Lawhead v. Board of Trustees of Grand Lodge, A.F. & A. M. of W. Va.
| Decision Date | 30 October 1934 |
| Docket Number | 7973. |
| Citation | 176 S.E. 860,115 W.Va. 475 |
| Parties | LAWHEAD v. BOARD OF TRUSTEES OF GRAND LODGE ANCIENT FREE AND ACCEPTED MASONS OF WEST VIRGINIA. |
| Court | West Virginia Supreme Court |
Submitted October 10, 1934.
Syllabus by the Court.
1. Code, 31-8-32, confers upon courts in chancery jurisdiction to entertain a suit against a single stockholder in a bank to collect the statutory double liability assessed against his stock under Code, 31-4-16.
2. Code, 31-8-32, conferring upon courts in chancery jurisdiction to entertain suits against single stockholders of banks for the purpose of enforcing the double liability assessed against their stock under Code, 31-4-16, does not violate section 13 of article 3 of the Constitution preserving the right of trial by jury in actions at common law.
Appeal from Circuit Court, Monongalia County.
Suit by C. E. Lawhead, receiver of the Federal Savings & Trust Company, against the Board of Trustees of the Grand Lodge Ancient Free and Accepted Masons of West Virginia. Judgment for plaintiff, and defendant appeals.
Affirmed.
H. H Rose, Howard Boggess and E. M. Showalter, all of Fairmont for appellant.
George R. Farmer, of Morgantown, for appellee.
This suit was brought in the circuit court of Monongalia county to recover from the defendant trustees a double assessment laid upon $4,300 par value of their stock in Federal Savings & Trust Company. After a demurrer to the bill of complaint was overruled, a directed judgment was rendered for the plaintiff in the amount sued for.
The question presented upon this appeal is whether the demurrer to the plaintiff's bill should have been overruled. The single proposition advanced to sustain the demurrer is that the demand sued upon is a bare legal demand, and that the remedy at law is full, adequate, and complete. To this proposition, which, upon its face, appears to be sound, the plaintiff, to sustain his bill of complaint, replies that the Legislature, by Code, 31-8-32, has conferred upon courts of chancery the right to hear and determine suits for the recovery of the "double" assessment of stockholders in banks, whether those suits be against many or only one. The defendant then says that, granting by way of argument that the purpose of the Legislature was to confer chancery jurisdiction, the Legislature was without power to do so because of the constitutional provision preserving the right of trial by jury in actions at common law. Section 13, art 3, Const. Then the plaintiff says that the claim sued on is a liability created by the very Constitution in which the provision invoked by the defendant (preservation of the right of trial by jury) is contained, and that although the right here asserted rests in contract, it is a creature of the Constitution and not of the common law, and, therefore, since no right of trial by jury as to that right could have existed at the time of the adoption of the Constitution (as no such right of action then existed), that it does not fall within that class of cases with reference to which the right of trial by jury was intended to be preserved.
The Legislature, in the absence of constitutional inhibition, has the power to confer jurisdiction upon courts of equity even in the case of purely legal demands. The only inhibition of that power is the constitutional provision preserving right of trial by jury. It is to be observed that the right of trial by jury is not conferred by the Constitution; that right is simply preserved as it existed at common law when the Constitution was adopted. Without doubt, this right of trial by jury existed as to legal demands at common law. Therefore, as to such legal demands at common law, since the right of trial by jury existed at the time of the adoption of the Constitution, it would seem clear that that right must continue, and that it cannot be infringed by the Legislature by transferring jurisdiction to courts in chancery, where no jury trial as a matter of right, and as at common law, exists. The first problem presented in this case seems to be the question of whether the right sought to be asserted in this bill is a right as to which the defendant would be entitled to trial by jury at the time the Constitution of West Virginia was adopted.
This court has already held that the right to collect double assessments against stockholders of insolvent banks is not a penalty, but that it grows out of contract. Pyles v Carney, 85 W.Va. 159, 101 S.E. 174; Lawhead v. Davis, 112 W.Va. 13, 163 S.E. 629; Lawhead v. Garlow (W. Va.) 171 S.E. 250. This would incline one to the opinion that because it does grow out of contract, and because contract forms the background and basis for most of the common-law actions that existed at the time of the adoption of the Constitution, that this cause of action would have to be catalogued as among those to which the right of trial by jury naturally appertains. However, although the contract for the purchase of corporate stock in a bank is the basis for the liability, it is made so by operation of law and not, in all strictness, by the free agency of the parties to the contract. The parties cannot stipulate that the liability shall not come into existence. They cannot limit it, neither can they anticipate it by arranging different terms for its discharge in advance. It is entirely probable that many purchasers of stock in banks have become bound on paid-up subscriptions, without knowing that such a provision of law attached to the obligation of their stock purchase. No such situation is known to the common law of contracts. It may be true that the provisions of the Constitution and of the statutes will be read into a contract. We think, however, in spite of the fact that upon the making of a contract for the purchase of stock in a bank, the provisions of the constitution of West Virginia and of the statute respecting that contract in existence at the time it was made, become a part thereof, and that, in a certain sense, for that reason the rights springing out of the contract might be said to be...
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