Dallemand v. Odd Fellows' Savings Bank

Sharpstein, J. The controlling facts of this case are stated with sufficient fullness we think in the following extract of an opinion filed by the court below on overruling a demurrer to the plaintiff’s complaint:—

“In this action, it appears that the corporation de[600]fendant was originally a membership savings bank, incorporated October 13, 1866, as distinguished from one based upon the guaranty of a capital stock.

“In the year 1878, and prior thereto,there was a great stress upon the administration by reason of repeáted runs occasioned by panics among the depositors.

“To obviate the perils then threatening the bank’s financial existence, at a meeting of the depositors, held on the twenty-fourth day of June, 1878, it was determined to make the bank one of capital stock, reorganizing under section 300 of the Civil Code, it being hoped that such action would enhance the financial repute of the corporation. On the first day of August, 1878, the corporation also resolved to reincorporate. In acr cordance with the project, it was determined by such of the depositors as were sanguine in that regard to subscribe themselves, and to open a subscription for capital stock to the amount of two hundred and fifty thousand" dollars, to be divided into two thousand five hundred shares of one hundred dollars each; to give the depositors the preference as subscribers; no one person to take more than five thousand dollars, and to accept as payment the funds of such as had moneys in the bank.

“ The subscription was effected to the extent of about $133,500, of which amount $128,975 was actually deposited in bank, including as well funds subscribed by depositors as also moneys actually paid into the bank by others not depositors for stock, and the parties so subscribing thereupon, without waiting until the complement of stock had been subscribed, executed the articles of incorporation, reciting that stock had been subscribed, and thereafter organized, elected directors and officers, and passed by-laws, and relieved the old board and depositors of the management of the bank, which was concurred in legally, so far as appears, by all parties interested. •

“The bank, however, did little business; some deposits [601]