Court Opinion

ID: 3414605
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:42:16.803824+00
Date Added: 2024-06-11T13:51:57.316313
License: Public Domain

I am unable to concur in the majority opinion. The receivers of the Cairo Bridge and Terminal Company were under an obligation to the creditors of that company to secure its assets in so far as it was possible and for that purpose undertook to have certain funds on deposit with the Cairo-Alexander County Bank transferred to the trust department of that institution. This transfer was made more than a month before the bank closed its doors. It is true the money was not drawn out of one window and redeposited in another, but such is not the way of doing business in banking institutions. The legal effect of the transfer on the books of the bank was the same, however, as if the receivers of the bridge company had withdrawn this *Page 594 
fund and re-deposited it with the trust department.American Exchange Nat. Bank v. Gregg, 138 Ill. 596.
The trust department of the bank was inaugurated in accordance with the legislative enactment, (Ill. State Bar Stat. 1935, chap. 32, p. 928; Smith's Stat. 1935, p. 878;) which provided that certain securities should be deposited with the Auditor of the State as collateral for trust funds in the hands of the bank. We are not concerned with the validity of the provisions of the Trust Companies act giving the bank the right to create such a trust department, inasmuch as the constitutional question has not been raised. A trust department was in existence, however, as part of the Cairo-Alexander County Bank, and was, in fact, the trust department of that institution. There was money in the bank sufficient to pay the claim of the receivers at the time the transfer was made. It was the evident purpose to create a trust, and in my opinion such a trust was created by the action of the parties.
The case of People v. Wiersema State Bank, 361 Ill. 75, is not in point. The fund created in that case was not a trust fund but an illegal preference. It arose out of a contractual agreement between the depositor and the bank, under which the bank placed certain securities in escrow in order to secure a deposit. This agreement provided that in the event the bank failed or did not pay the deposit when demanded, the depositor, the Fernwood Park District, could subject the collateral so deposited in escrow to the satisfaction of its claim. This was an attempt to place the deposit of the park district on an entirely different footing from all other deposits in the bank, and this, it was held, was beyond the power of the bank to do. In the case at bar the receivers of the Cairo Bridge and Terminal Company could only share pro rata with the other creditors of the bank out of the funds deposited as security with the State Auditor and with such cestuis que trust as were similarly situated. In the case of People v. Wiersema State *Page 595 Bank the depositor pro-rated with nobody but looked to the security placed in escrow to secure his claim. So far as I am able to see, there is no legal similarity.
For the reasons stated I am compelled to dissent from the majority opinion.