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HAVERTOWN SAVINGS AND LOAN ASSOCIATION v. COMMONWEALTH (09/09/71)

decided: September 9, 1971.

HAVERTOWN SAVINGS AND LOAN ASSOCIATION
v.
COMMONWEALTH



Original jurisdiction.

COUNSEL

Leonard Levin, with him Edward A. Savastio, Savastio, Levin & Sereni, for petitioner.

Frederic G. Antoun, Deputy Attorney General, with him C. Lawrence Rutstein, Assistant Attorney General, and J. Shane Creamer, Attorney General, for respondent.

President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Manderino, Mencer and Rogers. Opinion by Judge Crumlish, Jr.

Author: Crumlish

[3 Pa. Commw. 266 Page 267]

This is before us on preliminary objections to a petition for declaratory judgment filed by Havertown Savings and Loan Association against the Department of Banking. The Department properly and correctly contends that the Association is not the real party in interest and has no standing to bring its petition.

In its petition, the Association alleges the following pertinent facts: (1) Joseph G. Hykel, Vice President of the Association, is under indictment in the United States District Court for the Eastern District of Pennsylvania on a charge of falsification of the Association's records; (2) the Department has suspended Joseph G. Hykel as an officer of the Association; (3) the Association under its interpretation of Section 513 of

[3 Pa. Commw. 266 Page 268]

    the Savings and Loan Code, 15 P.S. § 5513, has indemnified Joseph G. Hykel as to his salary and legal expenses, subject to the normal refund safeguards provided by that section; and (4) the Department sent the Association a letter advising it to make no further payment to Joseph G. Hykel insomuch as he is not authorized to receive them under the Department's interpretation of Section 513.

The Association urges in its petition that we interpret the legality of its actions under Section 513. The preliminary objections now before us challenge the jurisdiction of this or any court to entertain an argument relating to this subject matter when brought by the Association.

Section 513 of the Savings and Loan Code, Act of December 14, 1967, P.L. 746, Art. V, Section 513, 15 P.S. § 5513 provides in part: "Any person shall be indemnified or reimbursed by the Association for reasonable expenses, . . . actually incurred by him in connection with any action, suit or proceeding, instituted or threatened, judicial or administrative, civil or criminal, to which he is made a party by reason of his being or having been a director, officer, attorney or employee of an association: Provided, however, that no person shall be so indemnified or reimbursed, . . . in relation to such action, suit or proceeding in which and to the extent that he finally shall be adjudicated to have been guilty of a breach of good faith, . . .".

It is clear that the Association and the Department differ on their interpretation of the applicability of Section 513 to the alleged facts. This alone, however, does not create a sufficient controversy so as to enable plaintiff to invoke the Uniform Declaratory Judgments Act, 12 P.S. § 831 et seq. The practical effect of permitting such an ...


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