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Ash v. Citizens Building and Loan Association of Montgomery County Inc.

Decided: May 19, 1961.

ASH ET AL.
v.
CITIZENS BUILDING AND LOAN ASSOCIATION OF MONTGOMERY COUNTY, INC.



Appeal from the Circuit Court for Montgomery County (PUGH, J.).

The cause was argued before Brune, C. J., and Henderson, Hammond, Marbury and Sybert, JJ.

Hammond

HAMMOND, J., delivered the opinion of the Court.

This case presents questions as to the rights of free shareholders in a building association which, over their objections, transferred all of its assets to another building association.

Appellants filed a petition under Code (1957), Art.23, Sec.73, in the Circuit Court for Montgomery County, alleging that they were stockholders in The Montgomery Mutual Building and Loan Association (Montgomery) and complaining that Montgomery had transferred all of its assets to The Citizens Building and Loan Association of Montgomery County, Inc. (Citizens). They alleged they did not vote in favor of the transfer, and either before, or at the meeting of Montgomery's stockholders on October 30, 1959, filed their respective objections in writing to the transfer and "did within twenty days after the acceptance of the Articles of Transfer by the Maryland State Tax Commission, make demand" upon Citizens for payment of the fair value of their stock.

Appellants' bill alleges further that Citizens has claimed that the fair value of appellants' stock is only the face amount of stock held in Montgomery "as represented by the balance on deposit on October 30, 1959" and that Montgomery at the time of the transfer had a net worth "considerably in excess of the total face amount of its capital stock then outstanding, and in addition had going concern value and valuable good will, and all of these things should be taken into account in fixing the fair value which your petitioners are entitled to receive for their shares in the said transferor association."

The relief prayed was that as objecting stockholders, appellants be awarded the fair value of their stock determined as of October 30, 1959, in accordance with Code (1957), Art. 23, Sec.73, or, if it be decided that Sec.73 is not applicable to building associations, the transfer be declared void.

Citizens answered that appellants were entitled only to the

amount of their deposits, which it had offered and was ready to pay them, and that the petition for appraisal had been filed more than fifty days after the articles of sale and transfer by Montgomery to Citizens had been accepted for record by the State Tax Commission and was too late, since Code (1957), Art. 23, Sec. 73 (d), mandatorily requires that such a petition for determination of the fair value of the shares of an objecting stockholder must be filed within fifty days of the acceptance of such articles for record.

Appellants thereupon petitioned the court to have determined, prior to trial pursuant to Maryland Rule 502, the following questions of law:

1. Were petitioners stockholders of Montgomery, entitled to have the fair value of their stock determined under Code (1957), Art. 23, Sec. 73?

2. Was the filing of petitioners' request for determination of the fair value of their stock more than fifty days after the acceptance of the articles of ...


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