The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-06-13
Law IS Held GOOD
JUDGE OTIS PASSES UPON THE
POINT RAISED BY GERMANIA
DEPOSITORS,
WHO OPPOSE THE REOPENING.
DE CONSTITUTIONAL AND
GOOD.
NH0 OPPOSE THE RE0PENlNG.
VESTED RIGHTS NOT INVOLVED.
The Main Application for IleODeni in z
VIII Come Up for Argument
Saturday.

Judge Otis has denied. the motion Of
the objecting creditors to dismiss the
application for the reorganization Of
the Germania bank. The motion to dis
miss was based on the contention that
the law of 1897, under which it is pro-
posed to reorganiZe the bank, is I'M
constitutional, as interfering with vest
ed rights and impairing the obligation
of contracts.
Judge Otis holds that the law is con-
stitutional and the plan of organization
a practicable one, and, therefore, de-
MES the motion to dismiss the applica-
ton. Judge Otis read the order from
the bench yesterday forenoon, After
reviewing the law of 1897 providing for
reorganization, the order is as follows:
1t has been held competent for the legs-
lature TO provide for assignments and re-
ceiverships whereby the entire assets and
property Of the insolvent may be distributed
among those creditors fling releases to tine
exclusion of all others. When assign
ment is made the property passes to the as
signee in trust for the benefit Of such cred
itors as may see fit to accept the provisions
thereof, and the same is administered by the
court through such assignees in accordance
with Law. 1t is competent for the legislature
with respect to the assigned property, 10 make
der reasonable conditions and restrictions
and to compel such accept the benefits OF
the assignment to abide by the provisions
made In that behalf. AS to assignments,
then, made after this law took effect, and
before rights of property have become vested
there is no reason why every provision of the
act, wherever applicable, may not be given
full force and effect and be construed an
extension Of our insolvency laws. In such
cases, dissenting creditors may be required
70 abide by such plan as the court in the ex-
erc1se OF a reasonable discretion, and within
the provisions OF the act, may~see fit 10 ap-
prove, ana to share equally and ratably, and
not otherwise with the consenting creditors
and be paid only in the manner and at the
time they paid.
1t goes without saying that In any case,
whether the assignment be prior or subsequent
to the passage of this law, where all creditors
consent, the court may approve any plan Of
reorganization within the law, and all. cred
tors will be bound by it. 1 hold, upon the
authority of Gilfllan VS.. the Union Canal com
pany, that all creditors not appearing to OBJ
1ect at the hearing are to be classified as as
senting creditors
1t follows from what have said, that with
reference to two classes of cases, at least
this act is not open to the objections urged
against 1t, but is both constitutional and sus-
ceptible Of practical application 10 such cases.
Can 1t apply to prior assignments, such as
the one at bar? By its terms 1t Is intended to
apply to such case, and in constituting its
terms it is necessary to keep in mind that it
is intended to cover the three classes of cases
nave suggested, ana It's PROVISIONS should
De considered in the light of such intention.
There is no reason why it may not apply to
prior assignments provided only it does not
impair vested rights. 1t is to be observed
that large discretion with reference to the
; plan TO be adopted is vested in the court
and Its approval is essential to it's validity.
The court acts according to legal rules and
any provision OF the plan within the province
| OF the act which may contravene any substan-
t1al right must be rejected, although entirely
| applicable and enforceable under conditions
| unlike those here presented, such, for in
stance, as those to which l have before al
| luded There pervades throughout the whole
| act an intention that vested rights and con-
! tract obligation shall be preserved and
fail to find in any of its provisions any re-
/ qu1rement upon the court to act otherwise
AS before suggested, there are special pro-
| visions for the protection Of dissenting cred
ltors, and there are cases as We have seen
! when these provisions may be badly incor-
! porated into the plan in the very language Of
| the statute, and no creditor could be heard
| to complain, but there is no Limitation upon
| the court in the manner and matter of the
plan which it must approve, save only that
OF reasonable discretion Nothing prevents
| the Insertion in such plan other of conditions
ard RI quiremert9 VIII CHI it may deem necas airy
and proper for their full protection under the
| law. TO ignore the vested rights Of dissent
! Ing creditors cannot be an excuse Of reason
| able discretion, and is as clearly inhibited
| as II it were expressly written into the law.
1t follows then that the act even as to
! prior assignments is not unconstitutional and
within proper limitations is applicable to
! them the same in other cases.
1t is not necessary at this stage of the pro-
| ceeding to determine definitely what these
! limitations are, what conditions may be i'm
| posed or what provisions inserted to protect
| dissenting creditors. Manifestly if the court
! should adjudicate their claims and direct
| payment in full, though a condition pre-
| cedent they would have no reason to COM
! plain. They would then cease to be creditors
and since all others are bound by the plan as
adopted the suit against stockholders must
| necessarily
course by way of illustration, and by no
| means intend to hold that this is the only
] solution. II dissenting creditors are satisfied
| of their claims they can ask no more They
| are entitled only to equal protection under
| the law with other creditors, and when they
| have been so protected and have secured all
| that can accrue to them from existing condi-
| tions they must be satisfied Whether an ad-
| Indication of their interests and the value
| thereof under the direction of the court NAV
be made or some other scheme less than full
| payment be OWNED may be considered and de-
| termined later In the proceeding. AS at pres
| ent advised the court holds that charter SO
| is not unconstitutional, nor is it impracticable
| upon the face of the papers before the court
| to apply the provisions thereof in insolvency
| proceedings pending at and prior to the time
| of its passage.
| have not overlooked the claims that chap
ter SO is repealed by chapter 1885, While 1t pre-
scribes certain conditions other than those
in the general banking law, which will au-
thorize an adjudication Of insolvency, one of
the main purposes Of this chapter 156 is to
supplement and bear out reorganization pros
ceedings of the kind now before us. ~
From what I have said it follows that the
motions TO dismiss must be and they are
hereby denied. +
At the close of the reading Of the
order the court, after some argument
with the attorneys and suggestions
from them, fixed next Saturday when
the main application to reopen will