The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-05-23
SACRED UNDER THE CONSTITUTION
IN SPITE OF TILE LAWS APP
PARENT PERMISSION.
SENATOR sPENCERs NEW Law
Was vigorously Contested by 8
Large Party of Attorneys All
Day Yesterday.

t1nued until next Friday at 10 q. m.
The hearing took place In Court
Room No. 5, in the presence Of a goodly
number Of interested spectators.
though the room was at no time
crowded - $3.50 ~
attorneys in attendance were T.
M Palmer and Capt. Harries, repre-
senting Gustav Willius and the other
petitioners, o. E. Holman. appearing
for the assignee, Peter M. Kerst, Jams
O. Pierce of Minneapolis reprs sentirg
Directing creditors to the amount OF
some So, coo, and Ambrose Tighe, Stiles
Burr, Hubbard & Taylor and other al
torreys representing other objecting
creditors.
In order that the court might be ad-
| vised OF the matter before it, Capt.
Harries read the petition of Gustav
Willius, asking that the plan of reor-
ganization receive the approval OF the
court.
The objection argued yesterday
morning before the court was made by
Mrs. Augustus Lains and Charlotte
Lains, creditors of the bank in the sum
| of $3.50. They appeared by Judge
James 0. Pierce, Of Minneapolis, and
F. A. Hutson, of St. Paul.
After the court inquired with some
care into the service which had been
made on all parties interested, the ar
gument on their objection was in order.
The plan proposed comes under chap
! ter SO of the Laws OF 1897, and to this
law Judge Pierce made objection. In
| his brief, he set before the court the
| following specifications:
| We object to the statute. chapter 50, Laws
of 1897, and to the plan proposed in the petit
ton, in reference to the following features:
1t is proposed to stay the payment of the
indebtedness of the bank in part for the
Of the reopening Of the bank, delay which
is wholly unreasonable, and in itself impairs
the obligation of the contract Of the creditors.
The claims Of creditors, which are nov
drawing per cent upon open account, FROM
and after Jan. 4, 1897, as well as the claim
of those creditors who by contract are en-
tilted to a larger rate of interest, are all re-
duced to the rate of per cent interest from
and after the reorganization of the bank;
thus taking away all interest on these claims
from Jan. 4, 1887, to the reorganization of the
bank, and taking away thereafter the larger
portion of the interest to which creditors are
now entitled.
1t is proposed to reduce the present liability
of the stockholders of the said bank to rs per
cent of such liability, and to require the dis
senting creditors to submit thereto.
In lieu of said 25 per cent of the stockhold-
ers' liability, the creditors are offered aonly
the voluntary subscription, by the creditors of
tHe Dd1fKi OF Sunlc1enJ ad0atl0Hals Stock
no provision for securing the4 payment of the
said Subscriptions, not even for aseertaining
| that sFsubscribers are solvent and can be
/ foreedie pay. r,
None of these requirements are forbidden in
chapter SO, nor are they contrary to any of its
provisions. They are entirely consistent with
its provisions, and probably the petitioner is
right in claiming that the plan proposed is
ute
On the impairment of the contracts he
made the following points:
We object to the said statute and the said
plan of reorganization upon the following
legal grounds, to wit:
The obligation of the contract, as to each OF
the dissenting creditors, is impaired as fol-
lows:
By the requirement that they shall submit
to whatever plan the majority of the creditors
in the first place, or in lieu thereof the court
may determine to enforce against them.
By the unreasonable extension of time for
the final collection of their debts
By depriving them Of all interest on their
claims from Jan. d. 1897, to the time of the
By reducing their interest without their con-
sent, after the completion of the reorganiza-
ton, from per cent or upwards, to per
cent per annum.
By depriving them of 25 per cent of the
statutory liability of the stockholders of the
bank.
By offering them in lieu of said Is per cent
of statutory liability only the subscriptions OF
other creditors to the stock of said bank.
By not providing that the present assets
of the bank, together with the liability of the
| stockholders, shall be as quickly as possible
realized upon or subjected to the claims of
| creditors.
We Furthermore urge that the statute in
question as interpreted in the proposed plan,
| is unconstitutional, because it destroys the
vested rights of those answering creditors,
because it takes their property from them
without due process of law, and because 1t
involves an attempt on the part Of the legis-
lature to delegate to the judicial department
of the government powers which are essen
TALLY legislative in their character, and in no
sense judicial.
In the answer the following further objec-
tons appear and were touched on by Judge
Pierce:
These answering creditors deny that more
than majority in number and amount Of the
creditors of said Germania bank. or any
creditor thereof, exclusive of secured creditors
and Of the creditors preferred under the laws
of the state of Minnesota have heretofore or
at any time formulated or agreed on the
said plan of reorganization, or any plan
whatever for the reorganization of said bank
or for the REIMBURSEMENT of its affairs, and
further deny that upon information and belief
the said petitioner and the said committee Of
reorganization of said bank or either or any
of them have been appointed by the creditors
of said Germaniaz bank, or by any Of them to
submit the said proposed plan of reorganiza-
ton to this court or to petition the said court
for the adoption thereof.
the defendant bank now remaining in the
possession or under the control of said as
sienee are will be of sufficient value to
pay in full all the obligations and liabilities
of said defendant bank and deny that the
said proposed reorganization bank will have
substantially unimpaired capital stock Of
$500, 900.
They deny that three-fourths in number
| and amount OF the creditors Of said bank, ex-
| elusive of the secured creditors and preferred
creditors specified by the bylaws of the said
state of Minnesota assent or heretofore have
assented to the said plan of reorganization
set out in said petition or to any other plan
Of reorganization and aver that large num-
Der of those whom 1t is alleged have Joined
in the formulation of the said pretended plan
of reorganization, did so under a misappre-
hension, and by reason Of certain misrepre-
sentaticns to them seyerally made by or on
behalf of said bank.
That the said plan set forth in said petition
as a whole is impracticable and further is
rot sufficiently definite to apprise the said
creditors or ether interested persons of tho
details of said plan, and said pretended plan
does not set forth any means by which the
assets Of said hank will be conserved, or the
said creditors assured of the proper protec-
tion of the assets of said insOvent bank and
in that regard, among others. the said petition
does not fulfill the requirements of the law
and IS insufficient
That the said bank is insolvent and in the
event of said reorganization it could not meet
It's lawful demands in the regular course of
business as they might mature, and would be
embarrassed and handicapped in the conduct
of It's business.
That the said insolvent bank has not suf-
ficient amount of cash en- hand or in pros
pect to Justify the resumption of business.
Chat the said insovent bank has no repu-
taXon credit in the business community
and cannot command the confidence of the
business community, to the extent necessary
to o. safe banking business.
That the proposed assessment of rs per cent
upon all the stockholders Of said hank, pro
rata, according to the shares of stock held
by each stakeholder. would yield but small
amount of ready money. inasnuch as many
Of the residen. stockholders are not financially
responsible, and such assessments against Ill