State ex rel. Lemke v. District Court of Stutsman County

• Decision Date: 30 December 1921
• Citation: State ex rel. Lemke v. District Court of Stutsman County, 49 N.D. 27, 186 N.W. 381 (N.D. 1921)
• Court: North Dakota Supreme Court

186 N.W. 381

49 N.D. 27

STATE EX REL. LEMKE, Attorney General, v. DISTRICT COURT OF STUTSMAN COUNTY et al. YAEGER et al. v. FRAZIER et al

Supreme Court of North Dakota

December 30, 1921

Application by the state, on relation of Wm. Lemke, Attorney General, for an appropriate writ to review and reverse an order issued by the District Court of Stutsman County, J. A Coffey, Judge, in an action by Jacob Yaeger and others against Lynn J. Frazier and others, which among other things restrained the state treasurer from depositing state funds and the funds of state institutions in the Bank of North Dakota. Writ granted.

Writ issued and order set aside.

Wm Lemke, Attorney General in pro. per.

Ormsby McHarg and Oscar J. Seiler, for respondents.

CHRISTIANSON J. BIRDZELL and BRONSON, JJ., concur. GRACE, Ch. J. (concurring specially). ROBINSON, J. (dissenting).

OPINION

CHRISTIANSON, J.

On October 18, 1921, Jacob Yaeger and fifteen other taxpayers instituted an action in the district court of Stutsman county against a number of state officers, including the governor, the attorney general, the state treasurer, the secretary of state, and the state auditor. The complaint is very lengthy, and charges, among other things, that the Bank of North Dakota has never been legally organized; that it is insolvent; that the state treasurer has deposited moneys which have come into his hands in the bank, and will continue to do so unless restrained from so doing. The principal object of the action, as set forth in the prayer for judgment, is:

"That each and every one of the defendants above named be restrained and enjoined during the pendency of this action or until the further order of this court from depositing any funds belonging to the state of North Dakota, or of any political subdivision thereof, or belonging to any educational institution, and particularly any part of the state school fund in the so-called the Bank of North Dakota.

"That the Bank of North Dakota through its operators, managers and controllers, particularly the defendants Frazier, Lemke, Hagan and Cathro, be enjoined and restrained from accepting or receiving for the purpose of deposit any funds from any source, public or private, until the further order of this court.

"That D. C. Poindexter, as auditor of the state of North Dakota, . . . be restrained and enjoined from depositing any funds coming into his possession as the auditor of the state of North Dakota in the Bank of North Dakota until the further order of this court.

"That John Steen, as treasurer of the state of North Dakota, be restrained and enjoined, until the further order of this court, from mixing and confusing funds, arising from the lands and moneys received from the government of the United States or from other sources declared by the Constitution of the state to be trust funds, with other funds of the state; and particularly that he be restrained and enjoined from depositing any of such funds upon which the said trust is imposed, or any other funds coming into his possession as state treasurer in the Bank of North Dakota until the further order of this court.

"That the Bank of North Dakota be enjoined and restrained during the pendency of this action and by the final judgment to be rendered herein, from representing itself as a bank and a proper depositary of funds as a bank or from representing itself as a corporation.

"That the Bank of North Dakota be adjudged to be insolvent, and thereby unfit to be the depositary of any public funds by reason of its insolvency and inability to pay back funds and moneys deposited with it by banks, public officials having control of the safe-keeping of state funds, and the funds of state penal, educational, and industrial institutions."

Upon this complaint, and upon affidavits of one of the plaintiffs and one of their attorneys, Honorable J. A. Coffey, one of the judges of the fourth judicial district, issued an order returnable before said district court at Jamestown, in Stutsman county at 10 o'clock A. M., November 3, 1921, citing the defendants to show cause at that time and place why they should not be restrained during the pendency of the action from in any manner doing any of the things against the doing of which a permanent injunction is asked for in the action. And in such order it was further provided that--

During the pendency of the action, the "defendants, and each and all of them, individually and officially, be, and they are hereby, restrained and enjoined in the following respects:

"(1) That each and every one of the defendants above named be, and is hereby, restrained and enjoined during the pendency of this action or until the further order of this court from depositing any funds belonging to the state of North Dakota, or of any political subdivision thereof, or belonging to any educational institution, and particularly any part of the state school fund in the so-called Bank of North Dakota.

"(2) That the Bank of North Dakota, through its operators, managers, and controllers, particularly the defendants Frazier, Lemke, Hagan, and Cathro, be, and is hereby, enjoined and restrained, during the pendency of this action or until the further order of this court, from accepting or receiving for the purpose of deposit any funds from any source, public or private.

"(3) That Lynn J. Frazier as governor, Thomas Hall as secretary of state, John Steen as treasurer, and D. C. Poindexter as auditor of the state of North Dakota be, and they are hereby, restrained and enjoined, during the pendency of this action and until the further order of this court, from preparing for issue, signing, sealing, and indorsing any bond or bonds upon property of state owned utilities, enterprises, or industries.

"(4) That D. C. Poindexter as auditor of the state of North Dakota be, and he is hereby restrained and enjoined, during the pendency of this action or until the further order of this court, from auditing any accounts or paying the same, or recommending the same for payment, other than for the legitimate operating expenses of the state of North Dakota, and that he be, and is hereby, restrained and enjoined during the pendency of this action, or until the further order of this court, from depositing any funds coming into his possession as the auditor of the state of North Dakota in the Bank of North Dakota.

"(5) That John Steen as treasurer of the state of North Dakota be, and is hereby, restrained, during the pendency of this action or until the further order of this court, from mixing and confusing funds arising from the lands and moneys received from the government of the United States, or from any other sources declared by the Constitution of the state to be trust funds, with other funds of the state, and particularly from depositing any of such funds upon which the said trust is imposed, or any other funds coming into his possession as State Treasurer in the Bank of North Dakota. . . .

"(10) That each and every one of the defendants above named, their servants, deputies, attorneys, agents, and employees, and each of them, be, and they are hereby, restrained and enjoined, during the pendency of this action or until the further order of this court from in any manner performing any of the acts complained of in this complaint, which have been described as resulting in irreparable injuries to the plaintiffs and all other taxpayers in the state if permitted to be performed. . . .

"(12) That the Bank of North Dakota be and it is hereby enjoined and restrained, during the pendency of this action or until the further order of this court, from representing itself as a bank and a proper depositary of funds as a bank, or from representing itself as a corporation.

"(13) That the Bank of North Dakota be, and it is hereby, adjudged to be insolvent, and thereby unfit to be the depositary of any public funds by reason of its insolvency and inability to pay back funds and moneys deposited with it by banks, public officials having control of the safe-keeping of state funds, and the funds of state penal, educational, and industrial institutions, pending this action or until the further order of the court."

On the 20th day of October, 1921, the attorney general made an application to this court for relief against the order issued by Judge Coffey and asked that this court issue an appropriate writ in the matter. The attorney general's application was supported among others, by the affidavits of himself, the state treasurer, and the Manager of the Bank of North Dakota. In his affidavit the state treasurer says that

"He has been advised by the attorney general of the state of North Dakota that the only legal depositary for the funds of the state is the Bank of North Dakota, and that, as state treasurer, he has deposited all funds up to the present time coming into his possession as state treasurer in the Bank of North Dakota. That the funds coming into the office of the state treasurer amount to from $ 25,000 to $ 50,000 a day. That a copy of the restraining order of the court in the above entitled action has been served upon him, restraining him from depositing any more funds in the Bank of North Dakota; and that unless such order is annulled and vacated, or some other depositary designated, it will greatly hamper the work of his department, and, that he has no place where to deposit such funds when they come in; and that in many cases checks coming to his department should be promptly cashed, otherwise loss may be sustained upon them."

Also that

"Owing to the fact that he does not know where to deposit said funds, the work in his department is greatly hampered and delayed and will accumulate very rapidly, unless some relief is given."

In his...