The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1923-12-29
CAN'T FORCE
PRIORITY OF
BANKPAYMENTS
judge Pugh Decides Against
Depositors Seeking to Force
Payments of Deposits
FUND NOT\ SUEABLE
Question was Whether De.
pOsitGrs We're to be Paid in
Order of Bank ClOsings
FUND NOT, SUEABLE

Dickinson, N D., Dec. 29.-The
Guaranty Fund Commission is part
Of the executive plan of the state and,
as such, is not sueable by depositors
seeking to determine priority Of pay
ment Of depositors in closed banks of
the state, Judge Thomas Pugh of dis
trict court has decided here in sus-
tanning a demurrer to the suit
brought by G. A. Wirtz depOsitol
of the Security State bank of New
England The case was argued at
Mandan recently.
Writ, suing on behalf Of himself
and other depositors, claimed that
closed bank depositors should be paid
by the Guaranty Fund Commission
in the order of the closing Of the
banks
The Guaranty Fund Commission
had taken the position that when the
fund was not sufficient to pay all de-
positors, it should be prorated among
the depostors of all banks closed at
the time distribution Of the fund
was made. In the suit, however, at
torneys maintained that the question
was not at issue because the Guar
anty Fund Commission was not sue
able.
Because of the difference Of inter-
probation of the law no dividend has
been paid by the Guaranty Fund
Commission since bank closings be
gar il November, 1920. The Wirtz
case, presumably, will 60 to the su
prcme court for final decision before
'any action is taken by the Guaranty
Fund Commission.
The new Guaranty Fund law en-
acted by the 1923 Legislature provid-
ed specifically that after July l, 1923,
dcpositors of all closed banks should
he paid on a pro-rata basis when a
distribution o. the fund was made
providing the fund was not large
enough to reimburse all in full
Attorneys, it is known, have diff
fcred as to Interpretation of the law
prior to July I. The majority have
held it is understood that depositors
of those closed banks should be paid
in full in order of the closing of the
state banks.
Judge Pugh, in his decision, how
ever. declares the matter is within
the discretion of the commission
with the commission bound of course
by the laws governing it. Numer-
Gus suits have been instituted by de-
nositors of closed banks in an en-
deavor to force payment of depos.-
tors in the order Of the closing. Un-
der the decision these suits may not
hc maintained.
Part Of Executive Plan,
The decision which further hcld
That the Guaranty Fund Commission
j. part Of the executive plan OIL
the state and could not be sued, fol-
lows.
"The demurrer in this case is sus-
tained as to the complaint upon the
grounds amongst others that the
Guaranty Fund Commission is part
Of the executive plan of the state;
that the fund known as the Deposl-
tors Guaranty fund is a fund in
which the state has an interest to
the extent at least that said fund be
applied according to and in the full
fillment of the purpose of the law
creating it; that the determination
Of the rights of claimants as to the
status of having their claims against
failed bank declared to be guaran-
teed under the law has been by the
legislature entrusted solely to the
Commission under the 1923 law and
to the Commission and the bank ex-
miner Aunder the 1917 law. and the
legislature has wholly, and unques-
tionably designedly, refrained from
providing for suit against the Com
mission upon this class of claims or
from an appeal from the decisions
of the Commission upon this case
of claims. The general design and
purpose of the law in :. my opinion
would be subverted and destroyed if
the thousands of depositors of failed
hanks in this state were given the
right to maintain actions in the
courts against the commission for
the purpose of having their claims
as depositors against the fund de-
termined"
CHvYT TIIADDTNN