The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1898-09-17
is STILL IINIHPUGNED
JUDGE KELLY,s DECLARATION
AS TO ROBERT A. SMITHS
Honesty
MEANS FIVE PER CENT MORE
Every DeDOsltOr I'm the Bank of
Minnesota Is Reneated by the De-
cisiOn, Which Enables the Re-
cciVers to Declare Another Div
idend--Bank Was Not Given an
Unlawful Preference.

Judge Kelly yesterday filed decision
in the case of Charles T. Miller, as
| assignee Of Robert A Smith, insolvent,
against the Bank Of Minnesota, and w.
II. Lightner and r. A. Seymour as re-
celvers OF the bank
The court as a conclusion of facts,
the case having been submitted after
hearing on briefs. finds:
First-That all the allegations of fact and
all the admissions of fact contained In the
answer Of the receivers are true.
Second-That the allegations of fact con-
tanned in the plaintiffs complaint except
such as are admitted to be true by the an
swer of said receivers, have not been proved
to my satisfaction and are not true.
AS a conclusion of law 1t is determine
ed that the defendants have Judgment
against the plaintiff, that the plaintiff
take nothing by his complaint, and for
their costs and disbursements.
In the memorandum accompanying
the decision Judge Kelly says:
This action Is to set aside as fraudulent
under the insolvency laws of Minnesota a
payment of $4,000, made Jan. 8. 1897 and
a mortgage delivered Jan. o. 1897 to de-
PENDANT receivers by Robert A. Smith to
pay in part and secure the balance of a debt
then owing by said Smith to the Bank of
Minnesota.
The bank failed Dec. o. 1896, and Mr.
Smith indebted to the bank in over
$4,000, evidenced by demand paper. He
made the payments and gave the security
attached voluntarily.
Plaintiff, to succeed, must prove o. that
Mr.. Smith was insolvent at the time OF The
alleged preference; ~ that Mr.. Smith in
tended to make a preference fraudulent in
law, and 81 that the receivers Of the bank,
when accepting the payment and NOR gage
had reasonable ground to believe Mr.. Smith
was insolvent
I am not satisfied that the plaintiff proved
Mr.. Smith insolvent either date, though
upon a technical definition Of insolvency"
there may be some doubt on this point The
testimony tended strongly to show his assets
were ample to more than pay all his ia
bilities. 1t appeared conelusively that until
after Jan. %, 1897, he had met in a way
satisfactory to his creditors every demand.
That up to then his credit was good; that
practically his entire personal debt, except
this debt to the bank. was amply secured.
That the only trouble that met him was
from creditors of other persons for whom he
had Endorsed; and that all this Endorsed pa
per, with the exception of the Dawsons', was
otherwise good; and, although he was com
PEELED to assign on March %, 1897, am still
of the opinion that plaintiff failed to prove
his insolvency in January.
Mr.. Smith is not the only honest man who
in those time of unusual financial straights,
though really solvent, was forced into in
solvency by the mistakes OF others. His real
difficulty began after his payment to the
bank. nc. =. a.
AS to the second proposition, whatever the
fact OF his solvency or insolvency at the
time I am thoroughly satisfied MIR. Smith d
not intend to give the bank an unlawful
preference.
True, every one must be held to intend the
consequences of his deliberate acts, and this
payment. like every payment, In a certain
sense, preferring the bank to others.
But it such preference as the law
forbids? 1t was not.
Mr.. Smith at the time honestly believed
himself solvent 1t is only when debtor
knows he Is insolvent and with that kpOwl-
cd preference n
other, that the law conclusively presumes
such preference fraudulent
Counsel insists that Mr.. Smiths speaking
of the debt to the bank as debt of honor"
shows his intention was improper. L think
he is mistaken. Although not In the active
management of the bank FOR years. MI smith
was it's vice president. p
Much public criticism made at the
time at the large indebtedness Of some bank
officers to their institutions. The test mony
shows that Mr. Smith did not become a DEBT
or to this bank until early in 1896, and that
he then had in treaty the same sale OF r. al
estate which was made in January, 1871
and the net proceeds OF Whlch were pald to
the receivers.
It is fairly inferrable from this that when
Mr. Smith first became indebted to the bank
he then intended to meet it from this sale,
and that is why he called 1t debt OF honor.
Upon the third proposition the plain if-
fails utterly He was enable TO bring TO the
knowledge OF either receiver any act whica
should put a reasonably prudent man upon
inquiry as to Mr.. Smiths financial condition.
Indeed, outside the fact that the times
were panicky and suspicion might well at
tach TO any person. from what appears in
evidence these receivers knew nothing upon
which to base reasonable suspicion OF Mr..
Smiths solvency.
He acted as a solvent and honest man.
They had no reason to believe him other
wise.
The $35, 900 which is now In the hands
of the receivers and which has been
held awaiting the decision in the case,
together with other amounts, makes
another per cent dividend to the cred
itnrc nf tho ha nix nOSSiAhln