Appeal from decree of Court of Common Pleas, Trial Division, of Philadelphia, June T., 1969, No. 5404, in case of Francis E. McGill, for himself and on behalf of others similarly situated, v. Leverington-Roxborough Savings & Loan Association et al.
Patrick T. Ryan, with him Drinker, Biddle & Reath, for appellants.
Louis S. Cali, with him Thomas J. Mullaney, for appellees.
Bell, C. J., Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice Pomeroy. Mr. Justice Jones took no part in the consideration or decision of this case. Mr. Justice Cohen took no part in the decision of this case.
The principal issue presented by this appeal is whether a member of a savings and loan association has a right, enforceable in a court of equity, to compel a membership vote on a proposed merger of his association with another as a pre-condition to the merger.
Appellants are members of Leverington-Roxborough Savings and Loan Association ("Leverington"). In April, 1969 Leverington entered into a Joint Plan of Merger ("the plan") with James W. Baird Savings and Loan Association ("Baird"). The plan was unanimously approved by the board of directors of each association. Articles of merger were thereafter filed with the Pennsylvania Department of Banking ("the Department"), were duly advertised, and were approved by the Department in July, 1969, pursuant to the Savings Association Code of 1967, Act of December 14, 1967, P. L. 746, 15 P.S. 5101*fn1 ("the Code").
The present suit was commenced in June, 1969 by a complaint in equity seeking a permanent injunction of the merger.*fn2 The complaint alleged a refusal of
Leverington directors to notify the members of their association concerning the proposed merger, or to furnish appellant with a membership list so that he could communicate with them. The injunction sought was alleged to be justified on the ground that appellant (and the represented class) would suffer irreparable injury in being subjected to a merger which is not in their best interests. In addition to the prayer that the merger be enjoined, the complaint prayed that the members of Leverington be allowed to vote on the proposed merger, that appellant be furnished with a list of the members of Leverington, and that he be allowed to communicate with them on the subject.*fn3 A hearing was had on the application for a preliminary injunction, following which, on August 4, 1969, the court preliminarily enjoined the merger, and withheld court approval thereof "until it [the merger] is first approved by affirmative vote . . . of a majority of the shares" of Leverington in accordance with rules set out by the court in its decree nisi. Exceptions to this decree were argued to a court en banc, which reversed the decree nisi, dismissed the complaint, and in February, 1970, entered a final decree in favor of appellees. This appeal followed.*fn4 We have concluded that the court en banc was correct, and affirm.
The Savings Association Code of 1967 is a comprehensive statute regulating the business of savings associations.
Article XI, Section 1102, states the requirements for a merger, consolidation or conversion. Paragraph (b) of that section provides as follows: "(b) If the proposed merger, consolidation or conversion will result in an association subject to the provisions of this act, a federal savings and loan association or a savings bank, adoption of the plan by each party thereto shall require the affirmative vote of two-thirds of the entire membership of the board of directors of each association, federal savings and loan association, or the board of trustees of a savings bank. The Department may require such vote of the members as it deems proper." (Emphasis supplied.) In the case at bar, as mentioned above, the adoption of ...