Pioneer Savings & Loan Co. v. Peck

• Decision Date: 14 December 1898
• Citation: 49 S.W. 160
• Court: Texas Court of Appeals
• Parties: PIONEER SAVINGS & LOAN CO. et al. v. PECK et al.<SMALL><SUP>1</SUP></SMALL>

49 S.W. 160

PIONEER SAVINGS & LOAN CO. et al. v. PECK et al.¹

Court of Civil Appeals of Texas.

December 14, 1898.

Appeal from district court, Gonzales county; M. Kennon, Judge.

Action by Peck & Fly against the Pioneer Savings & Loan Company and another. From a judgment for plaintiffs, defendants appeal. Affirmed.

John A. Green, Sr., John A. Green, Jr., and Geo. D. Emery, for appellants. Harwood & Walsh and Thos. McNeal, for appellees.

NEILL, J.

This suit was instituted on the 29th day of January, 1897, by appellees against appellants, to enjoin the sale of certain real property of appellees, situated in Gonzales county, under the deed of trust mentioned in our conclusions of fact, to cancel said deed of trust, and to recover a balance of $5,000, with interest from the 6th day of January, 1897, alleged to be due by appellant corporation to appellees upon its contract or stock certificate mentioned in our conclusions of fact. An original attachment was sued out by appellees at the time the suit was instituted, and afterwards levied upon real estate of appellant corporation, situated in several counties of this state. A writ of injunction, restraining the sale, was also issued. The appellees alleged in their petition that they were residents of Gonzales county, Tex.; that the Pioneer Savings & Loan Company was a foreign corporation, duly incorporated under the laws of the state of Minnesota, and having its place of business in the city of Minneapolis, Hennepin county, Minn.; that appellant John F. Elliott was a resident citizen of Dallas county, Tex.; and that appellant corporation had no agent in this state. On the 5th of July, 1897, the appellant John F. Elliott, trustee in said deed of trust referred to, filed his original answer, which contained a general demurrer, a special exception, a general denial, and a special plea setting up in full the terms of the trust deed declared on by appellees, but asserted that no demand had been made on him by his co-defendant to execute the power of sale contained in said instrument. On the same day the Pioneer Savings & Loan Company filed its petition and bond for the removal of this cause from the district court of Gonzales county to the circuit court of the United States in and for the Western district of Texas, at San Antonio. The ground for removal alleged in the petition is that while John F. Elliott, the co-defendant, would answer to the merits, as a citizen of Texas, the Pioneer Savings & Loan Company is a resident of the state of Minnesota, and that the substantial controversy in this case is between the plaintiff and the loan company, and that there is a separable controversy between plaintiff and said loan company, in which the said Elliott is not interested. On the 6th day of July, 1897, Peck & Fly filed special exceptions to the petition for removal, which were on the same day sustained, and the removal denied. Thereupon the Pioneer Savings & Loan Company entered its protest against the action of the district court of Gonzales county retaining jurisdiction of the cause, and in open court requested the clerk of said court to make out for its use a transcript of the record in this cause, to be filed in said circuit court of the United States. The loan association then filed its motion to quash the notice served on it as a nonresident defendant, whereby it was cited to appear and answer in this cause, on the ground that the notary's certificate to the oath of the person making the service did not sufficiently describe his official character. This motion was sustained by quashing the service on said appellant, and the case was for that reason continued by operation of law to the January term, 1898. Appellant then procured a transcript of the record in this cause from the district clerk, and filed it, with its petition for removal and bond, in the circuit court of the United States for the Western district of Texas, at San Antonio. The case was docketed in said court under its present style, and numbered 630. On November 29, 1897, appellees presented in that court their motion to remand the cause to the district court of Gonzales county, on the ground that the United States court had no jurisdiction to determine said cause; and, after argument, said motion was granted, and the cause remanded to the district court of Gonzales county, Tex. Afterwards, at the January term, 1898, of the district court of Gonzales county, appellant company filed therein its three several pleas in abatement. The first challenged the jurisdiction of the court, on the ground that appellant was a foreign corporation, with its principal office in Minneapolis Hennepin county, Minn.; that it had no agent in Gonzales county, but had an agent, to wit, W. L. Diamond, residing in Dallas county, Tex. The second plea in abatement set up an agreement in the certificate sued upon, to the effect that any suit or action brought against appellant company should be brought within six months after the right of action accrued, and only in the county of Hennepin, state of Minnesota. Its third plea in abatement set up the sixteenth section of article 2 of the by-laws, on the back of the certificate, in which it is provided that the union should have 90 days after filing proof of claims, and approval thereof, and after the maturity of shares, whether by death, withdrawal, or otherwise, in which to pay the same, and that the certificate matured January 1, 1897, and the suit was filed on January 22, 1897. The first plea in abatement was, on exceptions of appellees, stricken out, because it did not state that any part of their cause of action accrued in Gonzales county. Exceptions to the second plea in abatement were also sustained. To the third plea in abatement appellees pleaded, in replication, facts which they alleged constituted a waiver of the section of the by-laws mentioned in said plea. The appellant company excepted to the sufficiency of the replication, but its exception was overruled. It then filed a general denial, and a long special plea, in which it was contended that appellees, by accepting the certificate for stock sued upon, became members of a mutual corporation, liable to share its losses as well as its profits, and that, though appellant may have agreed to pay $100 at the end of 6½ years for each share of stock, such agreement was made subject to the terms and conditions of the by-laws attached to the certificate; that there had been such great loss and expense incident to the business of the corporation that the actual book value of appellees' stock was $5,980, instead of $10,000, at its supposed maturity date; and that, upon an adjustment of the affairs of appellees and appellant, the latter was indebted to the former in the sum of $980, instead of the $5,000 sued for, which sum of $980 was by appellant tendered in its pleadings to appellees. The case was tried before the court without a jury, and judgment rendered in favor of appellees against both appellants, perpetuating the injunction, and against the appellant corporation for the sum of $5,000, with interest, together with a foreclosure of appellees' attachment lien. From this judgment the Pioneer Savings & Loan Company, as well as John F. Elliott, has appealed to this court.

Conclusions of Fact.

(1) The National Building, Loan & Protective Union was organized and incorporated on January 13, 1886, under the provisions of the statutes of Minnesota, and conducted its business under the name of the National Building, Loan & Protective Union from the time of its organization to the 26th day of May, 1891, at which time it amended its articles of incorporation so as to change its name to the Pioneer Savings & Loan Company, by which name it has ever since existed and been known. Such change of name and amendment of its articles did not in any way change its identity, but it continued its business under its changed name as formerly; possessing the same assets, with the same powers, duties, and obligations, with the same books and records, and managed by the same officers, as before.

(2) After stating the name, the charter of the National Building, Loan & Protective Union is as follows: "Second. The general nature of the business to be transacted by the corporation shall be carrying on the business of a building and loan association; the purchase, sale, and holding of real estate, lands, tenements, and hereditaments; the building of houses and the improvement of real estate, by the raising of funds to be loaned to its members for such purposes; the issuance of shares of stock of the corporation to its members, and the collection of membership fees, dues, assessments, and premiums on the same; mortgaging and leasing of real estate; loaning and investing the moneys and funds of the corporation. Third. This corporation shall commence on the 12th day of January, A. D., 1886, and shall continue thirty years. Fourth. The capital stock of this corporation shall be fifty million dollars, divided into five hundred thousand shares of one hundred dollars each, which stock shall be represented by the subscription of shares by its members, to be paid in such installments as may be provided by the by-laws of the corporation. The capital stock may be increased at any time by the board of directors as provided by the laws of the state of Minnesota. The corporation may commence business when one thousand shares of stock have been subscribed. Fifth. The highest amount of indebtedness or liability to which this corporation may at any time be subject shall be fifteen thousand dollars above its liabilities to its members on its certificates of shares, but such indebtedness or liability may be increased, for the purpose of redeeming its certificates, to an amount not to exceed fifty thousand dollars." (The sixth, seventh, eighth, and ninth paragraphs of the charter relate to the organization of the union, and are not material to this cause.) "Tenth. ...