Petition for Rehearing
| Decision Date | 12 October 1943 |
| Docket Number | 2234 |
| Parties | PETITION FOR REHEARING |
| Court | Wyoming Supreme Court |
Rehearing denied.
Mahlon E. Wilson, of Salt Lake City, Utah, and W. E. Mullen, of Cheyenne, in support of petition for rehearing for respondent. There was a brief filed by Messrs. Wilson and Mullen.
A plaintiff must recover, if at all, on the theory adopted in his pleading. Altman v. Schuneman, 39 Wyo. 414; 273 P. 173. The payment in part was a conclusive admission of the existence of the relation of debtor and creditor as between plaintiff and defendant: Diefenderfer v. State, 13 Wyo. 387; 80 P. 667. Same case on rehearing, 14 Wyo. 302; 83 P. 591; 3 Corpus Juris, P. 665; P. 669; Tomboy Gold Mines Co. v. Brown, 74 F. 12 (8 C. C. A.); Ewing v Ewing, 161 Ind. 484; 69 N.E. 156; Elwert v Marley, 53 Ore. 591; 99 P. 887; 101 P. 671; 133 Am. St 850. The issuance and sale of the investment bonds is the doing of a savings and loan or investment business: Western Bond & Mortgage Co. v. Crews, 112 Ore. 663; 231 P. 138. At the time of the transactions between the plaintiff and the defendant both parties must have contemplated that the plaintiff was loaning money and the defendant was borrowing the same: Bettle v. Republic Savings & Loan Assn., 71 N. J. Eq. 613; 64 A. 176. A corporate building and loan association having capital stock is an entity distinct from those who own the shares of that capital stock: Albany Mutual Building & Loan Ass'n. v. City of Laramie, 10 Wyo. 62; 65 P. 1011. There is a distinction between "loans" and "deposits": Schippers v. Kempkes, 67 A. 1042. A loan made by a state bank in excess of the amount authorized by statute does not make the loan void: Burns v. Corn Exchange Bank, 33 Wyo. 474; 240 P. 683. On the question of ultra vires: Lander State Bank v. Putnam, 40 Wyo. 312; 276 P. 926; International Trust Co. v. Davis Manuf. Co., 70 N.H. 118; 46 A. 1054; Rankin v. Emigh, 134 Wis. 565; 27 L. R. A. (N. S.) 243; 115 N.W. 128. Distinction between a pledge of assets to secure a deposit of public funds and a pledge to secure a private deposit: Schumacher v. Eastern Bank & Trust Co., 52 F.2d 925 (4 C. C. A.). When the Statutes are invoked for the purpose of making void articles of incorporation in a suit like the one at bar, such invocation constitutes a collateral attack: Union National Bank v. Matthews, 98 U.S. 631; 25 L.Ed. 188; Sedg. Stat. and Const. Constru., 2nd Ed., p. 73.
A petition for a rehearing has been filed herein, accompanied by an exhaustive brief. Perhaps the case may be said to be in the twilight of doubt. At least it gave the writer hereof considerable trouble upon the original investigation, so that the petition for rehearing is welcome herein, giving us an opportunity to again consider the questions involved and briefly review, herein, the main and essential points for ultimate decision, without saying that every statement in the original opinion was correct, for it presents a number of complicated points.
1. Counsel again argue that the defendant cannot collaterally attack its original articles of incorporation. But, these original articles no longer exist, and hence no attack could be, or is made, upon them. Sec. 17-119, Wyo. Rev. St. 1931, changed these original articles, and modified them in so far as inconsistent with the statute. We cannot ignore the plain reading of the statute.
II. Counsel also again argue that the deposit made by the defendant in court estops it to question the fact that the plaintiff is a creditor of the defendant. We think that the authorities cited in the original opinion show that counsel are in error. This case illustrates that error. From the very beginning of the case, commencing with the answer filed by the defendant, and throughout the trial in the lower court, and in this court, the defendant has insisted, and based its defense on the fact that the plaintiff is a member of the defendant association, and not a creditor. It would seem to be rather strange that such express claim, so insisted on throughout, could be wiped out by a deposit in court, which, at most, could be considered an implied admission. We do not think that the law recognizes such anomaly.
III. Counsel argue, as they did in the case originally, that even though the corporation borrowed money, without being authorized to do so, still it cannot question its power in that regard, and that under the doctrine of unjust enrichment, it must pay the money back. We conceded that in the original opinion, citing Lander State Bank v. Putnam, 40 Wyo. 312; 276 P. 926. At least we did not question that rule. But the whole comes back to the point: Was the money which was deposited by the plaintiff a loan, or did he become a member of the defendant association?
IV. The crucial questions in this case are (a) whether or not the defendant became, under the law of 1927, a building and loan association, and (b) whether or not the defendant is a member thereof, rather than a creditor. We discussed both of these questions exhaustively in the original opinion, and came to an affirmative conclusion in both instances. The difference of opinion between counsel for plaintiff and this court lies in the fact that counsel will not, or refuse to, give to our statutes the force and effect which this court has felt constrained to give them. In other words, the whole case hinges on a matter of statutory construction. We may briefly recapitulate the reasons why we feel compelled to adhere to these conclusions. The statute states that a corporation which issues savings certificates is a building and loan association. The evidence shows that the defendant issued such certificates, and apparently nothing except such certificates. These major and minor premises being unquestioned, it follows by the inexorable laws of logic that the defendant is a building and loan association under the statute, and no amount of argument to the contrary can overcome that inevitable conclusion. We are unable to see the force of the contention that the statute intended to affect only building and loan associations which were completing their existence under the act of 1890. No such indication is contained therein. In fact, as we pointed out in the original opinion, the bill for the act of 1927 was intended to supplant all legislation whatever on the subject and be inclusive of all corporations doing business like that, or similar to that specified in section one of the act, and by amendments, made only two exceptions, namely those relating to corporations organized under what are now articles 2 and 3 of chapter 17, Rev. St. 1931. Not only is section 17-101 of the Rev. St. 1931 all inclusive with the exceptions named, clearly embracing all hybrid organizations such as the defendant was, but it is further provided by section 17-119 that a corporation doing business similar to that specified in article 1 chapter 17 of the statute shall be a building and loan association and governed by the provisions of that article. Not only did the defendant do a business similar to that contemplated in that article, but it did the very identical business so contemplated. Counsel argue that the statute could have no such far-reaching effect, as, on its face, it has, for the reason that it would change the defendant association fundamentally, and that such fundamental change is not permissible. It may be mentioned in this connection, that the stockholders in control of the corporation at the time when the act of 1927 was passed are not here complaining of the change wrought by the statute. Aside from that, counsel conceive the main purpose of the defendant to be to have a fixed capital stock, and through it to have the control of the company. We may admit that the legislature would not be authorized to make a fundamental change in the corporate defendant, Drew v. Beckwith, Quinn & Co., 57 Wyo. 140; 114 P.2d 98. But, the change mentioned by counsel is not such, we think, as to come within the definition of a fundamental change, at least so far as plaintiff is concerned. Articles of incorporation are amended daily changing the capital stock, or even changing the control of the association. A fundamental change would exist, if the business of the association were entirely changed--if, for example, a sugar company were transformed into one for ginning cotton. In this case, one at least of the purposes for which the corporation was organized, was to do business as a building and loan association. Its capital stock was left unimpaired by the statute; only additional, and different kinds of shares of stock were permitted to be issued, thus giving the control of the company to all of the holders of the various kinds, thereof. We think no fundamental change, of which plaintiff can complain, was made. See 13 Am. Jur. 240; Fletcher Cyc. of Corporations (Permanent edition) Vol. 7, sec. 3696.
In view of the fact that it cannot be disputed that the defendant association is a building and loan association, it would seem to be clear, that we must necessarily find that the plaintiff became a member of it. As we pointed out in the original opinion, the defendant (aside from the guaranty stock) issued nothing but saving certificates, either on the installment plan, or on the paid-up plan. That fact appears to be undisputed. Hence, unless they are members, there would be nothing, to which the theory applicable to building and loan associations of treating investors in such an association on a footing of equality, could apply. In other words, in such a case, the defendant, shorn of the power, or duty, of treatment of equality, could hardly be said to be a building and loan association, in spite of...
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