Court Opinion

ID: 6242438
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:48:01.395235+00
Date Added: 2024-06-11T08:58:14.193402
License: Public Domain

Dissenting Opinion by
Mb. Justice Fell :
There are two methods of dividing profits in use by building associations having more than one series of stock. By one method the total annual profits are divided equally among all the shares, by the other the annual profits .are' divided among the shares in proportion to the amount paid on each. The first method is open to the objection that it gives to a share on which one year’s dues have been paid the same profit that is given to a share on which .a much larger amount has been paid. The second method is better, as by it each share is given each year the exact portion of the profits it is entitled to on the basis of the amount paid, and it is the money paid on the stock that earns the profits.
To this point I agree fully with the learned referee but I cannot accept the conclusion which he reached.
It was competent for the association to adopt the first plan or any plan which did equal justice to all of the members. It adopted the first and has worked under it since its organization ■ in 1859. If as a matter of business this plan was not the wisest, still it was a just plan. It operated equally on every share of stock. A share was given too much the first years and too little the last. It received its exact proportion only at the middle of the life of the series but it received in the end the full amount to which it was entitled. The plan worked equally as to all the shares and exact justice was done to each stockholder.
This plan was deliberately adopted by the stockholders at the beginning in 1859, and each year since it has been submitted to *309and approved by them at their annual meeting. It has been the basis upon which all the business of the association has been conducted—its stock matured, its loans settled, the withdrawal value of shares fixed.
Under this plan the defendant’s stock was during the earlier years credited with an undue portion of the profits. Now that the time has cpme when he will receive less and by the process of adjustment get only his exact portion, he for the first time objects and seeks to have applied to him a new plan which will mature his stock eighteen months earlier. ' This is not equitable, it is not honest. ■ It is unfair to every other stockholder.
The legal aspect of the defendant’s contention is no better than’ its moral aspect. If the plan was just it was binding and that is the end of it. A court may well say that the plan adopted must be a just one, but having done that it has reached the limit of the-proper exercise of its power. It should not and I submit that with propriety it cannot say that one plan for the management of corporate business is better than all others and that that one shall be adopted. The division of profits and the maturing, of the stock of a-building association are subjects for corporate action. If. the plan adopted is not unjust, with its wisdom a court has nothing to do. If it is unjust the remedy is by bill under which the rights of all the stockholders may be considered and adjusted on a plan equitable to all. If the plaintiff, without proof of fraud or unfair dealing, is permitted to take the management of the affairs of the association out of the hands of its stockholders and have them submitted to a jury for supervision and change, any other borrower may do the same, and instead of one uniform plan selected by those who are to be affected by it there may be as many as the wisdom or whim of a jury may devise.
There is no conflict between these views and the opinion of this court when this case was before it in 1891. The decision reported in 139 Pa. 480 goes no further than to say that it was competent for the defendant to prove that his stock had matured. He may certainly do that, but the rule by which it is tc be determined is the rule of the association—not a new rule.
For the reasons stated I do not concur in the judgment rendered in this case.
Mu. Justice Mitchell concurred in the dissent.