Paul v. Craemer

• Decision Date: 05 August 1938
• Docket Number: No. 1402-C.,1402-C.
• Citation: 24 F. Supp. 353
• Court: U.S. District Court — Southern District of California
• Parties: PAUL et al. v. CRAEMER et al.

24 F. Supp. 353

PAUL et al. v. CRAEMER et al.

No. 1402-C.

District Court, S. D. California, Central Division.

August 5, 1938.

John C. Campbell and Franz R. Sachse, both of Los Angeles, Cal., for plaintiffs.

Walter K. Tuller, of Los Angeles, Cal., for defendants.

COSGRAVE, District Judge.

The complaint is by four holders of investment certificates issued by Pacific States Savings & Loan Company, which is a building and loan association, charging acts of improper administration on the part of the officers of the association and asking for the appointment of a receiver to liquidate its assets.

Three of the plaintiffs each allege ownership of a $7,500 full paid investment certificate and a $2,500 Fidelity participating certificate; Plaintiff Redewill alleges ownership of a full paid investment certificate of $1,312.50, a Fidelity participating certificate in a similar amount and a definite term certificate of $2,625. The full paid investment certificates may be eliminated from consideration so far as the jurisdiction of the court is concerned, for admittedly those are not due. The jurisdictional amount of $3,000 is therefore lacking with respect to three of the plaintiffs. To give jurisdiction with respect to the plaintiff Redewill, the Fidelity participating certificate in the amount of $1,312.50 must be added to the definite term certificate of $2,625. It is shown, however, that the Fidelity participating certificates were issued as a result of the taking over of the assets of the Fidelity Savings & Loan Association by the defendant association in 1931, and according to the terms of the agreement by which this was done, the amount payable under such certificates is entirely uncertain, depending upon the result of the liquidation of the assets acquired by the defendant company. The amount due on the definite term certificates seems also uncertain. Building and Loan Association Act, St.Cal.1931, p. 495, § 5.01(d). While the holder is entitled to the principal amount, that right is made subject to Section 6.02 of the Act, St.1931, p. 503, and seems by that section to be made contingent on several conditions not referred to in the complaint. It is apparent, therefore, that there is absent a definite showing of any matured demand that equals the statutory requirement of $3,000 in the case of any of the plaintiffs. Jud.Code § 24(1), 28 U.S.C.A. § 41(1).

It is urged, however, that these claims may be cumulated in order to reach the jurisdictional requirement and plaintiffs cite Troy Bank v. Whitehead & Co., 222 U.S. 39, 32 S.Ct. 9, 56 L.Ed. 81. It is clear, however, that the trust feature existing in that case is absent here. So far as the assets taken over from the Fidelity Building & Loan Association are concerned, the agreement itself expressly negatives a trust relationship. Lion Bonding Co. v. Karatz, 262 U.S. 77, 43 S.Ct. 480, 67 L.Ed. 871 seems to be definite authority against the position of the plaintiffs, and their several demands cannot be cumulated to support the claim of jurisdiction in the federal court.

With respect to the participating certificates, it is conceded that the administration of the affairs of the Fidelity Savings & Loan Association is now in progress as directed by the Building & Loan Association Act of the state of California before a court of the state. Rights thereunder must be asserted and wrongs redressed in the forum now having jurisdiction.

The complaint charges that the Building and Loan Association Act of California impairs the obligation of a contract within the meaning of Article 1, Section 10 of the U. S. Constitution, U.S.C.A. Const. art. 1, § 10, for the reason that, although certain of the securities held by plaintiffs bear 6% interest, nevertheless the payment of more than 4% is prohibited by act of the Legislature (Building and Loan Association Act, Section 8.09, St.Cal.1933, p. 315) passed subsequent to their issuance. This claim seems...