The opinion
On Rehearing.
KNIGHT, Justice.
We have given most careful consideration to appellee’s motion for a rehearing in this cause, and to the very elaborate brief filed by its counsel in support of the same. This further consideration but convinces us that the conclusions heretofore reached in the case are sound, and supported by the great weight of authority.
Counsel for appellee, among other things, strenuously insist that we are in error in the opinion filed, in which we said with reference to the status of the “guarantee stock”: “While it appears that the association issued and had outstanding six classes of stock, the conclusion is inescapable that its
backbone
and
vitals
are represented by the stockholders owning the $50,000.00 of ‘guarantee stock,’ and they are the real ultimate beneficiaries of the association.”
We are still of that opinion, for (a) it appears from the certificate of incorporation that the association, among its charter powers, had the power “to issue stock of such kind, and character, and classes in such proportions as between the different classes of stock with such designation, preferences, restrictions, and qualifications as to assets, dividends, participation, qualmeations, and voting powers as may be prescribed by the by-laws of the association”; (b) by the second section of article 1 of the by-laws, it is provided:
“At least two-thirds of the directors shall he the holders of the guarantee stock of the association
as long as there shall exist a sufficient number of holders of such guarantee stock and said holders shall qual- . ify as directors”; (c) by section 1 of article XL (amendment), it is provided: “These by-laws may be changed or amended at any annual meeting of the stockholders called for that purpose,
or by the hoard of directors
at any regular monthly meeting, provided that
any amendment
by the stockholders at
any annual
meeting or
any special meeting
shall receive a
majority vote of the holders of the guarantee stock”
(italics supplied); and (c) section 1, of article VII, while providing that, “in the event of the failure of the association or its insolvency or impairment from any cause whatsoever all other debts, shares and obligations of every kind and character whatsoever shall be preferred over the guarantee shares and shall be paid in full before any distribution is made to the holders of súch guarantee stock,” and it is also provided therein that: “Dividends may be declared and paid on such shares out of the earnings of the association by the board of directors, to be paid semi-annually or quarterly in
such amounts as the hoard may decide.
The issue of this stock shall be limited to $50,000.00.” (Italics supplied.)
It thus appears that two-thirds of the board of directors must be owners of the “guarantee stock”; that this board has the authority at any monthly meeting to amend the by-laws; that the owners of the other stock, no matter the number or the amount owned by such other stockholders, have no right to make amendments, unless approved by a majority of the board of directors. And, finally, it is apparent that the board of directors, two-thirds of whom are owners of this “guarantee stock,” by amendment to the by-laws, can make and prescribe such designations, preferences, restrictions, and qualifications as to assets, dividends, participation, qualifications, and voting powers, in said corporation, as it, the board of directors, may see proper to do. Without further ■ pursuing the subject, if the foregoing does not suffice to show that the backbone and vitals of the corporation, and its ultimate beneficiaries, are represented by the owners of the “guarantee stock,” then we confess that it is beyond our ken to comprehend what further power and rights in them would be necessary to constitute the owners of the “guarantee stock” the backbone and vitals of the corporation. But back to the real, vital question. That the transaction between appellee and its stockholders, whereby the latter secured moneys from the association on the pledge of paid-up stock, or on pledge of. stock subscribed for at the time of the loans (though not paid for), and mortgages of stockholders’ properties, constituted loans, we have not the slightest doubt. Such is the holding, as pointed out in the case of Bor
*536
rowers’ & Investors’ Bldg. Association et al. v. Eklund, 190 Ill. 257 , 60 N. E. 521 , 52 L. R. A. 637, of the courts of last resort of Connecticut, Iowa, Kentucky, Maryland, Nebraska, New York, North Carolina, Pennsylvania, South Carolina, Texas, and West Virginia, and to which we may add Washington, Utah, Tennessee, Oregon, and Idaho.
Supporting the above proposition, see Fidelity Savings Association v. Shea, 6 Idaho, 405 , 55 P. 1022 ; People’s Loan & Homestead Association of Joliet v. Keith, 153 Ill. 609 , 39 N. E. 1072 , 28 L. R. A. 65; Borrowers’ & Investors’ Building Association v. Eklund, 190 Ill. 257 , 60 N. E. 521 , 52 L. R. A. 637; Mechanics’ & Working Men’s Mut. Say. Bank & Bldg. Ass’n of New Haven v. Wilcox et al., 24 Conn. 147 ; Burlington Mutual Loan Ass’n v. Heider et al., 55 Iowa, 424 , 5 N. W. 578 , 7. N. W. 686; Simpson v. Kentucky Citizens’ Bldg. & Loan Ass’n, 101 Ky. 496 , 41 S. W. 570 , 42 S. W. 834 ; John Armor v. Bank of London, 86 Miss. 658 , 39 So. 17 ; Livingston Loan & Bldg. Ass’n v. Drummond et al., 49 Neb. 200 , 68 N. W. 375 ; Randall v. Nat. Bldg. & Loan, etc., Union, 42 Neb. 809 , 60 N. W. 1019 , 29 L. R. A. 133; Mills v. Salisbury Bldg. & Loan Ass’n, 75 N. C. 292 ; Johnson v. Washington Loan Ass’n, 44 Or. 603 , 77 P. 872 ; Philanthropic Bldg. Ass’n v. McKnight, 35 Pa. 470 ; Pollock v. Carolina Interstate Bldg. & Loan Ass’n, 51 S. C. 420, 29 S. E. 77 , 64 Am. St. Rep. 683 ; Columbia Building & Loan Association v. Bollinger, 12 Rich. Eq. (S. C.) 124, 78 Am. Dec. 463 ; Jackson v. Anna Lucy Cassidy, 68 Tex. 282 , 4 S. W. 541 ; Bechtold v. Brehm, 26 Pa. 269 ; C. E. H. Martin v. Nashville Bldg. Ass’n et al., 2 Cold. (Tenn.) 418; McCauley v. Bldg. & Sav. Ass’n, 97 Tenn. 421 , 37 S. W. 212 , 35 L. R. A. 244, 56 Am. St. Rep. 813 ; Melville v. American Benefit Bldg. Ass’n et al., 33 Barb. (N. Y.) 103; Thomas F. Howells et al. v. Pacific States Savs. Loan & Bldg. Co., 21 Utah, 45 , 60 P. 1025 , 81 Am. St. Rep. 659 ; United States Savs. & Loan Co. v. William Parr, 26 Wash. 115 , 66 P. 109 ; Pfeister v. Wheeling Bldg. Ass’n, 19 W. Va. 676 .
That the appellee’s principal business was lending money, we are still convinced, whether the transactions are called loans or advances, and that the appellee comes squarely within the provisions of schedule 122 of the Revenue Code (see Gen. Laws 1919, p. 419, § 361, schedule 70) we are equally as firmly convinced. The Lake Case, 69 Ala. 456 , decides nothing to the contrary.
The appellee seems to think that the case of Ballard v. Ponchatoula Homestead Ass’n, 137 La. 677 , 69 So. 91 , is an authority directly in point, supporting its contention that schedule 122 of the Alabama Revenue Code has no application to appellee’s business. A careful reading of that case, in connection with the law of Louisiana, statutory and constitutional, will demonstrate that it is not 'an authority against our holding in this case.
Our recent case of State v. Guaranty Savings Building & Loan Ass’n, 225 Ala. 481 , 144 So. 104 , 86 A. L. R. 819, while not directly in point on the question now before the court in this case, serves to show that building and loan associations are in fact business corporations, subject to the taxation laws of the state, unless by some valid’ law they are expressly exempted therefrom. The only persons or institutions, whose principal business is lending money, exempted from the payment of the annual license of $100, are banks and banking institutions. The appellee is not a bank, or a banking institution, and its principal business is lending money, and it, therefore, comes within the class of whom the license is exacted.
The application for rehearing must, therefore, be overruled.
Rehearing denied.
ANDERSON, C. J., and THOMAS and BROWN, JJ., concur.