Crew v. Thompson

146 S.E.2d 471 (1966) 266 N.C. 476

W. Lunsford CREW and Joseph N. Hatem, Individually and on behalf of themselves and other members of First Federal Savings & Loan Association of Roanoke Rapids, Plaintiffs,
v.
Carl S. THOMPSON and First Federal Savings and Loan Association of Roanoke Rapids, Defendants.

No. 201.

Supreme Court of North Carolina.

February 4, 1966.

Banzet & Banzet, Warrenton, for plaintiff appellants.

Allsbrook, Benton & Knott and Dwight L. Cranford, Roanoke Rapids, for Carl S. Thompson, defendant appellee.

Battle, Winslow, Merrell, Scott & Wiley, Rocky Mount, for First Federal Savings and Loan Association of Roanoke Rapids, defendant appellee.

BOBBITT, Justice.

When plaintiffs instituted this action on January 19, 1965, one day before the time originally fixed for the annual meeting of the members of the Association, they apprehended they might be deprived of their offices as directors by adverse votes cast under the purported authority of illegal and void proxies. This appears clearly from the portion of the complaint filed February 23, 1965. It appears with equal clarity from the supplemental portion of the complaint filed March 24, 1965, that plaintiffs W. Lunsford Crew and Joseph N. Hatem (and also Graham Shell) were duly elected directors of the Association at the annual meeting of its members held February 23, 1965; and there is no allegation or contention that defendants controvert or challenge plaintiffs' election or present status as directors of the Association.

Thus, it appears affirmatively from plaintiffs' pleading that illegal votes, if any, cast under purported authority of illegal and void proxies, if any, did not affect materially plaintiffs' election as directors.

The agreed statement of case on appeal includes the following: "The Referee filed his report on April 30, 1965, but did not pass upon the right of members to vote; he concluded as a matter of law that he did not have jurisdiction over the determination of whether any member had a right to vote." The referee was well advised. When appointed as referee in the order of February 9, 1965, no complaint had been filed. GS Chapter 1, Article 20, relates to trials by referees on evidence offered by litigants. It is not contemplated that a referee be appointed to attend a meeting such as the annual meeting of the members of the Association and there make determinations relating to the respective rights of contesting parties during the progress of such meeting. "No order of reference, either by consent or otherwise, should be permitted by the court until the pleadings are in and the parties are at issue." Penn. Lumber Co. v. McPherson, 133 N.C. 287, 291, 45 S.E. 577, 578; Kerr v. Hicks, 131 N.C. 90, 92, 42 S.E. 532; Perry v. Doub, 249 N.C. 322, 326, 106 S.E.2d 582; McIntosh, North Carolina Practice and Procedure, § 526. The provision in the order of February 9, 1965, appointing the referee was improvidently entered; and plaintiffs' contention that the referee should be required to file a further report as to what occurred at said meeting of February 23, 1965, is without merit.

Allegations in the portion of the complaint filed on February 23, 1965, are to the effect the secretary of the Association, acting under the domination of defendant Thompson, refused to allow plaintiffs and other members of the Association to inspect and make copies of the records of the Association showing the number of votes to which the members were entitled and minutes of the previous meetings of the board of directors, until required to do so by the court's order of February 9, 1965. The only reasonable inference to be drawn from plaintiffs' pleading is that the Association furnished to plaintiffs all data required by the court's order of February 9, 1965.

Obviously, allegations in the supplemental portion of the complaint filed March 24, 1965, supersede, to the extent in conflict therewith, allegations in the portion of the complaint filed February 23, 1965. The annual meeting of February 23, 1965, was held between the filing of the first portion and the filing of the second portion of plaintiffs' pleading.

In passing upon the demurrers, consideration must be given to both portions of plaintiffs' pleading. It is our opinion, and we so hold, that the facts alleged in the supplemental portion filed March 24, 1965, disclose affirmatively that plaintiffs have no cause of action against defendants on account of matters alleged in the portion of the complaint filed February 23, 1965.

If plaintiffs are or become aggrieved on account of events occurring subsequent to said meeting of February 23, 1965, such grievance may be the subject of another action or proceeding. The present action relates to plaintiffs' alleged grievances as of the commencement of this action. Plaintiffs' pleading discloses their original grievances are now moot on account of the action of the members of the Association at the annual meeting on February 23, 1965.

Assuming, without deciding, the North Carolina courts had jurisdiction of plaintiffs' action, the conclusion reached is that both demurrers were properly sustained on the ground the (composite) complaint does not state facts sufficient to constitute a cause of action, and that the action was properly dismissed.

In view of the conclusion reached, we express no opinion as to defendants' contention that the act of Congress under which the Association was organized places exclusive jurisdiction of matters such as are involved in this action in the Federal Home Loan Bank Board. As to this, there is a division of authority. Decisions indicating the Federal Home Loan Bank Board has exclusive original jurisdiction include: People, etc. v. Coast Federal Sav. & Loan Ass'n, D.C., 98 F. Supp. 311; Woodard v. Broadway Federal Savings & Loan Ass'n, 111 Cal. App. 2d 218, 244 P.2d 467; Reich v. Webb, 218 Cal. App. 2d 862, 32 Cal. Rptr. 803; Home Loan Bank Board v. Mallonee, 196 F.2d 336, cert. den. 345 U.S. 952, 73 S. Ct. 863, 97 L. Ed. 1374, rehearing den. 345 U.S. 978, 73 S. Ct. 1120, 97 L. Ed. 1393. Decisions indicating courts (state or federal) have jurisdiction in certain respects include: In re Election of Directors, etc., 268 A.D. 414, 1024, 51 N.Y.S.2d 816; Elwert v. Pacific First Federal Savings & Loan Ass'n, D.C., 138 F. Supp. 395; Pearson v. First Federal Savings and Loan Ass'n, Fla.App., 149 So. 2d 891; Daurelle v. Traders Federal Savings & Loan Ass'n, 143 W.Va. 674, 104 S.E.2d 320.

Suffice to say, a complete development of the facts concerning the Association's charter, bylaws, federal regulations, if any, etc., would seem a prerequisite to a satisfactory consideration of the jurisdictional question.

Affirmed.