MacMurray v. Sidwell

• Decision Date: 27 November 1900
• Docket Number: 19,437
• Citation: 58 N.E. 722,155 Ind. 560
• Parties: MacMurray, Receiver, et al. v. Sidwell
• Court: Indiana Supreme Court

58 N.E. 722

155 Ind. 560

MacMurray, Receiver, et al. v. Sidwell

No. 19,437

Supreme Court of Indiana

November 27, 1900

From the Delaware Circuit Court.

Reversed.

James Bingham and Jesse Long, for appellants.

G. H Koons, H. F. Wilkie and Henrietta Wilkie, for appellee.

OPINION

Baker J.

On May 14, 1898, in a suit begun in the Delaware Circuit Court by Charles and Eudora Ticknor against the National Home, Building and Loan Association, organized and existing under the laws of Illinois and having its home office at Bloomington, Illinois, the association was found to be insolvent and appellant Francis James was appointed receiver of its assets in Indiana. On May 19, 1898, in a suit pending in the Circuit Court of the United States for the southern district of Illinois, the association was found to be insolvent and appellant James E. MacMurray was appointed receiver of all its assets save those in Indiana. Thereafter and during May, 1898, Mr. MacMurray was appointed ancillary receiver by the Circuit Courts of the United States for the various districts in which the association had done business. On October 16, 1899, appellee, Andes M. Sidwell, a stockholder of the association who resides in this State, on behalf of himself and all other Indiana stockholders, filed a petition in the receivership case pending in the Delaware Circuit Court, asking the court to order Mr. James to pay the Indiana stockholders in full from the Indiana assets and pay the balance only to Mr. MacMurray. Thereupon Mr. MacMurray obtained an order from the Circuit Court of the United States for the southern district of Illinois, directing him to intervene in the cause in the Delaware Circuit Court. By leave of the Delaware Circuit Court Mr. MacMurray and Mr. James, as receivers, filed an intervening petition, asking among other things that the Indiana assets be added to the other assets and that the whole be distributed equally among all the stockholders in proportion to their payments on stock. Mr. Sidwell, on behalf of himself and all other Indiana stockholders, was permitted to file a demurrer to the receivers' petition for want of facts. The court sustained the demurrer, and, on the receivers' refusal to plead further, entered judgment that they take nothing by their petition. The court granted the receivers' prayer for an appeal to this court.

The material facts in the petition are these: The association was organized in February, 1890, under the statutes of Illinois. The statutes, the association's charter and its by-laws are set forth. The charter and by-laws are similar in scope to those of associations organized in this State. The statutes, in spirit, are the same as Indiana's. The association was formed to do a "building and loan" business, which, as Endlich says, "in its essential plan and nature is the same all over the world". It transacted business in various states until the appointment of the receivers. There are no general creditors. The claimants in all the states are stockholders. At the time of the appointment of the receivers the total claims amounted to $ 579,388 and the appraised value of all the assets to $ 376,640. In some of the states the assets exceeded the claims. In the greater number of them the claims exceeded the assets. In Indiana the assets were $ 79,625 and the claims $ 54,329. The assets consisted of evidences of loans and of real estate obtained in collecting loans. The loans were all made at the home office in Bloomington, Illinois. The Indiana assets originated from loans from a common fund created by proportionate contributions of all stockholders regardless of state lines. On entering Indiana in 1890 the association complied with the foreign corporations act of 1852 by filing in each county the required certificates of agents' authority and of the association's consent to be sued by process served on Indiana agents. The association did not make the deposit required by the foreign building and loan associations act of 1893, which came into force on May 18, 1893. After April 1, 1893, the association made no new contracts, issued no new shares, executed no new loans, in Indiana; and did no business in the State other than to collect dues on stock, and interest and premium on loans, already in existence. Mr. James has over $ 20,000 on hand in cash. Mr. MacMurray has in his hands all of the assets of the association except those in Indiana, and all the claims of stockholders except of Indiana stockholders. In directing Mr. MacMurray to intervene in the Delaware Circuit Court, the Circuit Court of the United States for the southern district of Illinois entered an order indicating the plan of distribution that would be carried out if possible, namely, that the two courts should cooperate to the end that there be one and a harmonious administration of the estate by distributing all the assets wherever collected among all the stockholders wherever resident, and that if Mr. James be ordered from time to time to turn over to Mr. MacMurray the net proceeds of Indiana assets Mr. MacMurray shall treat the claims of Indiana stockholders approved by the Delaware Circuit Court as adjudicated claims, and that Indiana stockholders shall receive the same distributions, according to the respective amounts paid in by them on stock, as are received by the stockholders of any other state.

This association was a cooperative enterprise. It dealt only with its own members. It was a corporate copartnership, so to say. Mutuality and equality were its essential working principles. Every stockholder, whether in Indiana or another state, contributed to a fund in which all had interests in common. If the enterprise had been successful, all would have received dividends proportionate to their investments as stockholders. On insolvency, the assets should be distributed according to the nature and source of the fund and of the claims upon it. The fund is the common property of all the stockholders and the claims upon it are the demands of all the stockholders for a distribution. The loss should be borne by those who would have shared the profits, and in the same proportions. Marion Trust Co. v. Trustees Edwards Lodge, 153 Ind. 96, 54 N.E. 444; Huter v. Union Trust Co., 153 Ind. 204, 54 N.E. 755; James v. Sidwell, 153 Ind. 697, 54 N.E. 752.

The doing of a building and loan business in Indiana, whether by a domestic or a foreign association, contravenes neither the statutes nor the public policy of this State. Security Savings Assn. v. Elbert, 153 Ind. 198, 54 N.E 753; International Bldg. Assn. v. Wall, 153 Ind. 554, 55 N.E....