Sterling v. Tantum

Pennewill, C. J., delivering the opinion of the court: The sole question involved in this case is whether the Equitable Guarantee and Trust Company is a bank within the meaning of Section 4120, of the Revised, Code of 1915, which provides, inter alla, that: “All corporations doing business in the state, except banks, savings institutions and loan associations are subject to the attachment laws of the State of Delaware, as provided in the case of individuals.” Prior to the enactment of this statute corporations were not subject to the attachment laws of this state. Is a trust company which is vested with banking powers subsequent- to its creation, liable to attachment with respect to moneys held by the company, not in its banking capacity but as a trust fund entirely separate and distinct from its banking department? This is the specific question the court are required to determine. It will be observed from an inspection of the company’s charter that deposits made with the company were exempt from attachment “in the same manner as are the deposits of banks and like institutions.” This act was passed many years before “banking powers” were expressly given to the company by an act of the legislature passed in 1909. The company was created a guarantee and trust company, and as such was authorized to receive and hold on deposit money and other property. Counsel for the attaching creditor argues that the receiving and holding of money on deposit is a banking power. This is not disputed, indeed it is shown by almost every authority cited by the company. It is perhaps not the power that most distinguishes a bank from certain other institutions. It did not originally possess the power of discounting notes or bills. Counsel for — 424 — the creditor argues further, that although the company did possess a banking power it was not thereby made a bank, for if it was, it would not have been necessary for the legislature, by the act incorporating the company, to exempt its deposits from attachment, they would have been exempt under general law; that although the amendatory act of 1909 vested the company with general banking powers, it was not thereby made a bank within the meaning of the act passed in 1871 which exempted from attachment process banks, savings institutions and loan associations; that after the passage of that act the company was no less a trust company than before; it was still a trust company with additional powers, but not a bank any more than an industrial corporation or railroad company would be if given banking powers. Such in brief is the argument forcefully and plausibly presented by counsel for the attaching creditor. Did the conferring of banking powers on the company by the amendatory act make it a bank? If it did then it was unquestionably exempt thereafter from attachment no matter in what department of its varied business the money sought to be attached might be. The company, as a whole, is a corporate entity and indivisible. Attachment process is issued against the company and not against any particular department of the company. So far as the application of the law is concerned it does not matter whether the money and credits sought to be attached are in the banking or some other department of the company’s business, for it is the company that is attached, and it is the company that must answer, if liable to the attachment. If it is a bank it is not liable, and cannot be attached in whole or in part. Does the conferring of full banking powers upon a trust company make such company a bank? There would probably be no doubt about this question if the policy of the law, and our. sense of fairness and justice were not opposed to any enlargement of exemptions under the attachment law. If the Equitable Trust Company should be held to be a bank because it is vested with banking powers, the effect would — 425 — be, not to exempt its deposits from attachment, for they were exempt before, but to exempt moneys and credits in all other separate departments of the company’s large and varied business. It may be that the legislature did not intend or contemplate that the conferring of banking powers on this company should have any such effect. It is, not the policy of the law that money or other property of a debtor should be exempt from attachment for his debts. This is manifest from the fact that the only institutions excepted from the operation of the statute are banks, savings institutions and loan associations. Trust companies were not in existence in this state until many years after the attachment statute was passed, and they could not, therefore, have been within the contemplation of the legislature at the time. In very few states, other than Delaware, are even bank deposits exempt from attachment. It is the policy of the law generally to make a debtor’s property liable for his debts, and not to make it easy for him to circumvent his creditors. The exception of certain institutions in this state from the attachment law was not intended to benefit the debtor or assist him in escaping the payment of his debts. It was designed to aid those institutions in the performance of their duties, and mainly by preventing the attachment of their deposits. In 1871 when the attachment statute was passed there were very few banks in this state, and they were doing a purely banking business. Practically all the property they held that could be attached were deposits of money, and manifestly such was the property the legislature meant to exempt. The exception of moneys and credits that were in no way connected with banking, but held in other and separate departments of a modem trust company, could not have been contemplated at all. In the light of conditions existing at the time it may be fairly assumed that all the law making body sought or intended to do was to exempt deposits connected with banking business. But while this is all doubtless true, it may be immaterial in the determination of the present case, in the decision of which we must be governed by the law as we find it and not by its effects. The intention of the legislature must be gathered from the lan — 426 — guage of the particular statute and not from what the court think must have been intended in view of then existing conditions and the general policy of the law. As a general proposition it is unquestionably true that the investing of a corporation with banking powers makes it a bank, no matter by what name it is called. Calling an institution a bank does not make it a bank in legal contemplation if it is not given the powers of a bank. And conversely, calling an institution a trust company does not prevent its being a bank within the meaning of the law, if it possesses and exercises all the powers of a bank. The only way to create a bank is to give it the powers of a bank. That is exactly what has been done in the case of the Equitable Guarantee and Trust Company. The legislature has vested it with all the powers of a bank, and by so doing has made it a bank within the meaning of the statute that excepts banks from the operation of the attachment statute. We cannot escape the conclusion that when full banking powers are given to a trust company it is thereby made a bank. When it is made a bank the company is exempt from attachment because it is expressly excepted from the operation of the attachment law. If trust companies, outside of their banking departments, ought to be subject to the attachment laws of the state, the legislature should make them so. The courts have not the power. We realize that much confusion, and perhaps hardship, might be caused if we held that the conferring of banking powers did not make the company in question a bank. It would not injuriously affect this company because its deposits are exempt from attachment under its charter. But the deposits of other trust companies now or hereafter created may not be expressly exempted and if they are not banks, their deposits would not be exempt from attachment at all. Confusion might also be caused by the fact that national banks, under a recent act of Congress, are given powers other than banking powers, and the question would arise whether such banks would be liable to attachment with respect to moneys and credits — 427 — held in departments separate and distinct from their banking business. But regardless of possible effects and results, we feel constrained to hold in this case: 1. That the vesting of the company with banking powers made it a bank within the meaning of the attachment law, and 2. That the company being a corporate entity, and indivisible so far as the service of process is concerned, it is not liable to attachment in respect to moneys in its trust department, or any other department of its operations, even though it .be separate and distinct from its banking business. In view of the decision above given it is not necessary that the court should express any opinion on another proposition that was strongly and fully argued by counsel for the attaching creditor, viz.: Where the only remaining function and duty of a trustee is to pay over to his cestui que trust a sum of money, made certain by the terms of the trust, by an account passed by the trustee, by an agreement between them or by an order of court, the cestui que trust has an action at law against the trustee to recover such amount, and it is attachable in the hands of the trustee by a creditor of the cestui que trust by attachment^, fa., or on foreign attachment, as the case may be. While it may not be necessary, as already observed, to express any opinion upon this proposition, we think we may properly say that its soundness is admitted by counsel for the company, and supported apparently by all the authorities on the subject. It is ordered that the foregoing opinion and decision be certified to the Superior Court, New Castle County. [Signed by the Judges.] The same was immediately filed with the prothonotary, and the Superior Court, thereupon, made the following order: “And now to wit, this fifteenth day of March, A. D. 1915, the opinion of the court in banc having been duly certified to this court in accordance therewith, it is now ordered, adjudged and decreed by this court that the motion to quash the garnishee pro — 428 — cess in the above stated case be and the same is hereby granted, and the garnishee dismissed, and that the garnishee have execution for its costs.’’