Rocker v. Cardinal Bldg. & Loan Ass'n of Newark

• Decision Date: 30 April 1935
• Court: New Jersey Supreme Court
• Parties: ROCKER v. CARDINAL BUILDING & LOAN ASS'N OF NEWARK.

179 A. 667

ROCKER

v. CARDINAL BUILDING & LOAN ASS'N OF NEWARK.

Supreme Court of New Jersey.

April 30, 1935.

[Copyrighted material omitted.]

Action by Ida Rocker against the Cardinal Building & Loan Association of Newark.

Order in accordance with opinion.

John J. Stamler, of Elizabeth, for plaintiff.

Harold Simandl, of Newark (John Warren, of Newark, of counsel), for defendant.

CLEARY, Commissioner.

Plaintiff is a member of the defendant association and, as such, the holder of five so-called "prepaid," really "paid-up" shares of the defendant association, which shares are now known as "income" shares. Pamph. L. 1932, c. 91; N. J. St. Annual 1932, § 27—R (73), further amended Pamph. L. 1935, c. 59; N. J. St. Annual 1935, § 27—R (73). The said shares were issued to the plaintiff April 10, 1928.

A copy of plaintiff's certificate of shares is annexed to the complaint and reads as follows:

"This is to certify, That Ida Rocker is entitled to Five Shares of stock of the Powerful Building and Loan Association of Newark, New Jersey, transferable in person or by attorney only on the books of the Association upon surrender of this Certificate.

"The maturity value of these shares has been fully paid. An annual profit of six per cent per annum is guaranteed on these shares in lieu of all other profits, payable semi-annually from July 10th, 1928. These shares may be redeemed by this Association at any time on thirty days written notice, and payment of the maturity value thereof, with such guaranteed profits to the date of redemption, and the holder thereof have the right to withdraw these shares at such maturity value and guaranteed profit to date of withdrawal upon giving 30 days written notice to this Association."

The complaint alleges that the name of the defendant association was duly changed from Powerful Building & Loan Association to Cardinal Building & Loan Association.

It is alleged in the complaint that on June 1, 1930, plaintiff filed with the defendant association her written notice of withdrawal and that payment thereof has been postponed by the defendant association for more than six months and that same has not as yet been paid.

The complaint sets forth that on the date of filing the said application for withdrawal, and at the expiration of six months thereafter, sections 49, 52, 73, and 74 of "An Act concerning building and loan associations (Revision of 1925)," being Pamph. L. 1925, c. 65 (Comp. St. Supp. 1930, §§ 27—R (49), 27—R (52), 27—R (73), 27—R (74), were in force.

Section 52 of the said Revision (Comp. St. Supp. 1930, § 27—R (52) provides as follows:

"52. Payment of withdrawals. Withdrawals from any such association shall be paid in the order in which the notices thereof shall have been received, but not more than one-half of the receipts of any one month shall be required to be used for the payment of withdrawal claims, without the consent of the board of directors, until the oldest of such claims then unpaid shall have been on file for a period of six months; but in no case shall payment be postponed for a period longer than six months from the date of such notice, and any member who has given the said notice may sue for and recover the withdrawal value of his shares in any such association in any court of competent jurisdiction, if the same is not paid in six months from the date of the giving of said notice of withdrawal."

The suit in the case at bar was instituted September 10, 1934. Before the institution of this suit, section 49 of the 1925 Revision was amended by Pamph. L. 1932, c. 92, effective April 21, 1932 (N. J. St. Annual 1932, § 27—R (49); section 52 of said Revision was amended by Pamph. L. 1932, c. 102; N. J. St. Annual 1932, § 27—R (52), effective April 22, 1932, and sections 73 and 74 of the said Revision were respectively amended by Pamph. L. 1932, cc. 91, 97; N. J. St. Annual 1932, §§ 27—R (73) and 27—R (74), both effective April 21, 1932.

Section 52 of the statute as amended in 1932 (N. J. St. Annual 1932, § 27—R (52) provides as follows:

"52. Payment of withdrawals. Withdrawals from any such association shall be paid in the order in which the notices thereof shall have been received, but not more than one-half of the total receipts of any such association in any month, as income on investments authorized by section twenty-six hereof, dues on shares pledged with such association to secure loans authorized by paragraphs II and V of section twenty-six hereof and repayment of loans authorized by paragraphs II and V of section twenty-six hereof shall be required to be used for the payment of withdrawals without the consent of the board of directors; provided, however, that if, in any one month the funds of the association required to be available for the payment of withdrawals together with any other funds made available for such purpose by its board of directors, are at any time insufficient for the payment of all withdrawals which have been requested, then the right of any withdrawing member to priority of payment of the withdrawal value of his shares in the aforesaid order shall be only to the extent of five hundred dollars in any one month and if all withdrawing members have received payments in full or on account of their withdrawals to the extent of five hundred dollars in any one month and there is then a balance of such funds available for the payment of withdrawals then said order of priority of payment, to the extent of five hundred dollars shall continue to apply until such balance is exhausted; and no withdrawals shall be paid if the funds available for the payment of matured shares are insufficient to pay all matured shares, the payment of which has been requested within thirty days after maturity; and members who have thus requested payment of their matured shares shall have a right to such payment prior to the rights of members who have requested payment of the withdrawal value of their shares. A member who has filed a notice or request for withdrawal shall not have the right to sue any such association to recover the withdrawal value of his shares or such part thereof as may not be paid, so long as the funds in the treasury of such association are applied as required herein."

The complaint contains five counts. The first count is based upon a cause of action alleged to have accrued to the plaintiff under section 52 of the 1925 Revision, six months after the filing of her written application for withdrawal. The second count is based upon the alleged violation by the defendant association of the mandate of the 1932 amendment of section 52. The third count is based upon an alleged violation of order No. 1 issued by the commissioner of banking and insurance March 14, 1933, under the authority, as alleged, of Pamph. L. 1933, c. 48, § 1; see N. J. St. Annual 1933, § 27—R (86), which it may be noted has been amended by Pamph. L. 1933, cc. 166, 258 (N. J. St. Annual 1933, § 27—R (86), and Pamph. L. 1933, c. 381; N. J. St. Annual 1934, § 27—R (86). The fourth count repeats the first nine paragraphs of the first count and alleges "that on the 8th day of May, 1931, the said defendant did agree in writing with the plaintiff that it would pay to the plaintiff one hundred ($100) dollars each month beginning immediately until such time that the aforesaid prepaid certificate 'Exhibit A,' representing an investment of one thousand ($1,000) dollars would be paid in full" and "that the said defendant has never kept its promise in that regard and failed to make the monthly payments as aforesaid." The fifth count is the same as the fourth count, except that it alleges a promise of the defendant made July 8, 1931, to repay plaintiff's withdrawal in monthly installments of $100, commencing on the first Tuesday of August, 1931.

Plaintiff moves to strike out the further amended answer and separate defenses to the first, fourth, and fifth counts and for judgment on the fourth and fifth counts.

This motion is of the nature of a general demurrer and has opened up the pleadings and as the first faulty pleading must fall, it is appropriate to first examine the affected counts of the complaint to ascertain whether or not they respectively set forth legal causes of action. Defendant association does not move its motion to strike the complaint, reserved in its further amended answer, and the consideration of the affected counts of the complaint is caused by the plaintiff's motion to strike the further amended answer and separate defenses thereto. The quality of the second and third counts of the complaint may not be considered on this motion to strike the further amended answer and defenses to the other counts, for the pleadings are only opened by the motion, as to the counts of the complaint, to which the answer and separate defenses sought to be struck are responsive.

Giving first consideration to the first count of the complaint, it is apparent at the outset, that if the 1932 amendment of section 52 controls the procedure herein that, inasmuch as this count is based entirely upon the statutory privilege to sue contained in section 52 of the 1925 Revision and does not allege the violation by the defendant association of the mandate of the 1932 amendment of said section, that the said count does not state a cause of action and must be struck. The plaintiff contends that the said amendment does not affect what she claims are her vested rights which accrued before its enactment and under the prior statute, and that, if the said amendment be construed as affecting her alleged vested right to sue, that it is unconstitutional and within the inhibitions of article 1, § 10, of the Constitution of the United States and of section 1 of the Fourteenth Amendment of said Constitution, and of article 4, § 7, paragraph 3, of the Constitution of the state of New Jersey, and, further, that the said amendment so construed cannot affect plaintiff's vested rights as alleged in the...