Court Opinion

ID: 9745772
Source: CourtListenerOpinion
Date Created: 2023-08-27 13:31:07.71538+00
Date Added: 2024-06-11T07:25:04.461026
License: Public Domain

CHIEF JUSTICE BILANDIC, dissenting: I respectfully dissent from the majority’s conclusion that the defendant bank had the contractual right to set off Robert’s individual debt against the CDs, which were jointly held by the plaintiff and his two sons. I also disagree with the majority’s conclusion that inquiry into the doctrine of mutuality is irrelevant. I would hold for the reasons discussed below that the bank had no contractual right to set off Robert’s individual debt against the jointly held CDs. Because there was no contractual right to a setoff, a setoff would be permitted only if the doctrine of mutuality is satisfied. That doctrine is not met here. While I agree with the majority’s conclusion that there was a contract between the plaintiff and the bank, I disagree with its conclusion that this contract provided for a setoff. The only evidence that the majority cites in support of its conclusion that the contract between the bank and the plaintiff provided for a setoff is language in the CDs that provides that the bank could treat any person named on the CDs as the absolute owner. The majority apparently finds that this language, standing alone, creates a contractual basis for a setoff. The majority cites Selby v. DuQuoin State Bank (1991), 223 Ill. App. 3d 104, as support for this conclusion. The majority’s reliance upon Selby is misplaced. In Selby, the court allowed a bank to set off from a joint checking account the debt of one of the depositors. The facts in Selby, however, are distinguishable from the instant case. In Selby, the signature card agreement for the joint account disclosed the bank’s right to set off either depositors’ debts against the joint account. (Selby, 223 Ill. App. 3d at 109.) In the instant case, on the other hand, neither the signature card nor the CDs provide for the bank’s right to a setoff. Therefore, the contract between the plaintiff and the bank does not sufficiently provide for a setoff. The majority also improperly concludes that inquiry into the doctrine of mutuality is irrelevant. In the absence of a contractual basis for a setoff, mutuality is essential to the validity of a setoff. (International Bank v. Jones (1887), 119 Ill. 407.) As this court has previously stated: "[A] bank has a right of set-off, as against a deposit, only when the individual who is both depositor and debtor, stands, in both these characters alike, in precisely the same relation, and on precisely the same footing, towards the bank ***.” (International, 119 Ill. at 410.) In International, this court held that an individual deposit cannot be set off against a partnership debt because of a lack of mutuality. (International Bank v. Jones (1887), 119 Ill. 407.) The court’s reasoning with respect to the doctrine of mutuality applies equally in the context of joint accounts. Here, the bank’s setoff of the joint CDs was improper because of a lack of mutuality between the parties. Although Robert signed his notes in an individual capacity, he held the CDs jointly with his father and brother. Additionally, while the plaintiff stood as a joint depositor on the CDs, he was not indebted to the bank. Therefore, the bank’s setoff of the CDs was improper because of a lack of mutuality. For the reasons stated, the bank had no right to set off the amount Robert owed for the farm loans against the jointly held CDs. Accordingly, I dissent from the majority’s decision.