Court Opinion

ID: 9885004
Source: CourtListenerOpinion
Date Created: 2023-10-06 03:27:40.391486+00
Date Added: 2024-06-11T07:48:43.258840
License: Public Domain

Mr. Justice Davis, dissenting: Upon the facts of this case, I dissent from the opinion of the court which recognizes that the defendants could delay the transfer of the stock if such action was based upon a reasonable doubt as to the merits of the conflicting claims concerning its ownership. It appears to me that no doubt could be more reasonable than that based on the allegations of a verified complaint filed in a court of record. The court however held that “these allegations were insufficient to support a reasonable doubt as to the merits of the conflicting claims.” If this were true, the present plaintiff Holmes, who was a defendant in the Lenox suit, could have achieved prompt relief by a motion to dismiss or for summary judgment in the original cause of Lenox v. Holmes. However, the attorneys for Holmes deemed this verified complaint sufficient to require an answer, and the trial judge who considered the issues raised by the pleadings, referred the question of the issuance of the injunction to a master in chancery to hear evidence and to report thereon. From the record, it appears that the superior court of Cook County in Lenox v. Holmes found a lack of merit in the Lenox action only after this report was filed and hearing was held thereon. As I read the opinion in this case, the court has not only imposed a duty upon a corporation and its transfer agent to undertake an independent inquiry to determine the merits of conflicting claims presently pending before a court of record, but the court has also required that such determination must be immediately and correctly made at the peril of the corporation and its transfer agent. It is inconsistent for the court to state that the law does not “permit the officers or agents of a corporation to arrogate to themselves the functions of a court” and yet hold that the defendants are liable for failing to determine the validity of the Lenox claim more promptly than the superior court. Justice will be ill served by the rule here established —that a corporation and its transfer agent, at its peril, must prejudge the merits of pending litigation. Neither do I agree with the conclusion of my brother House that the defendants had a duty to suggest a manner by which the stock could be transferred. While such procedure may be proper in the light of good public relations, the law does not require it. It was the obligation of Mrs. Holmes to determine the course she should follow. She could have sought an order of court permitting the transfer of the stock, a summary disposition of the complaint in Lenox v. Holmes, or she could have tendered a sufficient indemnity bond to the corporation. The choice of such procedures was a decision for her to make. I find nothing in this record to reasonably suggest that the defendants would have refused a transfer if she had pursued any of these methods. The refusal to transfer clearly indicated the cause for the delay and it was her duty to eliminate it. Mr. Justice Schaefer joins in this dissent.