State v. Bell

• Decision Date: 13 May 1896
• Docket Number: 10,086--(293)
• Citation: 67 N.W. 212,64 Minn. 400
• Parties: STATE OF MINNESOTA v. DAVID C. BELL, Receiver
• Court: Minnesota Supreme Court

67 N.W. 212

64 Minn. 400

STATE OF MINNESOTA v. DAVID C. BELL, Receiver

Nos. 10,086--(293)

Supreme Court of Minnesota

May 13, 1896

Appeal by defendant from an order of the district court for Hennepin county, Jamison, J., directing him, as receiver of the City Bank of Minneapolis, insolvent, to pay over to plaintiff $ 14,217.68 and interest in full payment of plaintiff's claim against said insolvent. Affirmed.

The order appealed from is affirmed.

Harlan P. Roberts and Welch, Hayne & Conlin, for appellant.

H. W Childs, Attorney General, and Geo. B. Edgerton, for the State.

OPINION

CANTY J.

The City Bank of Minneapolis is a corporation, was organized under the laws of this state for the purpose of doing a banking business, and carried on such business for many years prior to January 14, 1896, when it became insolvent, and closed its doors. Thereupon an action was commenced against it under G. S. 1894, c. 76, for the appointment of a receiver to wind up its affairs, and a receiver was duly appointed. Some time previous to its failure the bank was selected as one of the depositaries of state funds, gave a proper bond and received from the state treasurer deposits of state funds, all as provided by G. S. 1894, § 344 (2). At the time of its failure the bank still retained of such funds the sum of $ 14,217.68. The receiver, having qualified and entered upon the discharge of his duties, collected from the assets of the bank, and had on hand, the sum of $ 35,000, and thereupon the state, through its attorney general, applied to the court in the receivership action for an order that it be paid as a preferred creditor out of the money so in the hands of the receiver. The court so ordered, and the receiver appeals.

We are of the opinion that under our statutes the state is a preferred creditor in such a case as this, and that the order appealed from should be affirmed. G. S. 1894, § 348, provides: "If any treasurer, or other person indebted to the state, becomes insolvent, the debt of the state shall be paid first of all debts, notwithstanding any attachment against his effects, or any voluntary assignment thereof to pay debts, or for other purposes." Section 5898, found in chapter 76, provides: "Upon a final judgment on any such complaint, the court shall cause a just and fair distribution of the property of all such corporations and of the proceeds thereof, * * * to be made in the following manner: After the payment of costs, debts due the United States, the state of Minnesota, all taxes," etc., the receiver shall pay the other debts. This clearly makes the state a preferred creditor in proceedings under chapter 76.

To avoid the effect of this section, appellant refers to section 5908, found in this same chapter 76, which provides "Upon a final judgment in any such action to restrain a corporation, or against directors or stockholders, the court shall cause a just and fair distribution of the property of such corporation, and of the proceeds thereof, to be made among its creditors." Here are two sections of chapter 76, both providing for the final distribution of the assets of corporations. Appe...