Court Opinion

ID: 6961695
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:46:43.115765+00
Date Added: 2024-06-11T16:08:27.682742
License: Public Domain

Mr. Justice Dickey, dissenting: I did not concur in the ruling adopted by this court in Penn v. Bornman, 102 Ill. 523, and I now think it ought to be overruled. Conceding, however, the doctrine taught by that decision, it simply shows that the promise of Pope to repay the $2000 contained in the note made by Pope to the bank, was void, and that the promise made by Pope that the money should be paid in accordance with the terms of that note, contained in his guaranty on the back of the note, was also void. The case goes no further. The prohibition in the statute is, that “no director of said corporation shall be indebted to said corporation * * * to an amount greater than seventy-five per cent of the amotint of the capital stock held by such director in good faith as his own.” This does not forbid the loaning of money to such a director upon the promise of some other party that it shall be repaid. The statute did not prohibit the bank from lending to Pope, its director, any sum of money upon the credit of Charles Bautenberg. There is no prohibition in the statute against Bautenberg becoming indebted to the bank. Assuming the promissory note made by Pope to be inoperative and void, yet when Charles Bautenberg indorsed upon the back of it his promise that the money mentioned in the note should be repaid, he did the same thing, in substance, as if he had simply executed his own promissory note for that amount to the bank. He rested under no disability. The law did not prevent him from becoming indebted to the bank, hence the loaning of the money upon the credit of Bautenberg was not in violation of the statute. His contract was not an illegal contract. There was no law forbidding Pope to pay the money mentioned in that note, and hence the contract of Bautenberg that Pope would pay it, was not forbidden by the statute. There are cases, no doubt, wherein the contract of a guarantor is regarded as collateral, and dependent upon the original contract upon which the guaranty is made. In cases where it is inequitable and unjust that the principal in a note should pay the amount, (as, for instance, where the note was procured from him by fraud, and without consideration,) the guarantor of such a note may be relieved by reason of such defence, which might have been set up'by the maker of the note. The contract of a guarantor, however, is not always collateral and dependent. It is often treated as an original promise. The note of a married woman, at common law, was absolutely void, but the guarantor of such a note was liable upon his guaranty. A forged note is absolutely void, but the guarantor of a forged note is held upon his guaranty, as upon an original promise. By the decision in the-case of Penny. Bornman, the bank has no claim against Pope for this loaned money, and by this decision the claim .of the hank against Bautenberg is taken away. We read in the scriptures, that “from him that hath not shall be taken away even that which he hath. ” Expounders of scripture, I believe, are not entirely in harmony as to the lesson taught in this text; but I feel sure it can not, taken literally, be adopted safely by secular courts in administering the law between man and man in relation to their ordinary business transactions. Mr. Justice Craig also dissenting.