Carew v. Hibernia Bank

TOBRINER, J. Appellant seeks a declaration that as a depositor of The Hibernia Savings and Loan Society, a membership corporation, she possessed the same rights in its reserve fund as the members of the society and that therefore she was entitled to share equally with the members upon the corporation’s conversion to a stock structure and “distribution of capital stock into which said reserve fund was converted. ’ ’

The summary judgment declares that a nonmember depositor of the society held no “interest in its property, assets or reserve fund or ... to any of its capital stock or any proceeds thereof.”1

Appellant presents no question of any factual issue for determination by the trial court; indeed she asserts that the by-laws and conditions of deposit attached to Cyril Tobin’s affidavit, in support of respondents’ motion for summary judgment, are determinative of her rights. Appellant makes no claim that all depositors, including appellant, did not receive the semiannual dividends or interest on their deposit balances at the same rate as every other depositor. The first amended complaint likewise alleges, on information and belief, that the society “paid to depositors only interest upon the amount of their deposits, and that no distribution of any dividend or share of profits was made to any depositor, but that profits were accumulated in said reserve fund. ...”

The accepted facts disclose that The Hibernia Savings and Loan Society was incorporated in 1864 under the provisions of “An Act to provide for the Formation of Corporations for the Accumulation and Investment of Funds and Savings.” (Stats. 1862, p. 199; Stats. 1864, p. 531.) In accordance with the purpose for which the corporation was formed, “that of aggregating the funds and savings of the members of said Corporation and of others, and of . . . investing the same for their common benefit,” Hibernia’s by-laws of 1864 provided for receipt of deposits by both members and nonmembers ; article 22, in part, read: “Until otherwise provided . . . depositors shall be entitled to the same share of profits as members.” (Emphasis added.)

This by-law was repealed on February 10, 1868; a series [766]of amendments followed, and on July 13, 1875, articles 15 and 21 were adopted. Article 15 recites: “In January and July in each year, the Board of Directors shall examine the business of the Corporation during the preceding six months, and, out of its earnings during that period, shall declare such dividends as they may deem safe and proper; and so much of said earnings as may be necessary to pay such dividends is hereby appropriated and directed to be applied to the payment thereof. Dividends will be credited to the respective accounts as of the 21st day of January or the 21st day of July next before they are declared. The Reserve Fund must get a dividend equal to that given to depositors who are not members, (and also all entrance fees) in addition to the percentage of the net earnings required to be given it by law; but the Board of Directors may, if they deem it proper, pay the whole or any part of the expenses of the Corporation (including taxes) out of the Reserve Fund, or out of the income of the Reserve Fund. Until otherwise provided by the Board of Directors, depositors who are not members shall get a dividend equal to that given to members. Dividends must not be calculated for any fraction of dollars or of months. The month must be counted from the 21st day of one month to the 21st day of the next month. On balances drawn between one dividend day and another, interest will be allowed only at the rate of four per cent, per annum from the next preceding dividend day.” (Emphasis added.)