Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1908-10-28
.C|A|NSAR[PR
Judge Clark Holds That Buyers
ofForged Paper in Corwith
Bank Have Precedence
OTHER FUNDS IN TRUST
Majority of Thirty of Litisants in
standring DefaIcation Win Their
Cases in Court Preferred Claim
ants Will Secure Bulk of Assets Of
Failed Bank = The Courts Rulings.
cial to Times-Republican.

! ~
Mason City. Oct. 2s-The final decree
! in the case of the defunct Bank of Cor
/ with has been made by Judge Clark
and with this decree all the cases con-
nected with the bank are concluded
! This final decree disposes of a total
/ of about thirty claims aggregating over
$4,000. These claims were tried last
4 summer and have been under advise
ment by the court since that time. The
original number of claims against the
bank was over 300 and they aggregated
I over 100000. All but these last thir-
| ty were disposed of at Garner last
| summers and in most cases without
dispute They included no cases in
which there We're forgerieS. All those
complicated by forgeries are disposed
Of in this last decree and the thirty
cases in this final decree are the most
| complicated in law and fact and in
volve the most legal questions of the
entire 500 cases connected with the de-
funct bank.
In Three Glasses.
/, The claims against this bank are OF
three classes. The first class is that of
| trust fund creditors, the second of de-
positors and the third of general cred
| itors The thirty cases disposed Of in
this final decree We're largely of the
first class or of those who claimed to
be in the first class-that is, preferred
trust fund creditors.
Claims of Depositors.
First as to the claims of the deposit
tors Questions arose under the Iowa
laws which give depositors preference
o~er other creditors and the chief OF
e was, "Who are properly deposit
t,..s?" Some claimed that time cer-
titicates of deposit were loans and not
deposits. The supreme court has he'd
that this question is determined by
whether the main intention was to de-
post the money for safekeeping or to
accommodate the bank with a loan. Pc
culiar facts in this case made the der
els On difficult.
Trust Fund Creditors.
But more difficult and more compli-
Gated than the questions concerning
the certificates of deposit were those
concerning the trust fund creditors. and
who are properly trust fund creditors
and their rights and privileges Also
in this particular case what are their
rights as against depositors and other
creditors? In this particular case the
creditors who claim to be trust fund
creditors and ask for preference on
that score fall naturally into. three
classes.
The first of these three classes is the
held that when monies are left with
bank for special purposes, such as
the paying of debt, trust fund is
created in favor of the depositor and
the bank is required to keep this fund
separate from the other funds of the
bank Then if it should mix this fund
wrongfully with the other funds of the
bank and the bank should then go into
the hands of a receiver, such a trust
fund creditor has a preference and is
in this way preferred even over the
depositors. But in some of the claims
of this nature in this particular case
the parties did not pay in money but
merely drew their checks on funds
they had in the bank. Then the ques-
ton came, was the check the same as
if money had been paid into the bank?
This class Of claims were established
as preferred in the final decree.
Forged Notes.
The second class of creditors who
claimed preferment were those in
cases where Cashier Standring with
out the knowledge of the bank di-
rectors forged notes and mortgages
on farmers and others, then sold them
to banks and individuals and received
the money from the banks and indi-
viduals for the same. Were these cred
itors entitled to have their claims pre-
ferred? Here opinions differed widely
too because while the courts had gen.
orally held that money wrongfully
taken in that way is a trust fund and
that the banks are required to keep
such funds separate from other funds,
still they should not be preferred I'M
less they could be traced into the funds
in the hands of the receiver after the
bank became defunct. If they could be
SO traced and removed they should be
held as trust funds, otherwise not.
The court decided that such claims are
in this case entitled to be preferred.
Other Forgeries.
The third and final class of those
who claimed preference as trust fund
creditors were those who did so be-
cause of another class Of forgeries.
These cases were those where the
cashier had received money for forged
notes by draft from persons in large
Most children eat too much,