State v. Bank of New England
| Decision Date | 27 October 1893 |
| Docket Number | No. 8409.,8409. |
| Citation | 55 Minn. 139 |
| Parties | STATE OF MINNESOTA <I>vs.</I> BANK OF NEW ENGLAND. |
| Court | Minnesota Supreme Court |
The defendant, the Bank of New England was a corporation having banking powers. It was organized in December, 1891, under 1878 G. S. ch. 33, and was located and doing business in the Guaranty Loan Building at Minneapolis. Its capital was $100,000. The State Treasurer deposited public funds in this Bank under 1878 G. S. ch. 6, § 37, as amended. The Bank became insolvent and unable to pay on demand checks, drafts and orders drawn upon it in the due course of business. On June 24, 1893, it closed its doors and suspended payment. It was indebted to the State $61,331.15, and to other creditors large sums of money. It owned and had possession of promissory notes, choses in action and property worth over $100,000. On July 6, 1893, the Attorney General commenced this action in the name and on behalf of the State, under 1878 G. S. ch. 76. In the complaint these facts were stated and the prayer was, that the Bank be adjudged insolvent and that an injunction issue restraining it from exercising corporate rights and from collecting its assets or paying out or transferring any of its money or property and that a receiver be appointed to take charge of all the property of the corporation and collect and convert it into money and that the State have such other and further relief as to the Court might seem just. On that day an order was obtained from a Judge of the District Court directing the defendant to show cause if any there was, before the Court on July 15, 1893, why it and its officers should not be thus restrained pending the action and why a receiver should not be appointed at once to take charge of its property and effects. The complaint and a summons in the action and a copy of said order were served by the Sheriff on July 6, 1893, at one o'clock in the afternoon upon Alden J. Blethen, President, F. M. Morgan, Cashier, and L. A. Reed, one of the board of directors of the Bank.
On the same day at three o'clock in the afternoon the Bank made and filed an assignment of its property in trust for its creditors under Laws 1881, ch. 148, as amended, to John P. Rea, one of its directors and its attorney. Rea accepted the trust and next day made and filed his bond and took possession of the property of the Bank. At the hearing before the Court on July 15, 1893, these facts were shown and after argument the Court discharged the order to show cause and declined to issue an injunction or appoint a receiver. On July 27, 1893, a case containing the assignment and all the papers, proofs, files, orders and a narrative of the proceedings was settled, signed and filed and the plaintiff appealed to this Court.
H. W. Childs, Attorney General, and George B. Edgerton, his assistant, for appellant.
Kitchel, Cohen & Shaw, for respondent.
This is an action under 1878 G. S. ch. 76, by the attorney general on behalf of the state as a creditor against the defendant, an insolvent banking corporation. On the complaint and an affidavit, which made a case for the appointment of a receiver and for an injunction, an order was granted requiring the defendant to show cause why a receiver should not be appointed, and an injunction issued. At the time specified in the order the defendant did not attempt to show cause otherwise than by showing that after the commencement of the action it had made an assignment under the insolvency law of 1881 of all its property for the benefit of its creditors. On this showing the court refused to appoint a receiver or issue an injunction. The state appeals from the order so refusing.
Chapter 76 provides but a mere skeleton of procedure for the action authorized by it. Its provisions...
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