Southern Building & Loan Ass'n v. Price

42 L.R.A. 206, 41 A. 53, 88 Md. 155, 1898 Md. LEXIS 187
CourtCourt of Appeals of Maryland
DecidedJune 29, 1898
StatusPublished
Cited by20 cases

This text of 42 L.R.A. 206 (Southern Building & Loan Ass'n v. Price) is published on Counsel Stack Legal Research, covering Court of Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Southern Building & Loan Ass'n v. Price, 42 L.R.A. 206, 41 A. 53, 88 Md. 155, 1898 Md. LEXIS 187 (Md. 1898).

Opinion

Fowler, J.,

delivered the opinion of the Court.

The plaintiff was a stockholder of the Southern Building and Loan Association of Knoxville, Tennessee. Whether he is a resident of that State or of Maryland does not appear, nor has any question been made as to the effect the fact of his residence in the former State, if it be a fact, might have upon any of the questions here presented. Bagby v. Atlantic, Miss. & Ohio R. R. Co., 86 Pa. St. Rep. 291; High on Receivers, sec. 241.

This action was commenced by attachment on original process issued at the instance of the plaintiff out of the Circuit Court for Allegany County, but the defendant corporation appeared, and the questions we are to decide arose entirely upon the pleadings in the short note case. While there appears to be some confusion as to the condition of the pleading as set forth in the record, it was conceded by counsel that the main and controlling question intended to be presented arises upon the demurrer to the fifth replication to the fifth plea. The plaintiff withdrew his stock on the 21st of December, 1896, and the defence set up by the fifth plea is that neither at the time such notice was given nor at any time before suit was brought was there any fund in the defendant’s hands applicable, under its bylaws, to the payment of the plaintiff’s claim.

The plea avers that the plaintiff was a stockholder of the defendant corporation and subject to its by-laws, one of which was as follows: “ Withdrawn stock will be paid for in the order in which notice is given; but the Association shall not be required to use in the payment thereof in any one month, without the consent of the Board [162]*162of Directors more than one-half of the net receipts of the loan fund for that month.” The plea also alleged'that according to said by-law the plaintiff was only entitled to be paid upon his alleged withdrawal, by the defendant in the order in which said notice of withdrawal had been given, and only then to the extent of one-half of the net receipts unless by consent of the board of directors, and that at the time of said withdrawal notices, other withdrawals had been made by other members to such an extent in prior order as to consume much more than the whole fund applicable as aforesaid to the payment of the plaintiff’s withdrawal stock, and that the plaintiff never obtained the required consent of the directors. To this plea the plaintiff replied by its fifth replication, in substance, that it was true the plaintiff was a stockholder, as alleged, until he had given notice of withdrawal, but that when such notice was given, received and accepted by the defendant, the plaintiff became a creditor of the defendant for the amount owing on said withdrawal stock, under the charter and by-laws of defendant, subject, of course, to the provisions of such charter and by-laws, and that the amount claimed on his withdrawal stock was not to be demandable until after the payment of withdrawing stockholders who had given prior notices, and that the defendant could not be compelled to use in the payment of said claim more than one-half of the net receipts of the loan fund each month; that such provisos, however, were made upon the condition and with the understanding that the defendant would continue its business according to its charter and its contract with the plaintiff so to do, and that on the 16th of April, 1897, being a Tennessee corporation, it was by a decree of the Chancery Court of that State, placed in the hands of receivers, that such receivers took possession of its assets in Tennessee, and that the defendant thereupon ceased to do business in the manner provided by its charter and by its contract with the plaintiff, and ceased to have any receipts whatever applicable to the payment of withdrawn stock. To this replication the defendant demurred.

[163]*163The contention of the plaintiff is that upon the facts set forth in this replication the amount claimed by the plaintiff became legally due and demandable, and was demandable when and before his attachment was issued —that is to say, from and after the passage of the decree in Tennessee placing the defendant in the hands of receivers, when it ceased to have any assets applicable to the payment of the plaintiff’s claim, and became unable to perform its contracts and promises. The question thus presented is a narrow one, but quite important. What is the effect of the decree of the Tennessee Court, the appointment of receivers thereunder and the taking possession by them of the assets of the defendant in that State? This, it is conceded, is practically the sole question in the case.

The fifth replication alleges that the contract which existed between the plaintiff and defendant by operation of the charter and by-laws of the latter was not only made subject to the condition that the defendant should continue to perform its functions and to carry on its business according to its charter but that it had contracted with him so to do. Hence it is contended by the plaintiff that having done all that he was or could be called on to do by the by-laws and the contract made thereunder, namely, having given the requisite notice of the withdrawal, the fixed sum — The amount he had paid in, became due and payable upon the passage of the decree in question. The defendant’s excuse for its failure to perform its contract is that the passage of the decree has made such performance impossible, inasmuch as it cannot make the necessary collections, all its operations having ceased when it was placed in the hands of receivers.

It is familiar law that “if at the time of making the contract the thing promised be possible in itself, it is no excuse for non-performance that its performance became subsequently impossible from causes beyond the control of the promisor.” P. R. R. Co. v. Reichert, 58 Md. 261; Kribs v. Jones, 44 Md. 396; Benson v. Atwood, 13 Md. 20; Walker v. Cockey, 38 Md. 75. In accordance with [164]*164this contention the plaintiff at once brought his suit. On the 16th of April, 1896, the decree was passed and three days thereafter he proceeded against the defendant in this State. As we have already seen his debtor was without power to pay the debt, and it can hardly be said that the plaintiff should be required to wait until some indefinite time in the future when the defendant might, perhaps, be rehabilitated. If, as we have said, there was a debt of an ascertained amount due by the defendant to the plaintiff, the relation of debtor and creditor existed, we do not understand this to be seriously questioned. One of the by-laws provides that shares may be withdrawn at any time, and the holder will be entitled to receive the amount paid in on said shares; but by the terms of another by-law this fixed amount is to be paid not immediately but upon certain notice and when certain collections have been made. In other words, while it is practically conceded that the plaintiff is a creditor, it is contended his debt was not due when he sued, and that .although he had given the required notice, and had fully performed his part of the contract, he was bound to wait for the defendant to do what it is conceded it was unable to do. As we have said, its inability to perform its contract does not relieve the defendant, and in ■our opinion the new situation fully justified the plaintiff in proceeding as he did, at once upon the passage of the ■decree and the appointment of receivers.

But the course pursued by the defendant nullifies, it is said, the Tennessee decree.

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Bluebook (online)
42 L.R.A. 206, 41 A. 53, 88 Md. 155, 1898 Md. LEXIS 187, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southern-building-loan-assn-v-price-md-1898.