Court Opinion

ID: 6887314
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:32:07.540006+00
Date Added: 2024-06-11T16:05:45.005745
License: Public Domain

MAJOR, Circuit Judge
(dissenting).
The opinion appears to rest largely upon the theory, erroneous in my opinion, that a bank director can effect his resignation at any time and immediately retake possession of stock which he has deposited in conformity with statutory mandate. Necessarily, the opinion must rest upon this foundation for the reason that it is well established law that a garnisher stands in the shoes of and can acquire no rights superior to those of his judgment debtor. Schmitz v. 75th and Exchange Drug Co., Inc., 303 Ill.App. 192, 196, 24 N.E.2d 889; Siegel, Cooper & Co. v. Schueck, 167 Ill. 522, 524, 47 S.E. 855, 59 Am.St.Rep. 309. It is my view that the relation which the Illinois Banking Act creates between director and bank cannot be severed in such an informal fashion. If so, the incongruous situation exists by which a director can one day deposit his stock as a statutory requirement for qualification and the next day, for good reason or no reason, withdraw it and thereby disqualify himself.
It must not be overlooked that banks are impressed with a public interest, and the legislature no doubt intended to exact a high degree of care in their management and operation. Directors are elected by the stockholders “to serve as managers for one year, and until their successors are elected.” A director is required (Sec. 4) to subscribe to an oath of fealty to the bank, not for a day or a week, but for the term of one year and “until a successor is elected.” His oath requires that he will “diligently and honestly administer the affairs of such bank * * * that he is the owner in good faith and in his own right of the number of shares of stock required * * * that the same is not hypothecated or in any way pledged as security for any loan or debt.” The oath must be “immediately transmitted to the Auditor and shall be filed and preserved by him in his office.” It is required that the stock “shall be filed unendorsed and unassigned by him with the cashier of such bank * * * during his term as director
So we have a situation where a director is elected for a definite term, with the requirement that the stock be deposited during such term. The most he could do, in my judgment, would be to tender his resignation, which might or might not be accepted. It is not difficult to visualize numerous situations where the affairs of a bank might be such that the other directors would refuse to accept the resignation, and even where the state Auditor, who has a supervisory capacity over banks, might refuse to permit the resignation, even though agreeable to the directors. If a director can abruptly terminate such relation and with it the obligation which he has assumed, there could be little stability in banks, -and the purpose of the legislature would be thwarted. The opinion stresses the words “any director who ceases to be the owner of the capital stock of such bank * * * shall vacate his place as such director.” This language might be susceptible of the construction placed upon it when standing alone, but must be construed otherwise, in my opinion, when considered in connection with the statutory requirements as a whole. Just what the legislature intended by this phrase I do not know, but I feel reasonably sure that it was not for the purpose of permitting a director to make an overnight escape from his responsibilities.
Even though I be mistaken in the views already expressed, I think there is a further reason why the result reached by the majority cannot be sustained. Whatever be held with reference to t-he right of a director to effect his resignation and thereby reclaim his deposited stock, the fact remains in this case that he had not done so. If he had such a right, it was personal, the exercise of which required voluntary action on his part. This calls for the application of another pertinent principle of garnishment law, and that is that the proceeding will not lie unless the garnishee is indebted to the judgment debtor without any uncertainty or contingency at the date when the answer to the garnishment suit is filed. Larson v. McCormack, 286 Ill. App. 206, 208, 2 N.E.2d 974; Zimek v. Illinois Nat. Casualty Co., 370 Ill. 572, 576, 19 N.E.2d 620. Whatever right the director had to retake possession of the deposited stock was contingent upon his resignation, assuming that he had such right. The relation between the bank and the director being thus contingent at the time the former answered the garnishment *204suit, the garnishee creditor was entitled to take nothing.
Furthermore, it is a rule of garnishment that a person deriving his authority from the law to receive and hold money or property cannot be garnisheed for the same when held by him under such authority. Millison v. Fisk, 43 Ill. 112, 118; Equitable Trust Co. v. Clark, 119 Ill.App. 341, 343. The stock was deposited with the bank by the express mandate of the statute and was required to be held by it until the purpose of its deposit had been served. For this reason, it was not subject to garnishment.
Of course, there is no legal question here as to whether the director is valuable or otherwise, or concerning his personal qualifications. I assume that is a matter for the stockholders who elected him and the Auditor who approved such action.
For the reasons stated, it is my view that the judgment below should be affirmed.