fraud until within two years prior to the commencement of the first action; that 12 O.S.1941 § 95(3) is the applicable statute of limitations; that their action is not barred since their cause of action accrued less than two years prior to the filing of the first action, and that since that action failed otherwise than on its merits the present action was timely filed under 12 O.S.1941 § 100.

After the case was tried, the cause was dismissed as to the three heirs residing in Germany, presumably because as alien enemies they were prohibited from prosecuting a suit in the courts of this country.

Judgment was rendered from the defendant, and from that judgment Annie Hillers, one of the heirs residing in Iowa, and L. F. Kruse, administrator of the estate of Henry Heitmann, deceased heir who also resided in Iowa, have perfected this appeal.

The pertinent facts in this case can be summarized as follows:

Albert Heitmann owned 45 shares of defendant's stock;

He died September 2, 1930;

C. S. Young was appointed administrator October 4, 1930;

On May 25, 1931, he demanded redemption of the stock by defendant and delivered copy of letters and copy of order of court authorizing the conversion of the stock to cash;

The building and loan company acknowledged the obligation and suggested a plan of future payment which was acceded to by the administrator and followed by it;

His final account was approved September 25, 1931, and he was discharged January 20, 1932;

Stock certificates were surrendered and final payment made thereon to administrator January 28, 1935;

Plaintiffs brought suit December 19, 1941.

The cause of action for the establishment and enforcement of the liability of the building and loan company to the representative of the estate of Heitmann or the heirs of his stock is statutory and accrued when suit could have first been brought against the defendant under and by virtue of the statute. Baker v. Tulsa Building & Loan Ass'n, 179 Okl. 432, 66 P.2d 45.

Section 9800 of O.S.1931, 18 O.S.A. § 212, in force from the time of decedent's purchase of the stock until and after his death provides in part: 'Upon the death of a stockholder, his legal representative shall be entitled to receive the full amount paid in by him and legal interest thereon, first deducting all charges that may be due on the stock.'

The building and loan company is a special sort of financial institution that issues stock to those who make regular payments of money to it for the purpose of investment. In some respects it is much like a partnership. Provision is made by law and the by-laws of the company for withdrawal by a stockholder. In withdrawing the stockholder is bound by applicable law and the rules of the company. The Legislature, either thinking that the law and the rules of the company did not apply to a stockowner by inheritance or to the representatives of an estate or desiring to fix a different method of withdrawal, passed the foregoing statute. It surely was not the intention of the Legislature to subject the building and loan company to a suit immediately after the death of a stockholder and without demand to it. The building and loan company should be given an opportunity to meet its statutory, fixed obligation before it is sued. Suppose the foregoing statute provided that in case suit was brought a 25 per cent attorney's fee might be allowed; would we then say that suit could be brought immediately upon the death of the stockholder and without demand upon the company for payment? The building and loan company is obliged to and does keep very accurate records of all monies received by it for investment and can very easily and accurately at any time figure its statutory liability upon the death of one of its stockholders. Such claims as here presented are never stale claims and a statute of limitation should not be applied on such claims unless it is imperative to do so.

The foregoing statute fixing the liability of the building and loan company to the representative of the heirs of a stockholder upon his death, though creating a sort of creditor-debtor relationship, actually creates in law a cash deposit of the money paid in by the stockholder during his lifetime with interest thereon. Like money deposited in a bank, this amount of money is subject to withdrawal on demand. The relationship between the building and loan company and the representative of the heirs or the heirs as stockowners, as distinguished from stockholders is like that of a partnership or trust relationship. No statute of limitation would begin to run on the claim for this fixed statutory liability until a demand for payment is made and refused unconditionally. Demand was made in this case but payment was not refused--instead of refusing payment the company, for various reasons, suggested that payment would be made in order of demand in like cases which amounted to an acknowledgement of the validity of the claim. In this connection, it is asserted by counsel for the company that 'Local wrote C. S. Young on May 11, 1931, advising that each stockholder would be paid in the order in which his notice was received to withdraw funds because of the existing period of depression and readjustment.' The evidence conclusively shows that the method and time of payment suggested by the building and loan company was acceded to by the administrator. The legal effect of this was to withdraw the demand for immediate payment leaving the parties in...