The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-06-10
Kansas Supreme Court Makes
New Ruling Affecting Banks.
Stockholders Can Be Assessed
for Additional 100 Per Cent.
OPINION BY JUSTICE JOHNSTON
Court Held in Former Opinion
Law Was Unconstitutional.
Case Originally Came From
Saline District Court.

The Kansas supreme court reversed
its former opinion in the double LA
bility case affecting bank stockholders
when il today ruled that such securl-
ties could be levied for an additional
100 per cent of their face value The
opinion was written by Chief Justice
Johnston. It IS a reversal Of the Sa-
line county district court and recent
opinion oy the state supreme court
In an opinion rendered several
months ago the supreme court held
that the double liability act was un-
constitutional. It decided at that time
that holders of bank stock were placed
in "a special class and could not pc
made responsible for losses beyond the
value OF their securities. On an ap-
pIication for rehearing the court re-
opened the case and in May heard fur
then arguments. The decision today IS
a reversal of the former order and IS
approved by the entire court
Defines Right of Legislature.
Under its former decision, the court
had declared double liability act in
valid by virtue of an amendment 10
the state constitution in 1906 The
court in its decision today defines the
rig-.t of the legislature TO fix a spe-
cial class liability. 1t says in part;
was to tie the hands OF the legislature
for the future and no matter what
the welfare Of the state might demand
prohibit the legislature from imposing
greater liability on holders of banh
stock and some other kinds of cor
porate stock than would exist without
constitution or statute. express words
to that effect were manifestly avoided
The proposed restriction must be de-
rived by impiicat ton only ana unIess
the understanding of constitutional
provisions which has prevailed during
the greater part of the states history
is to be disregarded. the implication Is
forbidden. The result is that how
ever the subject may be approached,
the statute imposing double liability
on holders of bank stock is constitu-
tional and valid. and the judgment
Of the district should be reversed
The double liability case came be
fore the supreme court on an appeal
from the saline county district court.
There A. W. Laughlin. had resisted
payment of the same for double the
value of his stock in the defunct
Kansas state bank. failed several years
ago as a result of the Felix BrOeker
operations in Salina-
Victory for Guaranty Fund.
The decision in the double liability
ease was declared by members of the
state bank commissioners staff as
decided victory for the state bank
guaranty fund. Application of the
double liability viii save levying OF
enormous sums against the fund, ac-
bank commissioner.
This opinion means hundreds of
thousands of dollars to the state bank
guaranty fund" said Sanden. More
than that it means greater stability for
stale banks Instead of fOrfeitinS
their stock when bank encounters
trouble, stockholders will willingly
meet assessments rather than permit
closing of an institution and payment
Of the double liza bility. I believe the
decision will have a great effect in
Establishing confidence in the state
banks of Kansas and will also do much
to make the stockholders and directors
more alert and watchful in manage
ment of the institutions"
Bad Check Law Upheld.
The supreme court today upheld the
validity Of the criminal section Of the
worthless check act 1t held that the
check Of current date, but affects the
givcr Of a pOst-dated check
The decision was rendered in the
appeal of Frank Avery from the Paw
nee county district court. The lower
court was reversed in part and af-
frmed in part. The court held that
the act was valid as a precaution
against mischief in trade. check kit
ing and infringements in commerce
and banking which circulation of
worthless checks infIicts. Intent to
defraud and accOmp plishment of fraud
are not elements of the offense, it is
declared ana are not essential TO va
lidity of the act It also is held that
the statute does not sanction impris-
Onment for debt nor the compOunding
OF felony. All the elements of the
offense being present makers of bad
checks are declared to have no relief
from punishment by virtue of the IA ct
that they may have told payees when
checks were issued, that there were no
funds to meet them. This is the first
decision covering the criminal section
Of the bad check act. 1t was written
by Justice Burch.