Court Opinion

ID: 6973431
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:06:44.027255+00
Date Added: 2024-06-11T16:08:52.800788
License: Public Domain

Vickers, J., and Hand, C. J., dissenting: We do not concur in the opinion of the majority of the court in this case. The conclusion is reached by construing section ii of chapter 16a of Hurd’s Revised Statutes as requiring the Auditor to give the president of any bank organized under the State Banking act, the capital stock of which has become impaired, thirty days’ notice before filing a bill in equity against such bank and its stockholders for the appointment of a receiver and for winding up the affairs of such bank. The section of the Banking act under consideration is set out in full in the foregoing opinion and need not be here repeated. By reference to said section it will be seen that provision is made for an action at'law against the stockholders and an action in equity against the bank and the stockholders. When the entire section is carefully analyzed, marked differences will appear in the two remedies, both in the means to be employed and the objects to be attained. In the action, at law the suit is against each stockholder for his pro rata share of the impairment of the capital stock, and the judgment, which includes “all costs and reasonable. attorney fees” to be taxed by the court, is for “the use of said bank.” In these suits against the stockholders, which apparently must be several and not one joint action against all, the bank, as a corporate entity, is the real beneficial plaintiff. It is clear to our minds that in providing this legal remedy against the stockholders it was intended that the Auditor should resort to it in all cases where the conditions were such that it would be efficacious. It is not applicable to a case of insolvency where the only thing that can be done is to throw the institution into involuntary liquidation. For this purpose the equitable remedy is provided. The bill in equity is not a suit for the use of the bank, but its manifest purpose is to take the control of the bank out of the hands of its officers and place it under the direction of a court of equity, through its receiver, so that its assets m,ay be collected and distributed to the creditors. It is not to be presumed that the more drastic remedy in equity would be resorted to in any case where the remedy at law would prove adequate. The legislature has left the selection of the remedy to the discretion of the Auditor. It seems that the vesting of this power in the Auditor has excited the apprehension of the majority of this court lest this discretion might be abused and a bill be filed for a receiver when only a slight impairment of capital existed. In our opinion this argument is unsound. Experience has shown that discretion vested in executive officers of the government is not abused more frequently than when vested in judicial officers. Under section 5434 of the statutes of the United States, (1878,) and the amendments thereto, the comptroller of the currency is given much greater power in respect to national banks than section n of our statute confers on the Auditor in regard to State banks. Under the Federal law the comptroller is authorized, when he becomes satisfied that a national bank is not complying with the law by paying its circulating notes, to appoint a receiver and proceed to wind up the affairs of the bank. The comptroller is in such case vested with power far greater than is conferred on the Auditor under the statute, yet we have to learn, in the more than thirty years that this power has resided in the comptroller, of a single instance where it has been unwisely or capriciously exercised. If the comptroller can thus be safely entrusted with such a power over national banks, is it reasonable that the legislature of Illinois would be deterred by the possibility suggested in the majority opinion from conferring the limited and guarded power on the Auditor? We think not. In our opinion the law-making department intended to pass a workable banking law for the government of State banks, and that in the system devised it was intended that the Auditor should exercise powers of the same general character over State banks that the comptroller exercises over national banks. In a case such as the one presented here, where the president of the bank is a defaulter and is a refugee from criminal justice, it is idle to say the Auditor must give thirty days’ notice before he can file a bill to have' a receiver appointed. The facts recited in the bill in this case furnish a striking illustration of how the rights of creditors may be imperiled by so construing the statute as to compel the Auditor to stand idly by for thirty days after he knows the bank is insolvent, thus allowing time enough for the defaulting and dishonest bank officials to complete the work of devastation before any restraining action can be taken. Here the bill charges that the president of the bank, with the aid and connivance of the cashier, had misappropriated about $1,000,000 of the bank’s assets, and when unable longer to conceal the shortage by false and fictitious book-keeping, the president fled the country, and when last heard ‘of was in hiding in Morocco, Africa. It seems to us that the legislature must have had in contemplation such emergencies as exist here, and that to meet them it was intended that the Auditor should have power to proceed at once, and without notice, to file a bill and have a receiver appointed. If it be said that the creditors may proceed by bill on their own account and secure the same relief, we reply that this argument proves too much. If good, it affords a reason for dispensing with State supervision overstate banks entirely. If creditors can take care of themselves, why give the Auditor any power to act in any case, either with or without notice? It is reasonable to suppose that the legislature intended to safeguard the rights of depositors in State banks by conferring a substantial and beneficial power on the Auditor to do something on behalf of the creditors that they could not do for themselves. Creditors may file a bill, it is true, but before doing so they must obtain judgments and have execution returned nulla bona, and it was, no doubt, in part to obviate the delay incident to such a course that the power was conferred on the Auditor to proceed at once when, in his discretion, the safety of depositors indicated such course. The view of the majority virtually defeats this salutary purpose by tying the hands of the Auditor until action on his part will become, in many cases, wholly barren of results. In the view we take of this statute the thirty days’ notice has no application to the suit in equity but is limited to actions at law against the stockholders. This section of the statute is remedial, and' was adopted by the people for the purpose of placing State banks under the control of the State, in order that they might merit and enjoy the confidence and patronage of the public to the same extent and for the same reasons that national banks do. The opinion of the majority, it seems to us, takes away all the safeguards that the legislature intended to throw around these institutions, and results at once in a great injustice both to the banks and their patrons. In construing a. statute the intent of the legislature is the controlling consideration. In presenting these dissenting views we have sought to point out briefly some of the reasons which seem to forbid our attributing to the legislature an intent to do a thing so unreasonable and inconsistent as requiring a thirty days’ notice before filing a bill for a receiver. The language of the section does not imperatively demand such construction, and since, as we have sought to show, such construction tends to encourage the very evil intended to be remedied, the construction adopted by the majority should be rejected and one adopted which will accomplish, and not defeat, the legislative intent.