The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-04-09
GET THEIR MONEY BACK AGAIN.
THOSE WHOSE DEPOSITS WE'RE
MINGLED WITH OTHER THAN
CASH ASSETS
CANNOT GET THEM AT THIS TIME.
Judge Bunn's Ruling on Bank OF
Minnesota, Allemannia, Germa-
MIA and West side.


have been submitted to his honor since
the suspension Of the banks. The pro-
ceeding in each was an application of
the depositors for the return of money
and checks deposited in the banks on
and prior to the dates of the suSpen-
sion thereof The cases In which Judge
Bum has handed down decisions are
those of the Bank of Minnesota, the
Germania, Allerlannia bank and West
Side bank Each decision is accom-
panied by a memorandum, fully setting
forth the views of the court upon all
the questions raised. The memoran-
dunn in the matter of the application for
the return by the receivers of the Bank
of Minnesota Of the deposits made Dec.
q, 1885, the day before the bank closed
its doors contains an exhaustive re-
view OF the circumstances and condi-
tions under which the deposits were
made. The question as to the insOlven-
cy of the bank prior to Dec. % Is freely
examined, and all the points raised by
counsel clearly and minutely discussed.
The principal questions that the court
was called upon to decide in all the
cases were. could the claimants trace
their deposits into the hands of the re-
/ ceivers OIL aSsignees, and did the Of
ficers of the banks at the time of re-
ceiving deposits have sufficient knowl-
edge that their banks were insOlvent
+ to charge them with fraud in receiving
/ such deposits.
: The most interesting case is that of
/ the Bank of Minnesota There is moth
Il.
memorandum accompanying the order
in this case. The court finds that the
; Bank of Minnesota was insolvent long
before Dec. %. 1896, and should have
/ closed its doors long before 1t did. The
! court holds that the officers of the
bank knew of such insolvency and that
! this knowledge gives to the depositors
/ of Dec q the right to rescind their
contracts, and to recover their money
! If they can trace it into the fund in the
hands of the receivers. In the item of
! currency deposited with the Bank of
! Minnesota, applications for its return
will be denied, the claimants having
failed to trace and identify it in &C
, cordance with the rule.
BANK OF MINNESOTA.
| Following is the decision in the Bank
! of Minnesota case, with the accompa-
| nying memorandum:
In the matter of the receivership Of the Bank
| . of Minnesota.
4 Memorandum applications for return OF
/ deposits made Dec. 81 1896. 4
Orders prepared in accordance with the fol-
/ lowing views will be signed upon presenta-
! ton;
First-Checks and drafts on other hanks
! fIIrn
tendent of banks, and collected by him or
! by the receivers. Proceeds of such checks
j and drafts will be ordered returned to de-
! poSitors.
! Second-Checks and drafts deposited Dec.
1 Il, sent to correspondents for collection and
proceeds not returned. Applications as to
! such items will be denied.
Third-Checks drawn on Bank of Minnesota
! No orders for return Of these checks will be
made in this proceeding.
Fourth-Certffcates of deposit renewed on
! Dec. q or %. Application denied.
Fifth-Claim of Hauser Mating company.
! Check will be ordered returned to claimant
Sixth-Checks,. proceeds of which receivers
| dispute possession Of; proceeds of one check
! Of $40 deposited by F. ]. Huber and checks
! for $1S.75 deposited by Ericsson, Brady &
| Co., will be returned by receivers. Other
| disputed items, amounting to $3.50, will be
retained
Seventh-Drafts bought of Bank Of Mime
sofa and unpaid. Application will be denied.
I Eighth-Cash Deposits. AS to deposits
of gold coin made by claimants receivers
! will be ordered to return to claimants
amounts equal to gold deposited. q As to
! deposits OF currency, the applications will be
! denied
/ Judge Bum then followed with a
very lengthy memorandum. In this he
sets forth that the claimant must first
show that the title to the checks
drafts, or money deposited is in him
| AS to checks and drafts, the claimant
must show either the bank was acting
| Co.,
or that the bank was in such condition
that in receiving the deposit with
| knowledgs of the banks condition, the
officers were guilty of a fraud which
would nullify the contract.
AS to deposits of currency, only the
second way of showing his title is oper
| to the claimant.
Perhaps a majority of the claimants
have pleaded that the bank was mere
| ly an agent Cor the collection of checks
and drafts, and have introduced thJ
statement in the pass books in support
! of their contention. Evidence has also
been introduced tending to show a Gus
tom of charging back the checks OF
drafts If unpaid to the depositor, and
an understanding to that effect. The
| court is compelled to hold, therefore
| that as to those claimants who have
pleaded and proved the above agree
| ment and custom of doing business
! the bank did not acquire title to checks
| and drafts deposited on Dec. 81 but
| that the title to such checks and drafts
| remained in the depositors. The court
has also reached the same result or
| the question Of the right Of depositors
to rescind for fraud. Judge Bum then
| proceeded
| The second method Of showing title in the
! depositors to checks, drafts and money de-
posted Dec. a. is by showing rescission
Of their contracts of deposit. The right to
rescind the contract depends upon the Ques-
| ton OF whether or not the bank or Its Off
| GERS, in receiving the deposits, were guilty
| OF fraud. II so, the fraud vitiates the con-
tract, the depositor may reScind, the contract
| is nullity, and the title to the deposits,
! which under valid contract would pass to
/ the bank, is in the depositor. The bank never
| had the title, but was at all times after
| the deposit was made, trustee male1cio.
Were the officers of the bank guilty of fraud
| justifying rescission? Much time and labor
| have been spent in an endeavor to show that
| the bank on Dec. Il was hopelessly in
! solvent within the knowledge of the officers.
| l am not prepared to say that technical in
| solvency has been shown, and do not think
| 1t necessary to show 1t. No reason is sug-
| gested why technical insolvency is an essen
| tial element Of fraud that will justify resets
| sion; no different rule should be applied to
| find fraud on the part of banker than in
| the case Of any other party to a contract.
| 1t seems perfectly clear to me that If the
| condition of the Bank Of Minnesota at the
| time these deposits were received, was such
that 1t was hopeless to expect that 1t could
| continue as a going concern, this condition
| being known to the officers and unknown
| to the depositers, 1t was a fraud to receive
| these deposits, and such fraud as gives the
| right of rescission. The banker, when he
receives a deposit agrees to pay back all or
any part OF 1t on demand. If he knows, or
ought to know, that he will be unable to
| keep this agreement, and conceals this knowl-
| edge Of facts that go to the very root of the
contract, he is guilty Of fraud.