Drapeau v. Fullerton Securities Corp.

SHENK, J.

The plaintiff, as Building and Loan Commissioner, brought the action to recover an assessment levied by him as such commissioner from the defendant as a stockholder of the Pan-American Building-Loan Association then in course of liquidation, pursuant to the provisions of the Building and Loan Association Act of 1931. A general demurrer to the complaint was sustained. The only question involved on this appeal from the judgment for the defendant is the propriety of the order on the demurrer.

The assessment was levied on December 5, 1932, and the complaint was filed on April 10, 1933. The defendant acquired its stock in the association on June 24, 1929. On the date last mentioned section 3 of article XII of the Constitution declared the proportionate liability of corporation stockholders. Section 322 of the Civil Code was then to the same effect. In November, 1930, section 3 of article XII was repealed. At the same time section 1 of the same article was amended so as to commit the matter of stockholders’ liability to the legislature. In 1931 section 322 of the Civil Code was repealed, effective August 14, 1931. Also in 1931 the present law regulating building and loan associations was adopted. Section 7.01 of that act imposes on stockholders of such an association the liability which the plaintiff seeks to enforce, namely, $100 per share, and sections 7.02 and 7.03 authorize the Building and Loan Commissioner to enforce that liability by assessment and suit.

It was the contention of the defendant in the trial court and is now that under the authority of

Wood

v.

Hamaguchi,

207 Cal. 79 [277 Pac. 113, 63 A. L. R. 861], its rights as against creditors of the association became fixed under the Constitution and statutes in force on June 24, 1929, when it became a stockholder and that such rights may not be impaired by subsequent legislation. It also claims to be free from liability by reason of section 14.04 of the Building and Loan Association Act of 1931 as follows: “Nothing in this act is intended or shall be construed to impair in any

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manner the rights of those who have heretofore become investors in any association. ’ ’