183 A.2d 357
[No. 355, September Term, 1961.]Court of Appeals of Maryland.
Decided July 9, 1962.
CORPORATIONS — Statute Relating To Forfeiture Of Charter And Dissolution Of, Held Not Repealed. The provisions of Code (1957), Art. 23, § 84, pursuant to which the charter of the appellant savings and loan association in the case at bar was forfeited and the association ordered dissolved, were not repealed by either Acts of 1961 (Sp. Sess.), ch. 1, or Acts of 1961, ch. 205, which specifically provide that existing laws affecting savings and loan associations, which are not contradictory or inconsistent, shall “remain in full force and effect as if these Sections had never been enacted”. pp. 315-316
RECEIVERS — Appointment Of, For Savings And Loan Association, Pursuant To Acts Of 1961 (Sp. Sess.), Ch. 1, Sec. 160L — Chancellor’s Determination, After Full Hearing, That There Was An Emergency Held Accurate And Equivalent To Holding That Director’s Finding To That Effect Had Been Sound. p. 316
RECEIVERS — Appointment Of, For Savings And Loan Association, Pursuant To Acts Of 1961 (Sp. Sess.), Ch. 1, Sec. 160L,
Page 314
May Be Sought If Emergency Is Found, Without First Using Other Statutory Remedies. The Director of the State Department of Assessments and Taxation is not required to use the other statutory procedures and remedies provided by Acts of 1961 (Sp. Sess.), ch. 1, before seeking the appointment of a receiver for a savings and loan association under sec. 160L of the Act, the powers given him being in the alternative. If the situation is so severe as to amount to an emergency requiring receivership, the Director may seek to administer that remedy without first using the other statutory remedies. p. 316
SAVINGS AND LOAN ASSOCIATIONS — Findings Below Of Impairment And Illegal And Unsound Operation So Extensive As To Warrant Receivership, Forfeiture Of Charter And Dissolution Held Fully Supported By Testimony. p. 317
J.E.B.
Decided July 9, 1962.
Appeal from the Circuit Court for Prince George’s County (POWERS, J.).
Petition by the Director of the State Department of Assessments and Taxation for the appointment of a receiver, the forfeiture of the charter and the dissolution of Freestate Savings and Loan Association, Inc. From an order granting the relief prayed, the Association appeals.
Affirmed, with costs.
The cause was argued before BRUNE, C.J., and HENDERSON, HAMMOND, PRESCOTT, HORNEY and MARBURY, JJ., and NILES, J., Chief Judge of the Supreme Bench of Baltimore City, specially assigned.
Leon H.A. Pierson and William E. Brooke, with whom wer Shriver Brooke on the brief, for the appellant.
James P. Garland, Assistant Attorney General, with whom wa Thomas B. Finan, Attorney General, on the brief, for the appellee.
Page 315
Brief of amici curiae filed by Richard W. Case, Joseph M. Roulhac and Smith, Somerville Case for Maryland Savings and Loan League, Inc., and Maryland League of Building, Savings and Loan Associations, Inc.
HAMMOND, J., delivered the opinion of the Court.
The appeal is from an order appointing a receiver for Freestate Savings and Loan Association, Inc., under the provisions of Sec. 160L of Ch. 1 of the Laws of the Special Session of 1961, and directing that the charter of the Association be forfeited and the association dissolved pursuant to the provisions of Code (1957), Art. 23, § 84. The order was passed after a full hearing on the merits, on findings by the chancellor of an emergency which justified the invoking of Sec. 160L of Ch. 1 and of impairment or insolvency and unsafe and unsound operation of the Association.
The appellant challenges the order appealed from on the grounds (a) that Ch. 1 of the Laws of the Special Session is unconstitutional; (b) that Ch. 1 was not in effect when the order below was passed; (c) that Sec. 84 of Art. 23 had been repealed and the court could not forfeit the charter of Freestate and order its dissolution pursuant to that section; and (d) that the petitioners below did not comply with the applicable statutes, assuming that they were in effect.
The opinion in First Continental Savings Loan Association v. Director, 229 Md. 293, which was argued immediately before this case, answered the first two contentions of appellant by holding Ch. 1 constitutional and in effect, and that decision controls here.
There is no substance to the argument that Sec. 84 of Art. 23 was repealed. Section 160KK of Ch. 1 (and Sec. 161KK of Ch. 205 of the Laws of 1961) recites that its provisions “shall be considered as additions to all existing laws covering or affecting building, savings and loan or homestead associations * * * and shall replace and prevail over such existing laws to the extent that the provisions of these Sections are contradictory or inconsistent, but only to the extent of such contradiction or inconsistency, and such existing laws, subject to the
Page 316
above provisions, shall be and remain in full force and effect as if these Sections had never been enacted.” (Emphasis supplied.)
It is clear that there was no repeal of Sec. 84 of Art. 23 of the Code by either Ch. 1 or Ch. 205.
The contention that the petitioners below did not comply with the statutes had two thrusts. First, it is said there was no showing of any emergency. We pointed out in the First Continental case, cited above, that the statute, Sec. 160L, does not contemplate a finding by the court of any emergency as a prerequisite to appointment of a receiver and that it is enough that the Director determine there exist conditions which, in the public interest, require immediate appointment of a receiver. In this case the chancellor, after a full hearing, determined, accurately we think, that there was an emergency, and this was the equivalent of a holding that the Director’s finding to that effect had been sound.
Second, it is argued that the Director must follow all the administrative procedures and remedies provided by Ch. 1 in an effort to correct any impairment and any abuses or deficiencies in operations before he may seek the appointment of a receiver.
There is no merit to the contention. Section 160H allows the Director to require the discontinuance by an association of any illegal practices. Section 160P (g)(2) provides for the levying of an assessment on the guaranty stock of an association if the Director determines the capital of an association is impaired. Appellant argues that the Director must have used these statutory remedies before proceeding under Sec. 160L for the appointment of a receiver. We do not so read the Act. The powers given the Director are in the alternative and, it would seem, permit him to administer as much and as strong medicine as he determines the extent and severity of the corporate illness requires. If it is so severe as to amount to an emergency which requires the strongest medicine of receivership, he may seek to administer that without first using other statutory remedies. Statutes of California similar to Ch. 1 were so interpreted in North American Building-Loan Ass’n v. Richardson, 56 P.2d 1221 (Cal.).
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The findings of the chancellor that there was impairment and illegal and unsound operation so extensive as to warrant receivership, forfeiture of the charter and dissolution for Freestate, were fully supported by the testimony.
Order affirmed, with costs.