Evening capital news. (Boise, Idaho) 1901-1927, 1912-12-15

eral. No limit was fixed. no amount
set upon. Any and all amounts that
would satisfy him and protect his
companyts bond were allowed him. He
was given the run of the vault and
told that he could take any amount OF
the banks best securities to protect
his company on bond given for $780,
900 on the state deposits in the banks
care.
But Judge Frank S. Dietrich, inca de-
eision handed down from the federal
court Yesterday, held that meeting of
the board Of directors Illegal and Its
actions void lie invalidated their
actions ordered the return OF the se-
curities, and declared that the in
terests Of the depositors We're first
to be protected before even those of
the bonding company.
Demanded Securities Return.
The case Went into the federal court
upon tho demand of y w. Platt, as
receiver. for the return of the securi-
ties held by the Globe company. The
court went over the transactions OF
the board, showed where only the pres
ident, Edward Payne, and two of his
employees who happened to be direc-
tors, Keefe and Way, We're present
He called attention 10 the fact that
no records were kept, no minutes were
made, no limit was fixed, no amount
determined but that l.. A. Coate, as
agent Of the bonding company, was
given the run of the vault and told TO
take whatever amount Of securities he
needed to protect himself and his
concern.
No part of the statute or bylaws
Of the bank was met when the three
directors went into session. The laws
require publication or notice of some
kind before Il meeting can be called.
No such notice was given. Two #
the directors, Pence and Polk, never
knew any meeting had been called I'M
til after the deal had gone through
and the banks securities had been
given into the surety company's
hands.
As soon as coate discovered that the
bank was borrowing money from the
Idaho Trust q Savings bank and had
made loan Of $1,000 and given col
lateral as security, he demanded that
his company be given the same pro-
lection As Payne understood 1t, un-
less JlllS GJ4AlditIdl was s7iNNilt A-tN
company would not continue the bond
and the deposits of the state would
not be protected,
Company Exceeded Rights.
The court holds that after the pre-
MUM of sl25 had been paid and the
bank had been bound to the state, the
company had no right whatever 70 de-
mand security for its risk and that all
Of the banks obligations had been
discharged The court thinks that
even IL Payne did believe the conf
pany would terminate the bond II the
collateral was not given. there Is no
reason 70 suppose that il could not
have done SO a. well even after it
had the security If II gave the re-
CURED 30 days notice.
The court says: TO sumnar
ze upon this branch of the de-
fense. there are wanting the
essential elements Of legal ac-
aaiescenoe; there is no evidence
that the bank received or re-
tanned any benefit: or that the
defendant assumed any rev OBJ
ieation, by reason of receiving
the collateral, and there was no
consideration for the delivery of
the same; there is no presunap-
ton Of evidence that tho defend
ant would have withdrawn the
bond If its request had been de-
MED, or that. by reason of its re-
lance upon the collateral, il act
ed or withheld action to its pre-
JUDGE"
Speaking Of the meeting, the court
IaYS ttSdn1jtter1y no formal notice