The Helena independent. [volume] (Helena, Mont.) 1875-1943, 1894-02-13
ALL TAKE The SAME CHANCES.

Decision In tho Case of tho Bozeman
Bank vs.. Canal Company.
An opinion was rendered by Judge Hunt
yesterday In the case of the Bozsman Ma
tional bank Va. the Gallatin Canal company
and othe s. The Bozeman National bank
had loaned money to the Upper West Gala
Tin Canal company mi had taken for Sc
curity SIS 600 worth OF the bonds which
we're issued by the Gallatin Canal company
after that company was 70 med. Tae
Gallatin Canal company was authorized 60
issue $500 worth of bonds, and the BD2s-
man National bank asked that the Xl2 00l
worth Of bonds they held be declared a u
prior 80 the other $4,000 worth OF hoHu
authorized. 20 be Issued. The Montana Ma
,ional band intervened in the suit. ana
chained that 10 had loaned $4,000 60 the
Gallhtin Canal company. and held as Sc
curity $50, 600 worth OF the hrst mortgage
bonds, and that 10 was entitled to share
equally with the Bozeman National bank
under any sale and fore closure Of
the property. The Gallstin Canal
conf any answe ed the tanks com plaint
anu set mp fraud on the part OF IL. IL.
kleinsohmidt and Others in the issuance
OF said bonds, and charged tue bank
with being party TO tbs fraud. The
bank sued the GallAtiu Canal company
after il had passed into the hands of a re-
oeiNer, but the receiver was not mauo
party 20 the suit.
The court holds that there IL no distine-
ton 10 be drawn between the whole Issue OF
hrEt mortgage bonds for $40. QUO, and that
there beiRg no proof OF any fraud on the
part OF the bank In tue loan OF the 80 OOO
to tbe corporation, the corporation cannot
sithsr repudiate ia obligation 10 ths bank
or have its lien declared junior to the lien
OF the Bozsman bank. he court further
holds that the prayer OF the Bozemsn bank
to enforce q vendors lien must be med.
because such lien being q privilege, II held
~ all. which belonged only to the iginal
vendors, II could not be onio ced by ths
Bozeman bank, assignee Of such vendor.
Ths court also decides that when tie
MontanH bank levied an execution upon she
$50 600 worth OF bends which 10 held as
pledges IL waived its lien OF pledge by part
ina with the possession OF the property.
and Is forced, by operation OF law. into
reliance upon its sale under 10 execution.
But il 10 decided that when the bank re-
leased possession 30 the sheriff the receiver
was the proper custodian Of the bonds, and
in their sale under execution the sheriff
did that which may be avoided by the re
ceivsr N he elects TO set such sale aside.
The receiver not having come Into court az
al in this action 10 granted twenty days In
which TO appear. And tho court holds 10 IL
Lis right 10 affirm she judgment sale 90 the
bank oT set the same again, and that II he
elects TO pursue the latter course all parties !
will be treated hs IL no sale had been had.
in which case the bonds would still remain
pledged TO the bank as security.
In order 30 settle the n. hts Of all parties
N this suit the dec se is ordered held in
allowance until the receiver exercises an
electioR. IL he fails TO appear his silence
will be deemed an aifrmance OF the exscu-
tion sale TO Reeeiver MARROW. in which case
the title TO the bonds vii become absolute
in MARROW for the Montana National bank.