10024. Bank of Zumbrota (Zumbrota, MN)

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: September 2, 1897
Location: Zumbrota, Minnesota (44.294, -92.669)

Metadata

Model: gpt-5-mini
Short Digest: 513945cf

Response Measures

None

Description

No runs are reported. The bank was insolvent, involved in litigation over an illegal stock issue (Sept 1897 court decision) and a receiver was appointed (Sept 1897). Final receiver's report and dividend approved Feb 1899, indicating permanent closure and distribution by receiver.

Events (4)

1. September 2, 1897 Other

Newspaper Excerpt: Judge Crosby's decision in the now celebrated Bank of Zumbrota case has been completed ... The attempted issue of $20,000 of new stock was illegal ... the old stockholders are each liable ... receiver, C. J. Rockne, within twenty days after the entry of judgment herein.
Source: newspapers

2. September 2, 1897 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Bank found insolvent and involved in illegal $20,000 stock issue; court declared new stock void and ordered double-liability judgment against old stockholders. Insolvency led to appointment of a receiver.
Newspaper Excerpt: The attempted issue of $20,000 of new stock was illegal ... the bank being insolvent, an action was commenced to appoint a receiver for it under chapter 76 ...
Source: newspapers

3. September 14, 1897 Receivership

Newspaper Excerpt: A. J. Roekne has been appointed receiver of the Bank of Zumbrota.
Source: newspapers

4. February 7, 1899 Receivership

Newspaper Excerpt: The final report of D. B. Scofield, receiver of the Bank of Zumbrota, was approved by Judge F. M. Crosby today and a dividend of 12.1 per cent ordered paid.
Source: newspapers

Newspaper Articles (7)

1. September 2, 1897 The Saint Paul Globe Saint Paul, MN

Article from The Saint Paul Globe, September 2, 1897

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JUDGE CROSBY HANDS DOWN A BELATED DECISION AT RED WING. NEW STOCK ISSUE IS VOID. ITS HOLDERS COME IN AS CREDITORS OF THE ZUMBROTA INSTITUTION. A DOUBLE LIABILITY JUDGMENT. It Is Thirteen Months Since the Action Was Tried and Submitted to the Court. Special to the Globe. RED WING, Minn., Sept. 1.-Judge Crosby's decision in the now celebrated Bank of Zumbrota case has been completed and has been filed in the office of the court. The case was tried a year ago last July, and it has taken the judge over thirteen months to render a decision. It is a most voluminous document carefully reviewing the whole case, the findings proper covering over thirty pages, and the entire document fifty-two pages of typewritten matter. Judge Crosby declares the new stock void, and the holders thereof entitled to share as creditors in the distribution of assets. He also orders judgment entered against the old stockholders under the double liability law. The findings in law are as follows: The attempted issue of $20,000 of new stock was illegal, and the stock is valid. The parties holding it are entitled to stand as creditors for the claims and demands they surrender for it. The old stockholders are each liable to the creditors of the bank in this action. Such creditors are entitled to judgment against each of the old stockholders for twice the amount of the stock held by him or her. The representatives of such as have departed this life are liable in their stead to the extent of the assets in their hands, as stated in the finding of facts. No interest can be computed on this liability prior to judgment. But the judgment against each, when entered, will therefrom bear interest at the rate of 7 per cent per annum. Any creditor who has not received 20 per cent upon the face of his claim is entitled to receive that percent thereof to put him on an equality with the other creditors. He will thereafter receive, like all other creditors, the dividends that may be paid from the assets of the bank or out of collections from the stockholders. The stockholders must pay the amount of the said liability to said receiver, C. J. Rockne, within twenty days after the entry of judgment herein. In case of neglect or failure of any defendant to say pay, then the judgment against him should be docketed and a separate writ of execution in the usual form issued against him or her to collect the amount or any unpaid balance due. All other questions are reserved, and are to be determined on further application to the court, on notice by any party interested. Let judgment be entered accordingly. Want ad in last Sunday's Globe brought

2. September 14, 1897 Willmar Tribune Willmar, MN

Article from Willmar Tribune, September 14, 1897

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News in Brief. The fifteenth annual reunion of the Fourth Minnesota Veteran Volunteer infantry was held at St. Paul. A 2-year-old daughter of W. M. Catlins, of Minnesota Lake, while playing near a wire fence, in some way got caught and was strangled to death. Wm. Ryan, a visitor from Wisconsin, was buncoed out of $50 with the lock game by Minneapolis men. Deputy Sheriff Tradewell, of Lakefield, was shot in the face by Alfred Ellison. a farmer upon whom he was serving some attachment papers. The wounds were not fatal. The Red Lake Indians stopped the Shevlin-Carpenter railroad suryeyors from running their line across the reservation. They claim it is interfering with their lake shore rights and will. destroy their fishing grounds. Mathew Lemm was arrested at St. Cloud for the theft of 19 sacks of wheat. Arthur Catabani was indicted for the murder of one Reinhart in a saloon at Ely last July. Christina Digre sues James J. Hill and the Manitoba railway for $10,000 as damages sustained by her in the !aundry of the Hotel Lafayette in 1895. The national convention of the Polish union of America was held at St. Paul, with delegates from all parts of the country. The state board of capitol commissioners have sold the first issue of board certificates to the First National bank of St. Paul at a premium of $980 on the full issue of $50,000. The certificates were authorized by an act of the legislature. Darwin S. Hall has been reinstated as a member of the Chippewa Indian commission. There is a falling off in the showing mude by property of the state through the reports by the counties to the state auditor of about $2,411,000 from last year. The grand total of all the personal property in the state is reported by the assessors of the various counties as $96,785,932. During a severe electrical storm at St. Cloud, Sam Orton's big barn south of the reformatory was struck and burned to the ground. Ten horses were stunned and one killed. Nine men were asleep in the barn and three of them, including Charles Volley, were severely stunned, but all got out. Loss on barn about $1,500. A. J. Roekne has been appointed receiver of the Bank of Zumbrota. Carl Anderson was enticed from the side of his family at the Union depot in St. Paul by bunco men and robbed of $35. Parry Long, who came to Minneapolis in 1853, died at the age of 99 years.

3. September 16, 1897 The Worthington Advance Worthington, MN

Article from The Worthington Advance, September 16, 1897

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News in Brief. The fifteenth annual reunion of the Fourth Minnesota Veteran Volunteer infantry was held at St. Paul. A 2-year-old daughter of W. M. Catlins, of Minnesota Lake, while playing near a wire fence, in some way got caught and was strangled to death. Wm. Ryan, a visitor from Wisconsin, was buncoed out of $50 with the lock game by Minneapolis men. Deputy Sheriff Tradewell, of Lakefield, was shot in the face by Alfred Ellison, a farmer upon whom he was serving some attachment papers. The wounds were not fatal. The Red Lake Indians stopped the Shevlin-Carpenter railroad suryeyors from running their line across the reservation. They claim it is interfering with their lake shore rights and will destroy their fishing grounds. Mathew Lemm was arrested at St. Cloud for the theft of 19 sacks of wheat. Arthur Catabani was indicted for the murder of one Reinhart in a saloon at Ely last July. Christina Digre sues James J. Hill and the Manitoba railway for $10,000 as damages sustained by her in the laundry of the Hotel Lafayette in 1895. The national convention of the Polish union of America was held at St. Paul, with delegates from all parts of the country. The state board of capitol commissioners have sold the first issue of board certificates to the First National bank of St. Paul at a premium of $980 on the full issue of $50,000. The certificates were authorized by an act of the legislature. Darwin S. Hall has been reinstated as a member of the Chippewa Indian commission. There is a falling off in the showing made by property of the state through the reports by the counties to the state auditor of about $2,411,000 from last year. The grand total of all the personal property in the state is reported by the assessors of the various counties as $96,785,922. During a severe electrical storm at St. Cloud, Sam Orton's big barn south of the reformatory was struck and burned to the ground. Ten horses were stunned and one killed. Nine men were asleep in the barn and three of them, including Charles Volley, were severely stunned, but all got out. Loss on barn about $1,500. A. J. Roekne has been appointed receiver of the Bank of Zumbrota. Carl Anderson was enticed from the side of his family at the Union depot in St. Paul by bunco men and robbed of $35. Parry Long, who came to Minneapolis in 1853, died at the age of 99 years. Mrs. Guestomozyk was killed by the cars at Winona. Her body was nearly cut in two from head to foot. The corner stone of the new church of St. Vincent de Paul was laid by Archbishop Ireland at St. Paul, the ceremonies accompanying the event being unusually impressive. The safe in the Northwestern depot at Redwood Falls was blown open by burglars, the outer door being blown off. but they failed to penetrate the second door leading to the money chest and tickets. The money drawer in the office was rifled, but the burglars socured nothing.

4. May 20, 1898 The Saint Paul Globe Saint Paul, MN

Article from The Saint Paul Globe, May 20, 1898

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BANKING LAW EXPLAINED SUPREME COURT PASSES ON ITS VARIOUS INTRICACIES Zumbrota Bank Case Brings Out an Important Ruling on Some Involved Points-Street Railway and Hastings & Dakota Road's Receiver Win Some Appeal Cases Rue's Indictment Stands. In a decision handed down yesterday the supreme court passes on a number of disputed points in the existing laws covering banking organizations. The case is that of Heman H. Palmer, plaintiff, VS. Bank of Zumbrota, defendant; R. P. Thacher, intervening appellanit; Rev. O. Hanson et al., intervenors; Creditors, appellants, vs. E. R. Canfield et al., defendants; Sid B. Barteau et al., respondents. The court holds that: 1. Banks organized under ch. 33, G. S. 1878, had before the passage of 145 laws 1895, the charter powers of banks of issue, whether they issued any circulating notes or not. 2. In so far as ch. 155, G. D. 1885, attempts to give authority to amend articles of incorporation in other respects than by extending the term of existence of the corporation it is unconstitutional and void, because no subject except such extension is expressed in the title of the act. 3. Sec. 13 of art. 9, of the constitution requires that a law for the organization of banks of issue shall be passed by a twothirds vote of the legislature; held, ch. 77, G. L. 1881, which attempts to amend sec. 18, of said ch. 33, contravenes this constitutional provision and is void, because it was not passed by such a two-thirds vote. 4. Held, said sec. 18, as originally enacted, authorized banks organized under sa ch. 33, to increase their capital stock by amending the articles of incorporation. 5. But as the statute is silent as to the manner in which the amendment shall be made, the same formalities are required with reference to the execution, filing and publication of the amendment, as are required with reference to the original articles of incorporation. 6. Where in amending the articles of incorporation the requirements as to these formalities were not complied but the amendment was voted for by the stockholders, the increased stock was issued, and held by the new stockholders until, the bank being insolvent, an action was commenced to appoint a receiver for it under chapter 76, General Statutes 1894; held, as to creditors who have become such on the faith of the new stock, the holders of it are estopped to deny its validity. 7. Creditors are presumed to have trusted the bank on the faith of the increase of the stock from the time that such increase was voted. 8. But as against creditors who became such before such vote, the new stockholders are not estopped, unless there is in favor of creditors some special equity which creates such estoppel. On the facts in this case, held, there is no such equity. 9. Held, as against such creditors, the holders of the new stock who received it from the bank in lieu of claims which they formerly held as creditors of the b nk, are entitled to receive and stand as creditors, not stockholders. 10. The receiver appointed in such an action has no authority to allow or disallow claims of creditors, and where he allowed same and paid a dividend thereon. and disallowed others, the court may allow the latter and order the same dividend to be first paid on them out of the fund derived from the stockholders' double liability, and order the distribution of the balance of that fund to all the creditors pro rata. 11. The order for judgment construed, and held, not to provide that creditors who failed to intervene and exhibit their claim, should receive a dividend, held error. 12. Where the purchaser of a number of the claims of creditors owed no fiduciary relation to the bank and paid a price which was not so inadequate as to shock the conscience, held. he is entitled to a dividend on the full face of the claims. 13. Held, the stockholders' double liability is an unliquidated demand, and is an action under chapter 76 to enforce it. interest should under section 5504, General Statutes 1894, be allowed on the amount of the double liability from the time of filing the decision in the court Delow, but not before. 14. Held, the amounts which the new stockholders, standing as creditors, may collect from the old stockholders on their double liability, should be applied as far as necessary, in payment of the amount for which such new stockholders are liable to the creditors who became such on the faith of the increase of the stock. The manner of determining the extent of this liability stated. Order modified.

5. February 8, 1899 The Saint Paul Globe Saint Paul, MN

Article from The Saint Paul Globe, February 8, 1899

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Zumbrota Bank Dividend. HASTINGS, Minn., Feb. 7.-(Special.)-The final report of D. B. Scofield, receiver of the Bank of Zumbrota, was approved by Judge F. M. Crosby today and a dividend of 12.1 per cent ordered paid.

6. February 16, 1899 Warren Sheaf Warren, MN

Article from Warren Sheaf, February 16, 1899

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7. February 16, 1899 The Worthington Advance Worthington, MN

Article from The Worthington Advance, February 16, 1899

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BRIEF STATE NEWS. John Bols' restaurant at Stewartville was partially burned. At a special election the village of Excelsior decided not to enlarge its limits. Fire in the plant of the Minneapolis Bedding Company caused a loss of $8,000. The schools in Fremont have been closed on account of an epidemic of diphtheria. A project is on foot at Crookston to build a large lumber mill in the Cass Lake region. The Butler-Ryan company of St. Paul gets the contract for building the north pier of the Duluth ship canal. Sixteen young lads of St. Cloud were found guilty of stealing a tor of coal from the Great Northern yards. Clara Gregory, arrested 'in a wine room. will test the validity of the law porhibiting women from entering saloons. The large village school house at Hokah was burned while school was in session. All the scholars got out safely. Loss $10,000. The final report of D. B. Scofield. receiver of the Bank of Zumbrota. was approved by Judge F. M. Crosby and a dividend of 12 1-10 per cent. ordered paid. W. F. Porter of Minneapolis. has been awarded the contract for furnishing the heating apparatus and pine coverings for the public building at Akron, Ohio. His bid was $3,548. The only school building at Excelsior was destroyed by fire. The building was 15 years old. The fire caught in the basement, and rapidly spread through the entire building. Its cost was $10,000. Adjt. Gen. Lambert is hustling to recover the arms and equipments of the Minnesota national guard from Washington. He expects to have them here ready for business in the early spring. The state prison yesterday turned over $10,755.83 to Auditor Dunn as the amount of January earnings in that institution. The Milwaukee road also /handed the auditor $25,000 to apply on its gross earnings tax. The directors of the First Congregational church, Moorhead. have come to the conclusion that the old church building is too small for the large membership and have decided to build a new edifice next summer. General Reeve writes from Manila that he has got his fill of the Philippines, that it is not a white man's country. It is all right to hold the Philippines, he says, but he wants to see a new set of men do the holding. Those who have been at it for five months have had enough. Insurance Commissioner Dearth has revoked the license allowing the Fort Wayne Insurance company to do business in this state. The action was due to the fact that there appeared to be some irregularities in $195,000 in common stock certificates of the American Sugar Refining company. The St. Cloud Normal school, the members of which have arranged for a joint debate with the high school of Duluth, to take place on the evening of April 23. have decided to take the negative side of the subject; Resolved. That the jury system should be abolished. John Hansen, a teamster at Winona, made an unsuccessful attempt to commit suicide by taking tincture of aconite. He was poor, his family were suffering. and he wanted to die. He was saved with difficulty. Charitable institutions have taken his case in hand, and will render 'the family assistance.