The Redwood gazette. [volume] (Redwood Falls, Minn.) 1873-1940, 1926-10-06
SUPREME COURT
GIVES OPINION in
BANK CASE HERE
IMPORTANT DECISION MADE IN
FAVOR OF RECEIVER FOR
FIRST STATE BANK OF WAL
NUT GROVE

The Supreme Court of Minnesota
last week handed down decision of
the utmost Importance to banks and
bankers as well as to private citizens.
This decision was in answer to the
appeal made in the case of A ]. Veig-
ell, Commissioner of Banks as Receiv-
er of the First State Bank of Walnut
Grove as plaintiff with E. E. Con-
verse and other defendants as appell-
ants. The defendants in the case
were bondsmen in the First State
Bank of Walnut Grove for county
funds en- deposit there. They paid
the amount of their secured obliga-
tion and later attempted to use the
amount thus paid to offset their per-
sonal obligations in the closed bank
The decision handed down last week
practically reverses the decision of
two former and similar cases in the
Supreme Court. However, it follows
the decision in the United State Su-
preme Court. The syllabus of that
opinion is; Debtors to an insolvent
bank cannot, when sued by the re-
ceiver, offset moneys paid by them
after the insolvency as sureties on
bond of the bank given to secure the
repayment of deposits"
In the opinion the facts of the
case are set forth in the two following
"Two actions by the Commissioner
of Banks, as receiver of the First
State Bank of Walnut Grove, to re-
cover from defendants on their joint
and several obligations acquired by
the bank before its insolvency. One
of the cases, (25548), is on a written
guaranty of several notes owned by
the bank. They were recited by the
guaranty to be Of questionable val
ue" and are now said to be worth
less. Without going into details, we
assume that the obligations in ques-
tion, although in terms of guaranty,
may now be considered primary liza
bility of defendants. The other ac-
tion, (25547), is on promissory note
of defendants executed and delivered
to the bank in order to make good i'm
paired assets and for no other pur-
pose. The appeals are from orders
sustaining demurrers to supplemental
answers, one in each case. The only
point now for consideration is wheth-
er the defendants are entitled to the
equitable set-off, the right to which
was asserted by the supplemental ans
wers.
"The attempted set-off is that of
substantial amounts paid by several
of the defendants in each case,- af-
ter the insolvency, to make good their
liability as sureties on depository
bond required of the banks as a con-
dition precedent to the deposit therein
of the public moneys of the County
of Redwood. Other set-offs are claim
ed but the only one the right to which
is seriously urged upon these appeals
is Of the moneys paid to the county
under the depository bond."
After citing number of cases in
point the opinion closes by saying:
at is clear that, unlike the recip-
rocal claims between a bank and a
depositor who is also it's debtor on
ordinary commercial paper, there is
absent from the claims now under
consideration that degree Of mutuality
ordinarily requisite to an equitable
set-off. They arise out of transae-
tions which are not only independent
Continued on page twelve)