Court Opinion

ID: 9703294
Source: CourtListenerOpinion
Date Created: 2023-08-25 23:50:55.869965+00
Date Added: 2024-06-11T18:21:47.364287
License: Public Domain

SHIRLEY S. ABRAHAMSON, J.
(dissenting). After holding that the Supreme Account II is a valid savings account within the meaning of sec. 215.13(1), Stats., and that the Supreme Account II does not constitute the illegal conduct of banking business under chapter 224, the majority surprisingly concludes that the Supreme Account II violates sec. 215.17. I dissent because -the majority’s interpretation of sec. 215.17 is unduly restrictive. In holding that the phrase “pay to the owners” in sec. 215.17 prohibits savings and loans from paying withdrawals to third parties, the majority has ignored the purposes of chapter 215 and past decisions of this court regarding the interpretation of chapter 215. I conclude, as did the court of appeals, that the obligation of a savings and loan to “pay to the owners” or “pay the saver” is satisfied when the savings and loan honors the depositor’s draft made payable to a third person.
Historically, it has been the commercial practice of savings and loan associations to satisfy their payment obligations to a depositor by paying to the depositor or to someone else at the depositor’s direction. A depositor traditionally has had a variety of means for obtaining *456withdrawals. Besides receiving cash or a check payable to the depositor, the depositor has been able to receive an accommodation check payable to a third party or a money order payable to a third party.
If the legislature had intended to prohibit savings and loans from payment of sight drafts, it could have used much more explicit language to express this prohibition. The legislature would not have left the prohibition to be inferred from the phrase “pay to the owner,” when it knew how to frame a statute explicitly prohibiting sight drafts, as evidence by the following two statutes:
“ [Trust company banks] . . . shall not receive deposits subject to draft, order or check payable on demand . . . .” Sec. 223.03(11), Stats.
“[Mutual savings banks] shall not pay any dividend or deposit, or portion of a deposit, or any check drawn upon it by the depositor, unless the passbook of the depositor be produced and a proper entry be made therein at the time of the payment.” Sec. 222.12(4), Stats.
The majority recognizes that it is plausible to interpret the statutory language as satisfied when a savings and loan pays to a third person at the request of the depositor, but it nevertheless rejects this interpretation. Its reasons, however, are entirely unpersuasive.
The majority (p. 10), relying on the opinion written by Justice Connor T. Hansen in Security Savings & Loan Asso. v. Wauwatosa Colony Inc., 71 Wis.2d 174, 179, 237 N.W.2d 729 (1975), states that chapter 215 is regulatory and its provisions “are to be given expansive application” (p. 10), and are “entitled to a liberal construction.” (p. 12). I find the majority’s repeated emphasis on the Security Savings language misleading for several reasons. First, Justice Hansen’s opinion in Security Savings & Loan, relating to construction of ch. 215, was the opinion of only three justices; four justices did not join this opinion. The precedential value of a “majority” *457opinion joined by only three justices is dubious. Second, the significance of the language from the Security Savings & Loan opinion quoted by the majority on page 10 is unclear. The court of appeals, the majority opinion and the parties take different views of the application of this language to the instant case. The majority opinion never tells the reader how to give an expansive application to or a liberal construction to chapter 215, and specifically sec. 215.17, and how the meaning of sec. 215.17 which results from an “expansive application” or “liberal construction” compares to the meaning of sec. 215.17 which results from a “strict,” “narrow,” or “non-expansive application.” And after carefully explaining that chapter 215 must be given an expansive application and a liberal construction, the majority narrowly limits and narrowly construes the words “pay to.” Third, it is clear, when you read Justice Hansen’s opinion in Security Savings & Loan that Justice Hansen concludes, after discussing statutes in derogation of the common law, regulatory statutes, and broad and strict construction of statutes, that the “normal rules of statutory construction are applicable” to chapter 215. 71 Wis.2d at 179. Justice Hansen clearly states that the aim of statutory construction of chapter 215 is the same as the aim of all statutory construction, namely to discern the intent of the legislature as “ ‘disclosed by the language of the statute in relation to its scope, history, context, subject matter and the object intended to be remedied or accomplished.’ ” 71 Wis.2d at 180. We quote the full passage of Justice Hansen’s opinion setting forth the applicable rule of statutory construction to chapter 215:
“This type of association existed at common law and possessed common-laws rights. De Fazio v. Haven Savings and Loan Association (1956), 22 N.J. 511, 126 Atl. 2d 639. Therefore, it must be resolved whether the stat*458ute is subject to the strict construction applicable to statutes in derogation of common-law rights.
“Generally, statutes restraining the freedom of contract have been considered subject to these rules. 82 C.J.S., Statutes, p. 942, sec. 393. However, comprehensive legislation dealing with these associations, having common-law rights, is regulatory, placing limits on those rights, rather than enabling, or conferring power or authority on the association. Julien v. Model B., L. & I. Asso. (1902), 116 Wis. 79, 89, 90, 92 N.W. 561. In this context, the rule of strict construction has its limits:
“ ‘. . . An exception to the rule of strict construction is customarily made in the case of a statute which purports to provide a complete system of law covering all aspects of the subject with which it deals, so as to supersede all prior law on the subject, whether common or statutory law ....
“ ‘. . . Modern regulatory legislation, moreover, is gen-ally regarded as a newly conceived system of legal arrangements to deal with newly emergent problems in society, entitled to liberal construction because of its remedial character and not subject to the rule of strict construction of statutes in derogation of the common law because its genesis and conception are wholly outside and apart from any common law frame of reference . . .’ Sutherland, Statutory Construction (4th ed., 1974), Statutes in Derogation of the Common Law: Limitations on the Rule, pp. 51, 52, sec. 61.03.
“The law of this state is in accord with this proposition. Heiden v. Milwaukee (1937), 226 Wis. 92, 100, 101, 275 N.W. 922; and Schumacher v. Milwaukee (1932), 209 Wis. 43, 46, 243 N.W. 756. Therefore, normal rules of statutory construction are applicable to the instant provision.”
“We are of the opinion this statutory provision is ambiguous in that it is ‘capable of being understood by reasonably well-informed persons in either of two or more senses.’
“In Ortman v. Jensen & Johnson, Inc. (1975), 66 Wis. 2d 508, 520, 225 N.W.2d 635, it was stated:
*459“This court has held that where a statute is ambiguous, this court must ascertain the legislative intention as disclosed by the language of the statute in relation to its scope, history, context, subject matter and the object intended to be remedied or accomplished. Wisconsin Southern Gas Co. v. Public Service Comm. (1973), 57 Wis.2d 643, 205 N.W.2d 403. The object to be accomplished by a statute must be given great weight in determining legislative intent. Town of Menominee v. Skubitz (1972), 53 Wis.2d 430, 192 N.W.2d 887. . . .”
“The considerations mandated by Ortman, supra, necessitate review of the various policy arguments. . . .”
Security Savings & Loan, supra, 71 Wis.2d at 178, 179, 180.
In interpreting sec. 215.17, this court must apply the ordinary rules of statutory interpretation to ascertain legislative intent.
Although the majority concludes that the phrase “pay to” is ambiguous, it concludes that commercial practice and the common law are irrelevant in ascertaining the meaning of the phrase or the legislative intent. Thus the majority refuses to accept what it concludes to be the common law and commercial practice that an obligation to “pay to the owner” can be satisfied by payment to a third person.
I find the majority’s unwillingness to look at commercial practice contrary to the general rules of statutory construction and contrary to good common sense. When the legislature drafted chapter 215, codifying major guidelines for Wisconsin’s savings and loan industry, it was not legislating on an empty slate or with an empty head. Chapter 215 was developed with full knowledge by the legislature of established commercial practices, the history of the savings and loan industry and existing judicial precedent.
Although the majority states that the common, ordinary meaning of the word “pay” should apply, not the *460commercial meaning- of the word “pay,” the opinion nowhere states the word’s ordinary meaning. The dictionary defines “pay” to mean “discharge an obligation to,” or “to make any agreed disposal or transfer of money.” Webster’s Third New International Dictionary p. 1659 (1961). This court has accepted the following as the common ordinary meaning of the word “pay”:
“ ‘Pay’ is a word of quite comprehensive meaning, but we agree ... it was evidently intended to have its ordinary meaning which is to discharge the indebtedness by the use of money.” Krahn v. Goodrich, 164 Wis. 600, 610, 160 N.W. 1072, 1075 (1917).
The word “pay,” in its common, ordinary meaning, does not restrict transfer to the saver or depositor. Thus, both the commercial meaning of “pay” and the common meaning of “pay” allow a savings and loan to discharge its payment obligation to the owner by transfer to a third person. Under both its commercial and ordinary meanings, “pay to the owner” addresses the legal obligation of the institution to return deposited funds to the depositor but does not touch upon the manner of discharging this obligation. Therefore, to read sec. 215.17 to prohibit payment to third persons is to rewrite the statute contrary to both well-established commercial practice and ordinary usage of the terms.
A more fundamental objection to the majority’s opinion, however, is that in its preoccupation with the rule that regulatory statutes are to be liberally construed and be given expansive application, the majority has missed the goal of determining the legislative intent of chapter 215.
Chapter 215 was designed to provide a broad framework of powers for savings and loan associations. Chapter 215 was not intended to be a detailed procedural manual for all the day-to-day operations of savings and loan associations. While some matters are regulated in de*461tail, others are couched in general terms, leaving room for savings and loans to adopt methods of operation to carry them out. The obligation of a savings and loan association to “pay to the owner” is a provision of the latter type. Sec. 215.17 places a payment obligation on the savings and loan association without prescribing the manner in which the obligation is to be discharged.
And if the generality of provisions such as the one at issue in the instant case is inadequate to make it clear that savings and loan associations were given wide latitude to adopt procedures, that point is made clear by the “omnibus powers” provision in sec. 215.13(37), Stats. That section permits savings and loan associations to exercise “all powers necessary and proper to carry out the purposes of the association.”
In April of 1976 Mutual Savings and Loan Association advised the Wisconsin Commissioner of Savings and Loans that it was implementing the Supreme Account II. The Commissioner replied to Mutual’s inquiry regarding legal support as follows:
“A withdrawal order directing payment to a third party is not new; account holders have long been able to direct that withdrawals be paid to designated third parties. Although the statutes governing savings accounts go into great detail spelling out when and in what sequence withdrawal orders may be honored, neither the statutes nor existing administrative rules restrict the form that a withdrawal order may take. In the absence of any prohibition against the form of withdrawal you have proposed, I am not in a position to object to withdrawals being made by negotiable orders; it is my opinion that withdrawals of this kind are permitted under current Wisconsin law.”
While the court of appeals in this case quoted the Commissioner’s letter approvingly, it felt it could accord no deference to the Commissioner’s construction because the statute was unambiguous. The majority of this court *462has now held that the statutory language is ambiguous. The majority gives no reasons, however, for not according deference to the interpretation of the statute by the Commissioner of Savings and Loans, the official with expertise in administering chapter 215.
The statutory purposes of savings and loans are twofold: to promote thrift and to provide management for the funds of the members and at the same time to provide funds for borrowers, especially mortgage money for home ownership. Security Savings & Loan, 71 Wis.2d at 183. Since innovative services like the payment of sight drafts attract savings dollars, which are then used to provide home loans, the payment of sight drafts does carry out the purposes of savings and loan institutions.
The majority believes sec. 215.17 was intended to restrict the method of payment, but nowhere in its opinion does it deal with the purpose intended to be accomplished by such a restriction. Nor does the majority deal explicitly with the scope or context or history or subject matter of chapter 215. The majority has short-circuited the analysis required in this case by the simple analysis that the word “pay” as used in sec. 215.17 is ambiguous, that chapter 215 is a regulatory scheme, and that therefore the legislative intent behind sec. 215.17 must be to restrict method of payment. The position taken by the majority is contrary to precedent and the rules of statutory construction. Absent a specific statutory prohibition, sec. 215.17 should be interpreted to allow savings and loan associations to honor requests for payments to third parties. Such an interpretation is consistent with commercial practice, with common law, with the objectives of chapter 215 and with sec. 215.13(37), Stats., which authorizes associations to exercise all powers necessary and proper to carry out the purposes of the association. I dissent.
I am authorized to state that Justice Roland B. Day joins in this dissent.