The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1919-10-31
TlTE SUPREME COURTRULES
That CLOSED BANK Is SOLVENT
LANCER and Aids declared Dsan. H.. and Costs
N' Paper Ruled Good-Bank Opens.

nevertheless, the action as taken by
the majority Of the state banking
board was illgal and unauthorized.
Even though it should be conceded
that the board did possess the power
to close the bank and appoint a re-
ceiver, nevertheless, the action as
tsken by the majority of the board
was unreasonable, arbitrary, unjust
and cannot be upheld"
ACTION is CONDEMNED
After commenting on the fact that
LANCER and Hall had sent state ex-
aminer Lofthus out of the state, the
opinoion said:
"The action of the respondents ir-
respective of the question of intent,
accompanied with widespread pub
licity and specific notice to other
banks of this state and their action
could not do otherwise than occasion
alarm and doubts in the minds of the
public and of depositors in the sound
ness of the banking institutions af-
fected, as well as IN all banking in
stitutions in the state. The acts of
the respondent as disclosed in this
record jeopardized the soivency of
the relator bank as we'll as other
banks.
There is no other manner in which
this procedure can be characterized
other than arbitrary and contrary to
both the spirit and the letter of the
law It both merits and receives the
condemnation of this court"
The court went into the records to
show that the bank had failed to
comply with any of the specific re
quirements of insolvency, and added:
ACTION HELD ILLEGAL
Illegal action of LANCER and Hall is
shown by the court in those two Of
| fciai's attitude toward the reserve
| of the Fargo bank. The court pointed
| out that the law demands that 30
| days notice shall be given to bank
| If it's reserve is found insufficient and
| that failure to raise the reserve after
due notice is punishable by hne
only, and not by closing Of the bank.
No notice or order had been given the
bank the court declared.
Another rebuke for LANCER and
Hall was contained in the courts
opinion relating to their statements
! that the list of loans in the bank
aggregated $4,000 which they as
sumed to be secured by insufficient
and improper collateral consisting
largely of farmers notes and post
dated checks. "The contention is
made that a post dated check is not
collateral, and that farmers notes
should not be estimated at over 5C
per cent of their value. To support
conclusion in this regard they have
! simply a hearsay statement that
large amount of such farmers paper
! did not pay out, or paid up poorly
This hearsay statement contained II
the record is denied by the persons
whom they state, were the authors
thereof. coon
"There is much evidence in the re
cord as well as in the report OF tht
state examiner that this farmers
paper is good collateral; that there
IS good margin of safety on the Sc
curity offered, and that uniformly
has naid out we'll in from rs per cen
to S5 Der cent. There is nelthe
reason nor justification for declaring
farn,rs' paper to be worth only 81
ner cent of it's value. There is M
more reason for declaring farmer
naner to be of certain percenCag
Of value than there is for declaring
LAWYERS, doctors or merchants p;ape
To be of a certain percentage value'
The court found post dated check
acceptable and good security, upsel
ting Langers' contentlon'