Treigle v. Acme Homestead Ass'n

CourtSupreme Court of Louisiana
Citation181 La. 941,160 So. 637
Docket Number33065
PartiesTREIGLE v. ACME HOMESTEAD ASS'N
Decision Date04 March 1935

Rehearing Denied April 1, 1935

Appeal from Civil District Court, Parish of Orleans; Walter L Gleason, Judge.

Suit by Camille V. Treigle against the Acme Homestead Association. Judgment for plaintiff, and defendant appeals.

Judgment annulled and reversed, demand of plaintiff rejected and suit dismissed.

Scott E. Beer, of New Orleans, Blanchard, Goldstein, Walker & O'Quin, of Shreveport, Carroll, McCall, Plough & Carroll and A. D. Danziger, all of New Orleans, Hudson, Potts & Bernstein, of Monroe, and Legier, McEnerny & Waguespack, Roger Meunier, Hyman Mithoff, D. J. Murphy, Spearing & McClendon, P. H. Stern, Delvaille H. Theard, and Weiss, Yarrut & Stich, all of New Orleans, for appellants.

Alex W. Swords, A. Giffen Levy, Hugh M. Wilkinson, and A. B. Leopold, all of New Orleans, for appellee.

Gaston L. Porterie, Atty. Gen., and James O'Connor, Asst. Atty. Gen., for J. S. Brock, State Bank Commissioner and Supervisor of Homestead and Building and Loan Associations.

O'NIELL Chief Justice. ODOM, J., dissents.

OPINION

O'NIELL, Chief Justice.

The plaintiff, being a withdrawing shareholder in the Acme Homestead Association, obtained a judgment against the association, declaring that sections 53, 54, 55, and 56 of Act 140 of 1932 are unconstitutional, and enjoining the association from obeying these provisions of the statute. The homestead association has appealed from the decision. There are five other such suits, in each of which the plaintiff obtained a similar judgment and the defendant, homestead association, has appealed, namely, Samuel Sokolsky v. Equitable Homestead Association (La. Sup.) 181 La. 970, 160 So. 646; Camille Treigle v. Thrift Homestead Association (La. Sup.) 181 La. 971, 160 So. 646; Treigle Sash Factory, Inc., v. Conservative Homestead Association (La. Sup.) 181 La. 972, 160 So. 647; Treigle Sash Factory, Inc., v. Union Homestead Association (La. Sup.) 181 La. 973, 160 So. 647, and Joseph Mitchell v. Conservative Association (La. Sup.) 181 La. 973, 160 So. 648.

The only question is whether sections 53, 54, 55, and 56 of the Act of 1932 are unconstitutional, as the judge of the civil district court has decided. The plaintiff pleads that the provisions of these sections, which materially change the method of paying claims of withdrawing shareholders in building and loan associations, impair the obligations of contracts, and divest the withdrawing shareholders of their contract rights, and are therefore violative of section 10 of article 1 of the Constitution of the United States, and section 15 of article 4 of the Constitution 1921 of Louisiana; and that these provisions of the statute deprive the withdrawing members of building and loan associations of their property without due process of law, and deny to them the equal protection of the laws, and are therefore violative of section 1 of the Fourteenth Amendment of the Constitution of the United States, and section 2 of article 1 of the Constitution of Louisiana.

By section 7 of Act No. 120 of 1902, as amended by Act No. 280 of 1916, which was in effect when the plaintiff became a shareholder in the Acme Building & Loan Association and when he applied for withdrawal, it was provided that a member of a building and loan association might withdraw the amount of his shares at any time by giving written notice of his intention so to do, and that he would be entitled then to receive the amount paid in by him, and such proportion of the profits as the charter and by-laws might prescribe, less all fines, charges, expenses, and losses accrued or contingent at the time of notice of withdrawal, as the board of directors might determine. It was provided also that every building and loan association should keep a register of the notices of withdrawal, and should pay the amounts due to the withdrawing shareholders in the order in which their notices were filed. It was provided further, that, whenever the proportion of receipts ordinarily made applicable to the demands of withdrawing members by resolution of the board of directors was not sufficient to pay all of such demands within sixty days from the date of notice, one-half of the receipts of the association thereafter should be applied to the liquidation of the claims of the withdrawing members until all deferred claims were paid.

In State ex rel. Orlando v. Reliance Homestead Association, 174 La. 980, 142 So. 146, and in Harding Realty Co. v. Blanchard, 179 La. 430, 154 So. 47, 49, it was held that the term "receipts," in the provision of the statute requiring building and loan associations to apply one-half of their "receipts" to the payment of withdrawals if they were sixty days in arrears, did not mean "gross receipts," but meant "net receipts," or funds which might "reasonably be made available for the payment of such claims after paying the primary obligations and necessary expenses of the association."

In accordance with the provisions of section 7 of the statute then in effect, and the pertinent provisions of the charter and by-laws of the association, the plaintiff gave notice of his intention to withdraw the amount of his shares; and more than sixty days had gone by after the notice was given, when the Act of 1932 came into effect. If the provisions of the act of 1902, as amended by the Act of 1916, had not been superseded as they were by the Act of 1932, the plaintiff would have been entitled to receive the amount of his shares, if and when all previous applications on the withdrawal list would have been paid. And the plaintiff had a right of action to compel the association to apply one-half of its net receipts to the liquidation of the claims of the withdrawing members until all deferred claims were paid.

The Act of 1932 is a complete codification of the laws governing building and loan associations; and, by the terms of the repealing clause, the act supersedes the Act of 1902 and all amendments made previous to the adoption of the Act of 1932. The purport and effect of sections 53, 54, 55, and 56 of the Act of 1932, under the rubric "Withdrawals," was to abolish the provisions of section 7, of the Act of 1902, as amended by the Act of 1916, so far as those provisions required building and loan associations to pay the claims of withdrawing shareholders in full in the order of the filing of their notices, and to allocate one-half of the net receipts to the payment of such claims if they were not all paid within sixty days from the date of the notice of withdrawal. Section 53 of the new act allows the board of directors of a building and loan association, before appropriating receipts to the liquidation of the claims of withdrawing members, to use such receipts and funds as are needed for operating expenses and for the maintenance and improvement of repossessed property, and for the payment or renewal of obligations of the association, and the creation of cash reserves needed for declaring dividends. Section 54 of the new statute provides, as a substitute for the system of paying withdrawals in full in the order of seniority, a new method of distribution, by which each applicant for withdrawal is entitled to one-fourth of the amount of his shares when his name comes to the top of the withdrawal list and his name is then sent to the foot of the list, to await his turn to receive another fourth of the amount of his shares, when his name comes again to the top of the list. All of that, however, is said to depend upon there being funds available to meet the demands of withdrawing members. If a fourth of a claim at the top of the withdrawal list is less than $ 500 the applicant is entitled to the minimum of $ 500, and if the whole claim does not exceed $ 500 it is paid in full, if there are funds available to pay the claim. Every new application takes its place at the foot of the list. The association is allowed, in its discretion, to pay in full and on demand the claim of any withdrawing member whose claim is less than $ 100, and may pay a sum not exceeding $ 100 per month to a withdrawing member in emergent circumstances. This section of the statute provides also that, whenever the amount of the withdrawals exceeds 60 per cent. of the accumulated capital of the association, the state bank commissioner, who is ex officio supervisor of homestead and building and loan associations, may, if he believes that the condition of the association justifies such action, direct that the payment of withdrawals in the order stated shall be discontinued, and that they shall be paid thereafter on a pro rata basis; the distribution to be made to all members whose names were on the withdrawal list on a date not less than ten days previous to the issuing of the distribution checks. This section of the statute provides, finally, that installment shares which have a fixed maturity, and on account of which no installment has been delinquent longer than a year during a period exceeding seven years, shall, at their maturity, be preferred over all shares on the withdrawal list, and that no other shares on the withdrawal list shall be cashed until such installment shares have been paid. Section 55 of the statute provides that a member who has given notice of his intention to withdraw shall remain a shareholder, and be classified as a withdrawing member; that, except as stated in section 53, no liabilities or losses of the association of a date subsequent to the filing of his notice of withdrawal shall be chargeable or assessable against his shares; and that, from the date of his application to withdraw, and as long as his application for withdrawal has not been withdrawn, he shall not be entitled, except as...

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18 cases
  • Rocker v. Cardinal Bldg. & Loan Ass'n of Newark
    • United States
    • New Jersey Supreme Court
    • April 30, 1935
    ...A. L. R. 526; State ex rel. Bettman v. Court of Common Pleas, 124 Ohio St. 269, 178 N. E. 258, 78 A. L. R. 1079; Treigle v. Acme Homestead Association, 181 La. 941, 160 So. 637 (Louisiana Supreme Court decided March 4, 1935). The building and loan statutes enacted for the protection of the ......
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    ... ... 317, 55 S.Ct. 428, 79 L.Ed. 907, ... 95 A. L. R. 1346; Treigle v. Acme Homestead ... Ass'n, 181 La. 941, 160 So. 637; Harris v. Monroe ... ...
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