Spencer v. Hibernia Bank

• Decision Date: 28 November 1960
• Citation: 9 Cal.Rptr. 867,186 Cal.App.2d 702
• Parties: Alice Masten SPENCER, as Administratrix with the Will Annexed of the Estate of N. K. Masten, Deceased, Plaintiff and Appellant, v. HIBERNIA BANK et al., Defendants and Respondents. Alice Masten SPENCER et al., Plaintiffs and Appellants, v. HIBERNIA BANK et al., Defendants and Respondents. Marian MEL, as Special Administratrix of the Estate of John Mel, Deceased, Plaintiff and Appellant, v. HIBERNIA BANK et al., Defendants and Respondents. Civ. 19193, Civ. 19194, Civ. 19195.
• Court: California Court of Appeals Court of Appeals

Page 867

9 Cal.Rptr. 867

186 Cal.App.2d 702

Alice Masten SPENCER, as Administratrix with the Will Annexed of the Estate of N. K. Masten, Deceased, Plaintiff and Appellant, v. HIBERNIA BANK et al., Defendants and Respondents.

Alice Masten SPENCER et al., Plaintiffs and Appellants, v. HIBERNIA BANK et al., Defendants and Respondents.

Marian MEL, as Special Administratrix of the Estate of John Mel, Deceased, Plaintiff and Appellant, v. HIBERNIA BANK et al., Defendants and Respondents.

Civ. 19193, Civ. 19194, Civ. 19195.

District Court of Appeal, First District, Division 1, California.

Nov. 28, 1960.

As Corrected on Denial of Rehearing Dec. 27, 1960.

Hearing Denied Jan. 25, 1961.

M. Mitchell Bourquin, George Olshausen, San Francisco, for appellants.

Tobin & Tobin, Sullivan, Roche, Johnson & Farraher, Brobeck, Phleger & Harrison, San Francisco, for respondents.

TOBRINER, Justice.

If, as Judge Jerome Frank has written, each case is but an excursion into history, ¹ we must view the litigation in its historical setting and in the context of the times in which it originated. Within those limitations we have examined the unique structure of the first Hibernia corporation of 1859 and the subsequent corporation of 1864 to determine if, in the posture of the instant cases, appellants establish valid claims to ownership of assets here. The task has necessarily been made more difficult by the long lapse of time since the origin of the alleged rights. Our inquiry convinces us that in substance appellants' contentions succumb to the lack of depositorship of their predecessors in the 1859 and 1864 institutions and, in any event, to the nondescendibility of any alleged rights of such predecessors.

Appellants in these three declaratory relief actions seek as successors in interest of N. K. Masten and John Mel a determination of claimed rights in The Hibernia Bank. The trial court granted respondents' motions for summary judgment and appellants have appealed from the ensuing judgments.

This appeal presents five issues for our determination: ² (1) the applicability of a summary judgment in a declaratory relief action; (2) the alleged presence of factual issues; (3) the effect of respondents' affidavits upon the first count of the second amended complaint; (4) the rights of appellants' predecessors in the 1859 Hibernia corporation and the 1864 Hibernia corporation in the absence of depositorship; and (5) the descendibility of the rights of appellants' predecessors.

The principles which apply to the summary judgment procedure are well settled. In considering such a motion the trial court merely ascertains the presence or absence of factual issues (Walsh v. Walsh, 1941, 18 Cal.2d 439, 441, 116 P.2d 62); it does not decide the nature or the truth of the facts themselves. California Lettuce Growers v. Union Sugar Co., 1955 45 Cal.2d 474, 488, 289 P.2d 785, 49 A.L.R.2d 496. If no triable issues of fact exist and the movant's affidavits would sustain a judgment in his favor, the court will grant the motion. Desny v. Wilder, 1956, 46 Cal.2d 715, 725-726, 299 P.2d 257; Coyne v. Krempels, 1950, 36 Cal.2d 257, 260-261, 223 P.2d 244. However, since this determination must be based upon affidavits without the benefit of cross-examination or trial by jury, the affidavits of the moving party are strictly interpreted while those of the opponent are liberally construed; in this respect the opponent's affidavits need not be composed wholly of evidentiary facts. Eagle Oil & Refining Co. v. Prentice, 1942, 19 Cal.2d 553, 556, 122 P.2d 264. 'In other words, the affidavits are to be construed with all intendments in favor of the party opposing the motion * * *.' Desny v. Wilder, supra, 46 Cal.2d 715, 726, 299 P.2d 257, 261.

Applying these rules, we present a summarization of the basic history of The Hibernia Bank, beginning with the formation of a singular corporation that, although structured as a capital stock corporation, was in essence a mutual savings bank, and the subsequent change to a membership corporation. We discuss other facts involving other issues when we analyze the materiality of those issues.

On February 2, 1859 a 'few Irish gentlemen' met in San Francisco 'for the purpose of taking into consideration the necessity of immediately organizing 'a Savings Bank' chiefly for the benefit of our own people * * *.' Subsequent to the election of a chairman, and in response to his request, William MacCann explained the objectives of the meeting; in so doing he 'urged the necessity of adopting some plan by which the thousands of Irish, residing in this country might have some secure place of deposit for their savings * * *.' At this meeting eight 'Provisional Trustees' were appointed and it was resolved: '[T]he signing of the Preamble ³ to the constitution and the payment of five dollars, shall be the terms of membership, and such shall have a vote until the society shall be fully organized'; and, Mr. R. Tobin shall record the existence of the society in conformity with the laws of the state.

On the 3rd and 8th of March, 1859 John Mel and N. K. Masten, respectively, signed the preamble and paid the five dollars. At a meeting on March 24, 1859 'Mr. Masten introduced for discussion the need of having the Society duly incorporated in conformity with the laws of the State' and the body appointed a committee for that purpose.

The founders of The Hibernia Savings and Loan Society incorporated it under an 1853 act (Stats.1853, p. 87); they executed its certificate of incorporation on the 31st of March and filed it with the county clerk on April 12, 1859. The certificate of incorporation provided that the 'Capital Stock shall be Six Hundred Thousand Dollars, and the number of shares of which said stock shall consist, shall be Six Thousand * * *.' This corporation, hereinafter denominated 'Hibernia of 1859,' adopted by-laws; pursuant to the preamble, the undersigned, among whom were N. K. Masten and John Mel, agreed that these by-laws 'shall govern us, and determine our mutual duties, rights and privileges, as members of such Society.'

Article 5 of these by-laws recited 'Those who shall sign these By-Laws * * * and pay the entrance fee of two dollars, shall be styled and considered members of this Corporation. Those, who, in addition to the above, shall hold one or more shares of its Stock shall further be styled and considered Stockholders. * * * The entrance fee will in no case by repaid or credited back, but shall be considered part of the sinking fund * * *.' Article 21 further provided that '[m]embers shall be at liberty to make deposits in sums of not less than two and one-half dollars,' and article 24 recited 'All deposits withdrawn at any time before the declaration of the dividend for the current half year, shall be entitled to interest at the rate of one-half of one per cent, per month * * *.' The by-laws concluded with article 38: '[N]o alteration of any of * * * these By-Laws shall be made, except by a vote of three-fourths of all the shares which may be represented at the meeting of the Society at which it may be voted upon * * *.'

The incorporators of Hibernia of 1859 planned that the members were to compose the owners, proprietors, and constituents of the corporation. No dividends were ever declared or paid upon the outstanding stock of this corporation; rather, all dividends were paid to the members upon their deposits. Though incorporated as a stock corporation, Hibernia of 1859 issued stock only during the period June 14, 1859 to November 29, 1861 and by June 27, 1863 all but four certificates, whose whereabouts were unknown, had been retired and cancelled. Thereafter, the corporation consisted of members only. And, though only twenty persons signed this Hibernia certificate of incorporation, some 5,479 persons by August 29, 1864 became members of this Hibernia.

Both Masten and apparently Mel paid the two dollar entrance fee, signed the by-laws, and made deposits in Hibernia of 1859. Masten withdrew his original deposit, making subsequent deposits and withdrawals from time to time thereafter, but on July 27, 1864 he withdrew his entire balance, closed his account and never again became a depositor. By December 1, 1861 Mel withdrew his deposit and likewise never again became a depositor.

On August 29, 1864, the board of trustees, in accordance with the membership's authorization, elected to incorporate under 'An Act to provide for the Formation of Corporations for the Accumulation and Investment of Funds and Savings.' Stats. 1862, p. 199, as amended by Stats.1864, p. 531. And on August 30, 1864 they filed a new certificate of incorporation, which, pursuant to section 2 of the act, limited the corporate existence to fifty years. The act permitted all savings and loan societies, claiming in good faith to be incorporated under the laws of this state, to incorporate as savings banks without capital stock; it further provided that the corporate powers be exercised by a board of directors. Among other corporate powers the act included the authority 'To make by-laws * * * for the organization of the company * * * the regulation of its affairs * * * and the time and manner in which any person may become, or may cease to be, a member of the corporation * * *.' Stats.1862, p. 200.

The certificate of this Hibernia Savings and Loan Society, hereinafter called 'Hibernia of 1864,' provided for a non-stock membership corporation. Hibernia of 1864 acquired all the deposits and properties of the 1859 corporation including the two dollar entrance fees. Hibernia of 1864 operated under the 1859 by-laws until September 29, 1864, when the board of directors, without any vote by the membership, repealed the prior by-laws, and adopted new by-laws.

These new by-laws provided: 'Art. 4th. All persons who were members of The Hibernia Savings and Loan Society on the twenty-ninth day of August, 1864, ⁴ shall be deemed and considered...