HOLYOKE BUILDING & LOAN ASS'N v. LEWIS.

27 P. 872

1 Colo.App. 127

HOLYOKE BUILDING & LOAN ASS'N
v.
LEWIS.

Court of Appeals of Colorado

October 12, 1891

Error
to district court, Phillips county; S.S. DOWNER, Judge.

Action
by Jerome Lewis against the Holyoke Building & Loan
Association for moneys had and received. Upon a judgment in
favor of plaintiff, defendant assigns error.
[27 P. 873.]

[1
Colo.App. 128] W.T. Rogers and Bennett & Dempster, for
plaintiff in error.

E.M.
Sheridan, E.E. Brannon, and Kelso & Schooler, for defendant
in error.

RICHMOND,
P.J.

This
was an action on a money demand, and was originally tried
upon an agreed state of facts which, in substance, are that
Jerome Lewis, the defendant in error, paid into the Holyoke
Building & Loan Association, plaintiff in error, the sum of
$75, thereby becoming a member of the association. At the
time of payment there was an article of the by-laws which
read as follows: "All non-borrowing stockholders wishing
to withdraw shall be privileged so to do, upon giving notice
to the directors of his or her intention, and shall be
entitled to receive the amount of installments actually paid
in, without interest." Defendant in error gave the
notice, the association declined to return the money,
insisting that since the payment by Lewis the directors of
the association had repealed the article of the by-laws
referred to, and therefore defendant in error was not
entitled to withdraw the money from the association. Judgment
was rendered in favor of defendant in error for the amount of
his demand. To reverse this judgment this error is
prosecuted.

The
rule of law is that a corporation has not the right to repeal
a by-law so as to impair rights which have been given and
become vested by virtue of the by-laws, although the power to
alter, amend, or repeal its by-laws is granted by charter.
End. Build. Ass'ns, § 278; Insurance Co. v. Connor, 17
Pa.St. 136; Revere v. Copper Co., 15 Pick. 351; Ang. & A.
Corp. § 342. When that by-law was adopted it was as much the
law of [1 Colo.App. 129] the corporation as if its provisions
had been part of the charter. But it is insisted that the
corporation could alter, amend, add to, or repeal by-laws
before made, and that by virtue of this authority Lewis is
precluded or estopped from asserting his right under the
article mentioned. The power to make by-laws is to make such
as are not inconsistent with the constitution and the law,
and the power to alter has the same limit, so that no
alteration or repeal could be made which would infringe a
right already given and secured by contract with the
corporation. No private corporation can repeal a by-law so as
to impair rights which have been given and become vested by
virtue of a by-law afterwards repealed. All by-laws must be
reasonable and consistent with the general principles of the
laws of the land, which are to be determined by the court
when a case is properly before them. But a by-law that will
disturb a vested right is not such. Kent v. Mining Co., 78
N.Y. 159. "By-laws are the corporation's charter,
and are subject to the constitution and general laws of the
state. They fix the right of stockholders, and are in the
nature of a fundamental contract in form between the
corporators, and in practical effect between the association
and its stockholders,--a contract which, as in all other
cases, neither party is at liberty to violate. Any attempt on
the part of the corporation, by by-laws or otherwise, to
deprive a member of a right secured to him by the corporate
articles, is in excess of its authority." Bergman v.
Association, 29 Minn. 275, 13 N.W. 120. The fact that Lewis
was a non-borrowing stockholder is not denied. That he gave
the notice under the article of the by-laws referred to, and
that he had paid in the amount of money which he sought to
recover, is admitted. His right, therefore, of withdrawal,
was a vested right, which the corporation, without his
assent, could not deprive him of. The judgment of the court
below must be affirmed.