St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1896-02-28
HUBAcHEK GOES OUT
SIX JUDGES DECIDE AS UNIT IN
THE IRIsH-AMERICAN
CASE.
JUDGE MAH0NEY AS RECEIVER.
DECISION AN IMPORTANT ONE AND
ONE WHICH ESTABLISHES A
PRECEDENT.
THE GRAND JURY GRIND ENDED.
Final Report VIII Be Made Today
General News of the Mill
City.

The depositors have prevailed, and
Frank R. Hubackek is removed as as
signee of the IriSh-American bank and
Judge Stephen Mahoney appointed in
his stead, under bonds or $500, 900.
The six judges came together as a
unit in the findings and the memoir
andum, but there was considerable dis
cussion as to the proper man to act as
receiver in his stead. The decision is
intended to establish a precedent, and
for that reason care was taken in
drawing 1t up, and it voices the best
judgment OF one of the most thoughtful
judges at the bar. The justice of the
appeal of the depositors is all the more
apparent when it is considered that
Judge Belden has favored Mr. Hub
achek personally from his good work
in the past, but felt that the law in
the case must be enforced to the letter.
The decision was filed late last. night
The defense will take an appeal to the
supreme court The decision recites
the facts in the case and makes the
order as above. The main points in
the memorandum were as follows:
Although the evidence in this proceeding
was not as full and complete as might have
DttH ueSIeu, yet we IElOk IL SHOWS reason
able grounds for presuming liability of the
present board of directors for losses suffered
by the bank. We do not purpose, nor Is it
necessary, to enter into detailed discussion
OF this question. The evidence concusively
establishes certain facts, which, unexplained
very plainly indicate culpable fault in the
management of this bank. The disposition of
trustees of monied corporations to extend
mutual accommodations to each other at the
expense of the owners and creditors of such
corporations, seems to have been present in
the management of this bank. 1t is a practice
entirely too prevalent, and as pernicious
1t is prevalent. From what is made entirely
clear by this evidence, we have no doubt but
that the conduct of the affairs of the bank by
the directors should be carefully looked into,
for the purpose Of determining their liability
for unfaithfulness to their trust, and, il we
are correct in our understanding of the law,
the duty of making this scrutiny rests upon
the assignee.
1t is contended by counsel for the assignee
that such duty does not devolve upon him.
That the right to recover damages for loss
resulting from negligence or fraud is not
assignable. But the right to recover for dam
age to property, whether such damage results
from wrongful taking and conversion, or from
fraud and negligence, is assignable. In any
event, we believe that the doctrine Is well
established that receiver or assignee of an
insolvent corporation may maintain such an
action. Thompson's Commentaries on the
Law of Corporations, section 4,121, APP, Alps
and cases cited.
Assuming the liability Of the directors or
reasonable probability that such liability could
be made out, and that the right to enforce
the same passes to the assignee, is the rela-
ton of the assignee to all or any of the direc-
tors such as to legally disqualify him from
fairly representing the creditors? Such LA
bility is an asset, and may be very valuable
one to the creditors. The relation of the as
signee to the creditors is that Of trustee to
his cestui que trust, and such relation
uuires the observance of the most scrupuous
fidelity in all things pertaining to the execu-
ton of the trust. Any personal interest In
the subject matter of the trust adverse to
that of the cestui que trust is deemed dis
qualification. Any relation so close to a per-
son whose interests averse to those of the
beneficiaries of the trust would might
tempt the trustee to depart from the strictest
observance of his duties. is deemed a dis
qualification. This rule does not bend to any
personal considerations.