12501. Farmers & Merchants State Bank (New England, ND)

Bank Information

Episode Type
Suspension → Closure
Bank Type
state
Start Date
September 15, 1931
Location
New England, North Dakota (46.539, -102.868)

Metadata

Model
gpt-5-mini
Short Digest
63a5695a

Response Measures

None

Description

The bank is repeatedly described as closed Sept. 15, 1931 and a state receiver (L. R. Baird) was appointed and brought suit against stockholders — consistent with a permanent closure and receivership. No article describes a depositor run prior to suspension, so classify as suspension leading to closure/receivership. Cause of the suspension is not specified in the articles, so coded as 'other'.

Events (2)
1. September 15, 1931 Receivership
Newspaper Excerpt
L. R. Baird, receiver of state banks, in an effort to collect double the amount of their stock from them. ... the Farmers and Merchants State Bank of New England, which closed Sept. 15, 1931, vs. W. L. Whitmore and others and H. A. Borcherding.
Source
newspapers
2. September 15, 1931 Suspension
Cause Details
Article states the bank 'closed Sept. 15, 1931' but gives no explicit cause for the suspension/closure.
Newspaper Excerpt
Farmers and Merchants State Bank of New England, which closed Sept. 15, 1931.
Source
newspapers

Newspaper Articles (9)
1. November 7, 1931 The Bismarck Tribune Bismarck, Mandan, ND
Article from The Bismarck Tribune, November 7, 1931

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Article Text

ASSERTS BANKERS NOT LIABLE UNDER NEW STATE STATUTE Matter Presented to Judge Pugh in District Court in New England Case LAWREVISED IN_1931 Defendant Contends Only Stockholder in Banks Formed Since July Are Liable Contention that the 1931 legislature revised the banking laws in such a way that stockholders in banks established prior to July 1 are not subject to double liability in the event of bank failure is before Judge Thomas H. Pugh, Dickinson, sitting in the Burleigh county district court. The claim was made in a demurrer filed in Burleigh county district court by Dullam and Young, Bismarck law firm representing H. A. Borcherding, New England, defendant in an action brought by L. R. Baird, receiver of state banks. Judge Pugh expects to make his decision in this test case of the 1931 banking law in the near future. Borcherding is one of five stockholders in the Farmers and Merchants e State Bank of New England, which closed Sept. 15, 1931, who are defende ants in the action brought by Baird in p an effort to collect double the amount of their stock from them. e In filing his demurrer, the defendant declared that Chapter 96 of the banking laws passed by the 1931 legislature "repeals provisions that gave the receiver authority to enforce the super-added liability of the stockholder." He said the 1931 laws repealed Section 5,168 of the 1913 session laws, which gave the receiver such authority. d The New England bank was organized under the laws in force prior to the 1931 session. The defendant's contention is that stockholders of only those banks organized under the 1931 laws are liable for double the amount of their stock. Should Judge Pugh decide against m him, Borcherding will take his argu3 ment before the state supreme court, er his attorneys have announced. Baird would make no statement reas garding the case. Because practically all of the state 10 banks in North Dakota were organr ized under the laws in force prior to 1931, interest in the case is high. The five defendants in the action e hold 150 shares of stock in the closed bank, each share valued at $100. These shares are divided as follows: W. L. Whitmire, 50; H. A. Borcherdal ing, 30; R. J. Lauterbach, 10; James y E. Whitmire, 55; and Fred Borcherd11 ing, five.

2. November 10, 1931 The Bismarck Tribune Bismarck, Mandan, ND
Article from The Bismarck Tribune, November 10, 1931

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Double Liability of Bank Stockholders Is Affirmed Decision Is Rendered By Judge POLICE AND FAMILY Pugh in Case Involving New England Man OF RICH MAN FIGHT The double liability of stockholders in closed state banks was not removed by the new banking code Lawyers Refuse Information to adopted by the legislature last winOfficers in St. Louis ter, Judge Thomas H. Pugh, Dickinson, ruled Tuesday in Burleigh counKidnap Case ty district court. In his decision, however, Judge St. Louis, Nov. 10-(AP)-Lack of coPugh held that authority to bring operation between the family of Alexsuit to enforce the double liability ander Berg, abducted millionaire, and statute lies with the creditors of the the police department, heretofore only closed bank, rather than with the rehinted at, was brought into the open ceiver. In the past the receiver, in Tuesday by one of Berg's attorneys. his legal capacity as agent for the "I will not tell you we have had any creditors, has brought such actions. further communication," the attorJudge Pugh made his decision in ney, Adrian Levinson, told reporters, sustaining a demurrer entered by H. "for if you get information the police A. Borcherding, New England, to an get it." action brought by L. R. Baird, reLevinson revealed John Rogers, ceiver. Post-Dispatch reporter who played a Borcherding is one of five stockprominent part in the return of Dr. holders in the Farmers and MerIsaac D. Kelley, eye, ear, nose and chants State bank of New England, throat specialist, kidnaped last April which closed Sept. 15, 1931. All are 20, was being consulted by advisers of defendants in the action brought by the Berg family. Baird in an effort to collect double The Globe-Democrat said Tuesday the amount of their stock from them. it had learned Berg's abductors have In filing his demurrer, the defendbeen sending notes to his family. The ant declared that chapter 96 of the newspaper quoted a St. Louis county banking laws passed by the 1931 legofficial as saying one of the notes deislature "repeals provisions that gave manded $25,000 ransom and warned the receiver authority to enforce the "Don't tell the St. Louis police anysuper-added liability of the stockthing; they know too much already." holder." Berg was kidnaped Friday night as An appeal to the supreme court on he was being driven to his apartment the case is probable. by his negro chauffeur. Regarding the enforcibility of the added liability by the receiver, Pugh said, "the legislature has spoken twice on the subject, once in 1915, King Carol Grows Wr when it enacted section 5,189 and conferred the power, and again in 1931, when, with full knowledge of Brother Follows the conditions, it withdrew the power. "It is my opinion that section 5,168 Bucharest, Hungary, Nov. 10.has been continuously in effect since its enactment in 1890, and now is in (AP)-The morganatic marriage of full force and effect; and, so far as Prince Nicholas of Rumania with that feature of the case is concerned, Mme. Jana Lucia Deletj, in a the demurrer should be overruled. dramatic elopement Monday deThe liability imposed by the terms of 5,168 can be enforced, in my opinspite King Carol's stern disapion, only by the creditors or by a proval of the union, has royal creditor for the benefit of all. Hence, circles buzzing with excited comthe demurrer, in so far as it chalment. lenges the right of the receiver to enPrince Nicholas, fascinated by force the statutory added liability, the charms of the brunette beaushould be in this respect sustained." ty, ignored his elder brother's remarmings

3. November 17, 1931 The Bismarck Tribune Bismarck, Mandan, ND
Article from The Bismarck Tribune, November 17, 1931

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TO TAKE BANK CASE TO SUPREME COURT Appeal Will Be Made By State Receiver From Decision of Judge Pugh North Dakota's supreme court will be asked to decide whether or not the 1931 legislature took from the state receiver the authority to collect double liability from stockholders of closed state banks. An appeal is being made by attorneys for L. R. Baird, receiver, from a decision made in Burleigh county district court by Judge Thomas H. Pugh, Dickinson, Nov. 9. In sustaining a demurrer entered by H. A. Borcherding, New England, Judge Pugh ruled that the stockholders of closed state banks still are liable for double the amount of their stock but that the receiver was shorn of his authority to collect it from them by Chapter 96 of the 1931 banking laws. He held that the stockholders' liability can be enforced only "by the creditors or by a creditor for the behefit of all." Borcherding is one of five stockholders in the Farmers and Merchants State Bank of New England, which closed Sept. 15. All are defendants in the action brought by Baird in an effort to collect double the amount of their stock from them. The receiver's attorneys claim that it was not the intent of the legislature to take the collection authority from the receiver and that Chapter 96 did so "inadvertantly." The supreme court has indicated that it will hear arguments on the case shortly after the appeal is filed, probably in the next few days.

4. November 18, 1931 The Forum Fargo, ND
Article from The Forum, November 18, 1931

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HIGH COURT TO GET BANK CASE Receiver Will Test Legality Of Double Liability Collection Bismarck, N. D., Nov. 17.-(AP)The North Dakota supreme court will be asked to decide whether the 1931 legislature took from the state receiver the authority to collect double liability from stockholders of closed state banks. An appeal is to be taken by attorneys for L. R. Baird, receiver, from decision made in Burleigh county district court by Judge Thomas H. Pugh, Dickinson. Nov. In sustaining demurrer entered by A. A. Borcherding, New England, Judge Pugh ruled that the stockhold ers of closed state banks still are liable for double the amount of their stock but that the receiver was shorn of his authority to collect from them by chapter 96 of the 1931 banking laws. He held that the stockholders' liability can be enforced only "by the creditors or by a creditor for the benefit of all." Borcherding is one of five stockholders in the Farmers and Merchants State bank of New England. which closed Sept. 15. All are defendants in the action brought by Baird in an effort to collect double the amount of their stock from them. The receiver's attorneys claim that It was not the Intent of the legisla. ture to take the collection authority from the receiver and that chapter The supreme court has indicated that it will hear arguments on the case shortly after the appeal is filed, probably in the next few days.

5. November 24, 1931 The Forum Fargo, ND
Article from The Forum, November 24, 1931

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BANK LIABILITY BEFORE COURT Closed Bank Stockholder Claims Solons Took Power From Receiver Bismarck, N. D., Nov. The North supreme today under advisement the question the recent took from the state bank receiver the authority collect double from stockholders of closed state banks. Oral were heard by the higher court this in the S. Baird, ceiver, in effort to collect double liability from H. New one of five stockholders in the Farmers and Merchants State bank of New England which closed refused to pay the double his by the 1931 legislature took from the state ceiver the power collect such liability. Baird brought the action in Burleigh county district court where Judge Thomas H. Pugh favor and ruled the shorn the legislature the power to collect the double Pugh held, however, stockholders closed state banks are still liable for double the amount of their stock, collection could by creditors the benefit of Baird the his before the higher today that the intent the legislature this from receiver and that the wording of the law ding's counsel denied contending the legislature to take the authority from the

6. November 24, 1931 Grand Forks Herald Grand Forks, ND
Article from Grand Forks Herald, November 24, 1931

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HIGH COURT STUDIES BANK LIABILITY CASE Interpretation of State Assembly's Action Will Be Given by Jurists. Bismarck, N. D., Nov. The North Dakota supreme court today took under advisement the question of whether the recent from state receiver to collect double liability from of closed state banks. Oral arguments were heard high court afternoon brought by Baird, effort to double liability from New one five stockholders in the Farmers Merchants State bank New England which closed September Borcherding refused to pay the his banking enacted 1931 legislature took from receiver power to collect liability. the action in district Judge Pugh held favor of Borcherding and ruled the shorn the legislature the to collect the double liabili- held, stockholdclosed state banks are still liable for the their stock, but collection could be enforced by creditors "for the benefit of all." Baird appealed.

7. November 24, 1931 The Bismarck Tribune Bismarck, Mandan, ND
Article from The Bismarck Tribune, November 24, 1931

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BANK LAW CASE IS UNDER ADVISEMENT Supreme Court Hears Argument on Authority to Collect Double Liability The North Dakota supreme court Monday took under advisement the question of whether the recent legislature took from the state bank receiver the authority to collect double liability from stockholders of closed banks. Oral arguments were heard by the higher court this afternoon in the case brought by L. S. Baird, state receiver, in an effort to collect double liability from H. A. Borcherding, New England, one of five stockholders in the Farmers and Mechants State Bank of New England which closed September 15. Borcherding refused to pay the double amount of stock liability claiming the banking code enacted by the 1931 legislature took from the state receiver the power to collect such a liability. Baird brought the action in Burleigh county district court where Judge Thomas H. Pugh held in favor of Borcherding and ruled the receiver was shorn by the legislature of the power to collect the double liability. Pugh held, however, stockholders of closed banks are still liable for double the amount of their stock, but collection could only be enforced by creditors "for the benefit of all." Baird appealed to the supreme court and his counsel argued before the higher court that it was not the intent of the legislature to take this power from the receiver and that the wording of the law resulted from inadvertence. Borcherding's counsel denied this, contending the legislature expressly intended to take the authority from the receiver.

8. January 23, 1932 Morning Pioneer Mandan, ND
Article from Morning Pioneer, January 23, 1932

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PUGH REVERSED STATE COURT BANK LAWS RECEIVER OF CLOSED BANKS STILL HAS POWER COL. LECT LIABILITY (By The Associated Press) receiver of banks was by the North Dakota Supreme Court today to have to recover the added liability of bank stockholders. an opinion reversing deciJudge Thomas H. Pugh in Burleigh county district court, the supreme court ruled that the failof 1931 statute to state that the receiver has "does not in itself cancel power be found in the statute. Defendants who were stockholdclosed Farmers Merchants State Bank of New Eng contended the legisintended take this power the receiver state omitting the provision the recodified bank laws, enacted by 1931 legislative assemblies. the contention of the dethat, under the 1931 law, actions against closed banks would have to be by rather than the receiver on behalf of the

9. January 23, 1932 The Bismarck Tribune Bismarck, Mandan, ND
Article from The Bismarck Tribune, January 23, 1932

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# BANK RECEIVER'S POWER TO SUE IS UPHELD BY COURT State's High Tribunal Rules Baird Has Same Authority as Under Old Law # WESTERN BANK INVOLVED Test Case Affected Stockholders of Closed Institution at New England Decision that L. R. Baird, as receiver of state banks, has legal power to bring suit to collect the double Hability of stockholders in closed state banks was handed down by the state supreme court Friday. The decision was given in the case of Baird, as receiver of the Farmers and Merchants State Bank of New England, vs. W. L. Whitmore and others and H. A. Borcherding. The defendants had contended that a change in the law governing closed banks, made at the last legislative session, took away Baird's authority to file such suits. They were upheld in the Burleigh county district court, where all state bank cases are tried, but Baird was successful in his appeal to the high court. It was the contention of the defendants that, under an alleged change in the law, any actions against stockholders of closed banks would have to be instituted by creditors rather than by the receiver on behalf of the creditors. Had this view been upheld the result would have been to seriously hamper the work of the receiver's office, it was contended in arguments to the supreme court. The case was in the nature of a test of the new statute and clarifies the intention of the legislature with regard to that phase of the state banking code.