The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-03-26
CUSTER REFUSED
Supreme Court Clears Wilson of
All Charges.
Opinion Covers FOrty-FOur
Typewriter Pages.
|CHALLISS REPORT IS UPHELD
Define His Duties in Relation
to InSOlvent Banks.
No WillfuI Misconduct ON Will
sons Part, Says Report.

The Kansas supreme court. in one
of the longest opinions ever handed
down by that body, today refused to
oust from office State Bank Commits
sioner Walter E. Wilson. against whom
custer proceedings were started at the
direction of Gov. Henry ]. Allen on
July 10. 1920. and who will retire
from office at the expiration OF his
term, April 1.
The opinion, written by Justice Ma
son, comprises "A closely written
pages and upholds the findings of
Commissioner ]. NJ. Challiss in all de-
tails Irregularities of a bank COM
missioner are held by the court to be
insufficient grounds for custer. Moth
| ing in the evidence produced by the
state warranted removal from office,
| the court held.
Duties of Bank Commissioner.
Possibly the most important feature
| of today's opinion SO far as it affects
| general banking conditions in this
state is the definition of the power
and duty of commissioner in his re-
| lations with an insolvent bank. This
question was interviewer in the testi-
mony produced in the hearing before
| Commissioner Challiss. The court in
passing on the Challiss report held
that it is not incumbent upon a bank
| commissioner to close the doors of an
| insolvent bank when, in his opinion,
to the creditors. Neither. the court
held. can a bank be deprived of ac-
cepting deposits so long as it's doors
lremain open.
| In the cases of failure of banks in
Salina, La Cygne and Coffeyville. the
| court held that Wilson acted within
his discretionary rights, even tho
subsequent events showed his judg-
ment at the particular time may have
been faulty. In the case of the La
1
held in detail. In the matter of the
failure of the Kansas State bank at
Salina, Wilson was held to have been
within his rights when he permitted
i the bank to continue business even tho
it may have been insolvent, but. in
the commissioners judgment, had a
good chance to meet its obligations.
No Wilful Misconduct.
| In the case of the Kansas Bank
Holding Corporation Wilson's relations
with the company were held not to
constitute wilful misconduct, such as
would call for his removal from office
In this case Wilson's custer had been
asked because he sat as a member of
the state board which granted the
company a charter. Wilson, at the
time, was declared to have been a
stockholder in the company.
i Discretionary power is given under
the opinion in the handling of loan
problems confronting state banks.
The court declares that where exces-
sive loans have been made the COM
| missioner may order them reduced
within the legal limit of sixty days.
This order, tho, docs not impose upon
him the absolute duty of seeing that
such reduction is made within that
time, but entrusts him with a consid-
cradle discretion in handling the mat
ter
In Interpretation of the word will
ful' the court held the word to imply
wrongful motive. Such wilful con-
duct was not shown in the case. The
court held that Wilson was within his
rights and duty in aiding and Coop
| Grating with a defaulting official in
, trying to raise money to pay his short
ages
No evidence proving wilful miscon-
/, duct by Wilson was shown in relation
: to issuance of certificates of deposit
; by the Sa1ina bank for less than their
face value. Neither was such miscon-
i, duct shown o the satisfaction of the
court when the Salina bank borrowed
, sums of money or issued and accepted
, drafts for which there was no money
or security in the bank. There was
, no evidence, the court held, to show
, Wilson was in any manner connected
: with such illegal acts nor that he
could have remedied them.
. The court declared that Wilson was
not required to advise the county at
.
a cials when he had provided the attor-
ney general with such information
Richard ]. Hopkins, as attorney gen.
eral, charged in his complaint tina,
Wilson violated his oath of office
iwhen he failed to lay evidence in the
Salina bank case before the county at
I torney. Evidence before the commits.
sioner showed all of this information
c. was in Hopkins's possession. The
supreme court holds Wilson's duty was
n substantially complied with when he
f gave this information to the attorney
a general.
No Corrupt Motive.
One paragraph of the supreme
: | courts syllabus is given over to the
I, action of the bank commission in vot
= ing to allow a charter to the Banl
. Holding Corporation. The court die
!. not attempt to enter into the affairs
= rights or limitations of the compan,
= bank holding companys charter anC
y Wilson's action, the court said:
Even in the absence of express
= legislative prohibition it is a grave i'm
= propriety and breach of officia
Ii obligation for a public officer to pas
judgment in a quasi-judicial capacit.
upon an important matter in which h
has a direct and substantially finan
cial interest. 1t is held. however, tina
in the circumstances here presented
the action of the state bank commits
sioner in granting the application of
corporation of which he was mem
Z Der for a permit to sell its stock wa
not influenced by the fact of such re
lation, was without actual corrupt mo
1t tive and did not. Of itself, constitute
l. such wilful misconduct. as to call 70
n his removal from office"
Is
,r Washineton March 26-James c