Larabee v. Dolley, 8,810

CourtUnited States District Courts. 10th Circuit. United States District Courts. 10th Circuit. District of Kansas
Citation175 F. 365
Docket Number8,810,8,816,8,817.
Decision Date23 December 1909

[Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted]

Chester I. Long, J. W. Gleed, John L. Hunt, B. P. Waggener, and John L. Webster, for complainants.

F. S. Jackson, A. C. Mitchell, and G. H. Buckman, for defendants.

POLLOCK District Judge.

Separate bills of complaint have been presented in the above entitled and numbered cases, calling in question the constitutional validity of an act of the Legislature of this state (chapter 61 Laws of 1909), commonly known as the 'Bank Guaranty Law' of the state. By that act it is provided as follows:

'An act providing for the security of depositors in the incorporated banks of Kansas, creating the bank depositors' guaranty fund of the state of Kansas, and providing regulations therefor, and penalties for the violation thereof.
'Be it enacted by the Legislature of the state of Kansas:
'Section 1. Any incorporated state bank doing business in this state under the general banking laws of Kansas, having a paid-up and unimpaired surplus fund equal to ten per cent of its capital, and any bank which may after the passage of this act be authorized to do business in this state, and which shall have been actively engaged in the business of banking for at least one year, and having such surplus fund, is hereby authorized and empowered to participate in the assessments and benefits and to be governed by the regulations of the bank depositors' guaranty fund of the state of Kansas hereinafter provided for; provided, that the limitation of one year shall not prevent such participation by a new bank at any time in any city or town in which all banks shall have neglected or failed to become guaranteed banks under the provisions of this act for a period of six months after the taking effect of this act. Before any bank shall become a guaranteed bank within the meaning of this act a resolution of its board of directors, authorized by its stockholders, duly certified by its president and secretary, asking therefor, in form to be provided

by the bank commissioners, shall be filed with said bank commissioner, who shall, upon the filing of such resolution, make a rigid examination of the affairs of such bank, and if it is found to be solvent, to be properly managed and conducting its business in strict accordance with the banking law, he shall, after the bank shall have deposited with the state treasurer bonds or money as hereinafter provided, issue to such bank a certificate stating in substance that said bank has complied with the provisions of this act, and that its depositors are guaranteed by the bank depositors' guaranty fund of the state of Kansas, as herein provided.

'Sec. 2. Before receiving such certificate from the bank commissioner, each bank entitled to the same according to section 1 of this act shall, as an evidence of good faith, deposit, and shall at all times maintain with the state treasurer (subject to the order of the bank commissioner when countersigned by the auditor of state) United States bonds, Kansas state bonds, or the bonds of any county, township, school district, board of education or city within the state of Kansas, to the amount of five hundred dollars for every one hundred thousand dollars or fraction thereof of its average deposits eligible to guaranty (less its capital and surplus) as shown by its last four published statements; provided, that each bank shall so deposit not less than five hundred dollars, and the state treasurer shall issue his receipt therefor in triplicate, one to the bank, one to the auditor of state, and one to the bank commissioner. Such bonds only shall be accepted as the school fund commissioners of the state of Kansas are permitted to buy, and shall bear the certificate of the attorney general of the state of Kansas stating that in his opinion said bonds have been legally issued. Said bonds, or cash in lieu thereof, shall not be charged out of the assets of the bank, except as hereinafter provided, but shall be carried in its assets under a heading 'Guaranty Fund with State Treasurer' until such time as said bank shall default in payment of assessments hereinafter provided for. In lieu of bonds the bank, at its option, may deposit money, which deposits shall be exchangeable for acceptable bonds when the bank elects to make the substitution. In addition to above each bank shall pay in cash an amount equal to one-twentieth of one per cent of its average deposits eligible to guaranty, less its capital and surplus, and the same shall be credited to the bank depositors' guaranty fund with the state treasurer subject to the order of the bank commissioner, and the state treasurer shall issue his receipt therefor in triplicate, one to the bank, one to the auditor of state, and one to the bank commissioner; provided, that the minimum assessment to be required from any bank shall be twenty dollars; provided further, that any bank seeking to participate in the assessments and benefits of this act after the first annual assessment for the year 1910 shall have been made, shall be assessed an amount approximately equal to its proportionate share of the money then in the bank depositors' guaranty fund after all losses shall have been deducted, the amount of such assessment to be determined by the bank commissioner. The last above mentioned assessment, however, shall not be required of new banks formed by the reorganization or consolidation of banks which have previously complied with the terms of this act. Upon the deposit and acceptance of such bonds (or money) and the payment of said assessment, then the payment of such deposits of said bank as are specified in this act shall be guaranteed as herein provided, and the bank entitled to its certificate.

'Sec. 3. The bank commissioner shall, during the month of January of each year, make assessments of one-twentieth of one per cent of the average guaranteed deposits, less capital and surplus, of each bank (the minimum assessment in any case to be twenty dollars) until the cash fund accumulated and placed to the credit of the bank depositors' guaranty fund shall be approximately five hundred thousand dollars over and above the cash deposited in lieu of bonds, when he shall discontinue such assessments. Should such fund become depleted the bank commissioner shall make such additional assessments from time to time as may become necessary to maintain the same; provided, that not more than five such assessments of one-twentieth of one per cent each shall be made in any one calendar year. The treasurer of the state of Kansas shall hold this fund in the state depository banks as provided by law governing other state funds, subject to the order of the bank commissioner, to be countersigned by the auditor of state, for the payment of depositors of failed guaranteed banks, as hereinafter provided.

The state treasurer shall credit this fund quarterly with its proportionate share of interest received from state funds, computed at the minimum rate of interest provided by law, upon the average daily balance of said fund.

'Sec 4. When any bank shall be found to be insolvent by the bank commissioner he shall take charge of such bank, as provided by law, and proceed to wind up its affairs; and he shall, at the earliest moment, issue to each depositor a certificate, upon proof of claim, bearing six per cent interest per annum, upon which dividends shall be entered when paid, except where a contract rate exists on the deposit, in which case the certificate shall bear interest at the contract rate; notice of the amount of each dividend to be paid creditors and the date when such payment is to be made shall be published in two consecutive issues of a paper of general circulation in the county or city in which such failed bank is located, and a corresponding notice posted on the door of the receiver's office, and interest shall cease on each dividend on the day named in such notice. The bank commissioner shall likewise publish a notice of the date upon which he will make payments of any balance due on such proof of claim, and interest shall cease on the day so advertised, and said proof of claim shall so state. After the officer in charge of the bank shall have realized upon the assets of such bank and exhausted the double liability of its stockholders, and shall have paid all funds so collected in dividends to the depositors, he shall certify all balances due on guaranteed deposits (if any exist) to the bank commissioner, who shall then, upon his approval of such certification, draw checks upon the state treasurer, to be countersigned by the auditor of state, payable out of the bank depositors' guaranty fund, in favor of each depositor for the balance due on such proof of claim as hereinafter provided. If at any time the available funds in the bank depositors' guaranty fund shall not be sufficient to pay all guaranteed deposits of any failed bank, the five assessments herein provided for having been made, the bank commissioner shall pay depositors pro rata and the remainder shall be paid when the next assessment is available; provided, however, that whenever the bank commissioner shall have paid any dividend to the depositors of any failed bank out of the bank depositors' guaranty fund, then all claims and rights of action of such depositors so paid shall revert to the bank commissioner for the benefit of said bank depositors' guaranty fund, until said fund shall have been fully reimbursed for payments made on...

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  • Tyler v. Dane County, Wis.
    • United States
    • U.S. District Court — Western District of Wisconsin
    • May 28, 1923
    ...also between the state and the shareholders. This is settled law. Wilmington Railroad v. Reid, 13 Wall. 264, 20 L.Ed. 568; Larabee v. Dolley (C.C.) 175 F. 365, p. 390; Garey v. Mining Co., 32 Utah, 497, 91 P. 369, L.R.A. (N.S.) 554; Cook on Corporations (3d Ed.) Secs. 492 to 496, inclusive.......
  • Wegner v. First National Bank of Casselton
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    • June 17, 1919
    ...Davis v. Elmira Sav. Bank, 161 U.S. 275, 40 L.Ed. 700; Easton v. Iowa 188 U.S. 220, 47 L.Ed. 452. To the same effect see Larabee v. Dolley, 175 F. 365; Elizabethtown First Nat. Bank v. Com. 143 Ky. 816, 137 S.W. 518; Nat. Bank v. Pennsylvania Fuel Co. 215 Pa. 115, 64 A. 374; Green v. Bennet......
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    • United States
    • Mississippi Supreme Court
    • May 6, 1929
    ...Brewing Co. v. McGillivray, 104 F. 258; Grainger v. Douglas Park Jockey Club (C. C. A. 6), 148 F. 513, 8 A. & E. Cases, 997; Larabee v. Dolley, 175 F. 365; Moore Otis (C. C. A. 8), 275 F. 747; Savage v. Jones, 225 U.S. 501, 56 L.Ed. 1182; Clark v. Poor, 274 U.S. 554, 71 L.Ed. 1199; State v.......
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    • United States
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    • January 16, 1911
    ...burden, or subjects the resources of the bank to any considerable risk. In this connection a further and fuller reference may be had to Larabee v. Dolley, before cited. That case a bill in equity, brought to test the validity of a Kansas statute which provided for the creation of a "bank de......
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