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STUART BANK IN HANDS OF STATE DEPARTMENT Dec. Citizens bank of Stuart, suspended business today taken by the state banking George W. Woods, bank commissioner, announced. The 1929 banking directory lists the deposits of the bank as approxThe stock and the The officers John M. Flannigan, James C. Flannigan, vice president; Thomas Mains, cashier.
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STUART BANK CLOSES. Virgil S. Lee, state bank examiner, was sent to Stuart Monday the banking department to take charge of the Citizens State which has suspended business. The bank operated by John M. Flannigan, president; James Flannipresident, and Thomas Mains. cashier. The firm had capital stock of $50,000 with surplus $12,500 No reason for its closing was given by Bank Commissioner
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STUART BANK CLOSES The Citizens State Bank of Stuclosed its doors Monday and the bank now in the hands of state bank receiver. With deposits of over the Citizens Bank two years ago considered one of the strong banks of this section of the state.
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Nebraska Notes They're Not So Dumb BEATRICE William Pollock, steward at the Institution of Feeble Minded Youth, reported that 900 pounds of chicken, 300 pounds of turkey, 25 gallons of oysters, 240 bunches of celery, 200 pounds of cranberries, potatoes, gravy, jellies, vegetables, etc., were served at the Thanksgiving dinner. There were 900 wards and 60 staff members at the tables. Wheat In Normal SIDNEY Moisture from the recent snow storm was of great benefit to fall-sown grains in western Nebraska, crop observers believe. Winter wheat is normal, they report. Corn husking is at a standstill and may not be resumed for a week, but approximately 80 per cent of the corn has been cribbed. Can't Smell, Sues for $25,000 LINCOLN What is the sense of smell worth? Bertha Dutton thinks $25,000 is about the right figure. She has filed suit in district court here for that amount, naming Thomas Dowd as defendant. The plaintiff alleges that as she stepped off a street car Oct. 20, she was struck by Dowd's automobile. She contends that her nerves were so badly shocked that since that time she has been unable to smell anything. $40,000 in Club Checks GRAND ISLAND - During the coming week Grand Island banks will pay out approximately $40,000 to the Christmas savings club members. The average amount to be paid each member is estimated at about $74. This amount, according to officials, is higher than during any previous year. Named Nebraska's Sweetheart LINCOLN - Miss Audrey Gregory, Hastings, was announced Thursday as "Nebraska's sweetheart." The young woman honored by the students of the University of Nebraska is a senior in the arts and science college, a freshman in the law school, and is a member of the Gamma Phi Beta sorority. Miss Gregory was elected by a general vote of all men students of the University of Nebraska, Nov. 20. Miss Lucille Carothers, Falls City, was "Nebraska's sweetheart" last year. The contest is conducted annually by the Kosmet klub. Form Taxpayers League BEATRICE - About 150 farmers from 11 precincts have organized the Gage County Taxpayers' Protective league. Fred Darrow, retired farmer, was named president; Dick Goble, vice president, and Edward McAllister, secretary. The league advocates abolition of the county highway commissioner, placing highway work under the district supervisor; reduction of the number of clerks in the courthouse and nullifying the 1 per cent fee paid to the city banks for collection taxes. Claims Woman Stole Hogs GRAND ISLAND Sheriff C.J. Palmer has recovered 10 Hampshire hogs stolen recently from Ben Cunningham, near Woodriver, and arrested Mrs. Floyd Brott in connection with the theft. The officer is seeking the woman's husband. Train Cuts Leg Off NEBRASKA CITY S. G. Bigford, Nebraska City, was critically injured Sunday when he was struck by a Missouri Pacific train at a grade crossing. One leg was severed and the other broken. Stuart Bank Fails Suspension of the Citizens State bank at Stuart, of which John M. Flannigan, prominent Nebraska banker, is president, was announced Monday at Lincoln by George F. Woods, state bank commissioner. Virgil S. Lee, state bank examiner, was placed in charge of the bank. The bank had a capital of $50,000 a surplus of $12,000 and deposits of approximately $600,000, according to the last financial statement of the bank. Mr. Flannigan is vice president and Thomas S. Mains, cashier.
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Mr. G. E. Hall, agent in charge of the Citizens Bank of Stuart, returned from his home at Lincoln Monday and has resumed his duties. He will be relieved this week by Mr. August H. Basler, and will go to his duties elsewhere. Mr. Hall states that the examination of records is progressing, and as soon as all necessary information is at hand, a second depositors meeting will be held and the facts presented. Mr. and Mrs. Henry Fuelberth drove down to Osmond Friday to visit relatives returning to Stuart Sunday. Mr. and Mrs. Roy Montgomery of Valentine are visiting relatives and friends in the Cleveland neighborhood. F. W. Irwin of Newport had business in Stuart Tuesday. Miss Margaret Wefso was in O'Neill yesterday. Jay Wefso returned home Saturday morning from Rushville where he spent Christmas with relatives. By Force of Circumstances Writers says every woman should he queen of her own home. And, whether he should or not, every husband is a gentleman-in-waiting. Arkansas Gazette.
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LOCAL NEWS ITEMS Miss Inez came from O'Neill Sunday to spend the day home. Layton Smith, who has been confined to bed for many weeks with blood poison is his foot, able to be up and around last Sunday and is getting along nicely. Infection set from scratch received last fall while playing football with Atkinson high school. Mrs. Linville, president of the American Legion Auxiliary, Mrs. McCauley, delegate, Mrs. Harry Miller Mrs. Geo. Campbell went to Norfolk yesterday to attend the district convention of the Auxiliary. The American Legion also held its district in Norfolk yesterday. Local Commander Geo. B. Campbell, Edw. O. Dibble, Harry Fullerton Gus Milner went down to attend the meeting. Mr. and Mrs. Melvin Richards with their son Ronald and wife of Sac City, Ia., came last Friday and visiting the home of Mr. Richards' father, Thomas Richards. They expect to return home the first of next week. Mrs. Wm. Griffin, who has been taking treatment for her eyes at St. Joseph's hospital in Omaha, returned home Tuesday morning. Dr. N. McKee who was operated upon for appendicitis at St. Oatherine's hospital in Omaha short time ago, came home Tuesday morning. Mrs. McKee was with him while at the hospital and drove the car home, bringing Mrs. Wm. Griffin with her. The doctor came on the train. In celebration of its sixth anniversary an Atkinson business firm, Webb Company this week is launching an sale for the benefit of its friends and A full page announcement of this interesting event will be found on page four of this issue of The Graphic. Mrs. N. O'Connell is patient this week the Atkinson hospital, taking medical treatment and rest. M, Hoskinson spent several days this week visiting friends and at his former home, Ponca, Neb. G. E. Morgan returned home last week from business trip to his fruit acreage near Mission, Texas. Monahan and daughter Eileen and Mrs. Thomas Malloy and son Thomas are visiting Mrs. Malloy's daughter, Mrs. George Zeimens of Neligh and are expected back home the latter part of this week. Miss Helen Mack returned home from Clearwater Saturday where she directed play, and left Sunday morning for Chatham, New Brunswick, Canada. Miss Mack will probably not be at home again before the summer vacation. A special eighth grade examination will be held Friday, Jan. 30 for eighth graders only, A/tkinson, Stuart, O'Neill, Page, Inman, Ewing, Chambers, Amelia, and Scottville. State teachers' examinations were held last Saturday with about 250 applicants writing Holt county. After careful examination of the assets of the defunct Citizens Bank of Stuart, the depositors' committee decided that any tempt reorganize the institution would be useless, said The Stuart Advocate last week in nouncing that Clarence Bollin had been receiver of the bank. The now charge and assets of the bank will be liquidated as fast as possible. County Attorney Julius D. Cronin was in Atkinson on business last Friday. Fred Mack and Chas. Prussa Omaha with truck load of hogs last week. Mrs. John Kazda arrived here Saturday from Omaha to spend few days with relatives and friends. Ernest Tesch returned home from Norfolk Wednesday where he spent few days this week. John Alfs was from O'Neill up Wednesday Atkinson friends. A. Miller, manager of the Lyric Theatre, and Harry Miller drove to Lincoln Monday where they attended an orization meetthey attended an organization meeting of independent Nebraska day in Omaha on business before returning home. Ted McElhaney of O'Neill, district court reporter, operation at the Mayo Rochester, Minn., Jan. friends in O'Neill last week were informed that he well could be ting along expected. January is an excellent time give winter protection to shrubery and orchards if you have not "Dread fifty already rather than fifty above well worth considerold saying this season.
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NAME CLARENCE BOLLIN STUART BANK RECEIVER STUART. Jan. District Judge Robert R. Dickson has pointed Clarence Bollin receiver of the Citizens bank of Stuart. Hope of reorganizing the institution has been abandoned.
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O'Neill, Feb. 18 Evidence being district here today the state's against James Flannigan, one charged with deposits the Citizens Bank Stuart when they knew the institution insolvent. It was testified Thomas Maythat James Flannigan with$1,400 from the bank few days before closed, assertedly in payment of salary. Jahn Flannigan and family cash$1,900 time deposit about same time, the court told.
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REFUSED OWN SALARY Testifies for His Brother on Trial in Failed Stuart Bank Case. O'NEILL. (/P). John M. Flannitestified in district court Monfor his brother, James, who on trial here for accepting deposits in the failed Citizens Stuart after he knew to be insolJohn said he owned $40,000 worth of stock in the bank, which closed about year ago with $300,000 in and that he now penniless. He did not know the institution have close, he added, until the before the that actually did. During the final year of its opersaid, he not only failed draw all his salary but he advanced the bank private funds to John denied previous testimony that he had told Bank Commissioner Woods could raise $200,000 save the bank. He said that Woods advised him to reduce his large deposits by giving big depositors notes for part of their money. Other defense witnesses were Frank Biglow, George Webber, Anton Wellinger, George Schmidt, Frank Kaup, Lewis, C. GeBartlett. Crowds pack nung, the day of the trial they did last when James and John were tried together the same charge, and the jury disagreed.
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JOHN FLANNIGAN SAYS REFUSED OWN SALARY Testifies for His Brother on Trial in Failed Stuart Bank Case. O'NEILL. (/P). John M. Flannigan testified in district court Monday for his brother, James, who is on trial here for accepting deposits in the failed Citizens bank of Stuart after he knew it to be insolvent. John said he owned $40,000 worth of stock in the bank, which closed about year ago with $300,000 deposits, and that he is now penniless. He did not know the institution would have to close, he added, until the Saturday before the Monday that it actually did. During the final year of its operation, he said, he not only failed to draw all his own salary but he advanced the bank private funds to try and save it. John denied previous testimony that he had told Bank Commissioner Woods he could raise $200,000 to save the bank He said that Woods advised him to reduce his large deposits by giving big depositors notes for part of their money. Other defense witnesses were Frank Biglow, George Webber, Anton Wellinger, George Schmidt, Frank Kaup, L. Lewis, C. C. Genung, T. L. Bartlett. Crowds pack the courtroom each day of the trial as they did last December when James and John were tried together on the same charge, and the jury disagreed.
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BANK CASE DECIDED STUART Must Turn Over Mortgaged Property to Receiver. O'NEILL. (/P). District Judge R. R. Dickson announced here Friday his decisions on number of cases involving more than $60,000 and resulting from the failure about a year ago of the Citizens State bank of Stuart. The points at issue involved suits which never have been passed on by the Nebraska supreme court, the majority of the cases having to do with first mortgages on real estate. The court found this property should be turned back to the bank receiver. It totals about 20 percent of the failed bank's deposits, which were about $300,000 at the time the institution ceased operating. Those holding the mortgages are Horace Shank, Glen Fergey, R. L. Paxton, Elmer McAllister, Leo Willcuts, Floyd Farley, John, Allen and Pearl Stephens, Barbara Hunt, and Josephine, Joe and Simon Attorneys of the receiver, E. H. Luikart, secretary of the state department of trade and commerce, were Frank Warner of Norfolk, and J. Dunn of Omaha. Attorneys for the preferred creditors were J. A. Donohue and J. J. Hartington of O'Neill.
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RECEIVER CREDITOR HOLDERS OF MORTGAGES OR. DERED TO TURN THEM OVER TO LUIKART STUART BANK IS INVOLVED Plaintiff Charged Sound Mortgages Were Given to Defendants Just Before Institution Go to High Court O'Neill, Neb., March The News: Friday clean-up District Judge Robert Dickson's court here and series cases resulting from the failure of the Citizen's bank, of Stuart, which occurred more than year ago, decided. Some of the cases decided Friday have been the docket since last fall. The cases are called "preferred cases. Just before the bank failed, the defendants were sound first mortgages, most on lands, and Luikart, receiver, sued for possesion these. More than involved and Judge Dickson decidfavor of the receiver. cording Attorney Frank Warner, Norfolk, the points issue cases never before have been tried court in Nebraska, and final opinion of the Nebraska court may necessary determine rightful ownership of the mortgages. Mr. Warner also said that Judge Dickson upheld by the supreme court the depositors of the failed Stuart bank receive about 20 percent on their deposits from this property. Those holding involved land are: HorShank, $36,000; Glen Paxton, $6,000; mer Leo Will cuts, $6,000; Floyd Farley, John, Allen, and Pearl Stephens, Barbara Hunt, $3,000: Josephine, Joe, and Simon Timmermans, $5,295.73, school rants amounting to $823.57. Judge Dickson called before him Harry Kopp and Joseph Juracek, both of Stuart, who several months were found guilty on contempt court charges. Instead of sentencing the men, the judge orderJuracek to appear before him sentence May 11 Kopp March The judge said there were several things personally want look up before he passed sentences. Attorneys Receiver Luikart Frank Warner, folk, and Dunn, Omaha, and those representing the preferred creditors were Harrington Donohoe O'Neill. Saturday Judge Dickson and Court Reporter Ted McElhaney plan to hold court Bassett and Ainsworth, and on Wednesday Butte.
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SETTLE STUART BANK CASES triet Judge Dickson announced here Friday his decisions on number of cases involving more than $60,000 and resulting from the failure about year ago of the Citizens State bank of Stuart. The majority of cases had to do with the first mortgages on real estate. The court found this property should be turned back to the bank receiver. It totals about 20 per cent of the failed bank's deposits. which were about $300,000 when the institution ceased Those holding the mortgages are Horace Shank, Glen Forgey R. Paxton, Elmer McAllister, Leo Willcuts, Floyd Farley John, Allen and Pearl Stephen, Barbara Hunt. and Josephine, Joe and Simon Timmerwans. Attorneys for the receiver. E H. Luikart, secretary of the state department of trade and commerce, were Frank Warner of Norfolk and J. Dunn of Omaha. Attorneys for the preferred creditors were J. A. Donohoe and J. J. Hartington of O'Neill.
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GETS SIX YEARS Former Banker's Motion for New Trial Overruled. Neb. District Judge Landis of Seward Monday overruled motion John Flannigan, former Stuart banker, new trial, and sentenced him six years in prison. Judge Lanpresiding District Judge Dickson order of the Nebrska supreme court. Flannigan was convicted several weeks in the district court here on of receiving posits the Citizens Bank Stuwhen knew it He was given two years at hard labor for counts, run The bank failed Nov. 30, 1930, with of approximately $300,000. brother, James, convicted charge to ten years prison and appealed case the court. The were tried jointly first, but jury and separate trials Another the Flannigan former Bassett banker, has been convicted of violation of state bank-
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Four test the first the kind brought before the Nebraska supreme court, have been filed by State Commerce Secretary Luikart. They involve the right recover from the favored depositors of failed banks. They given worth of curities when officers of the Citizens Stuart knew the bank to be The defendants claim that and mortgages were paid for drawing on their accounts the bank. The receiver alleges an illegal preference to these depositors, and asks the return of the securities.
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ACTION SUPREME COURT SAYS 1930 AMENDMENT TOOK EFFECT IMMEDIATELY RECEIVER CAN SUE ESTATE Cuming County Case Involving Herman Luehrmann Heirs tied Bank Wins Action Involving Flannigan Stuart Lincoln, amendment permitting quick action against stockholders falled for their double liability was upheld today by the Nebraska supreme court taking immediate effect. Gus Bunz, in the Bennington State bank, had appeal from Douglas county district court in which the state banking department sought from him the liability fore exhausting assets the bank was required before the amendment passed. Only Time Changed Validity the its effect upon prior enactment amendment tacked but the the amendment changed only the time which liability could be sought and did the ously the bank the money the court upheld right ceiver estate for stock holders liability the district court. The of the Farmers State bank had action against the of Herman in which attempt was made by of the estate that county court clusive jurisdiction claims against estates. The banking department won its claim needed keep the estate open county court while determining liability district court. department lost another suit however, transactions John Flannigan in the Citizens State bank of Stuart. The supreme court the First of Omaha entitled trust fund claim about $9,000 the money due the Omaha bank and the court held Flannigan erroneously deposited the money his institution after clerking the sale.
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Unauthorized deposit. John M. Flannigan, president and managing officer of the Citizens Bank of Stuart, knew all about the transaction. He was the original payee and still had a liability on the note. As clerk of the sale, he knew that certain purchasers having knowledge of the transaction refused to take a bill of sale from the Hoyts and demanded one from Jepsen. But instead of turning the proceeds over to the First National Bank of Omaha, they were entered wrongfully as a deposit in the bank of Bert and Jesse Hoyt, without their knowledge or consent, and the Hoyts do not now and never have claimed the fund. Jepsen asked for a settlement on the ranch immediately after the sale. Flannigan told him he would turn the proceeds over at Stuart. Jepsen made almost daily demands thereafter that. Flannigan turn over the proceeds, which were refused. The bank closed December 1, 1930. Knowledge of transaction by bank officer imputed to bank. The knowledge of the president and managing officer, who with knowledge of the ownership of a fund in his possession wrongfully places it as a deposit in the name of another party without said party's knowledge and consent and who does not claim the fund, may be the bank's knowledge, and the deposit is a trust fund. United States Nat. Bank V. Dunbar State Bank, 118 Neb. 624, 225 N. W. 753. "A bank receiving a deposit of funds of a village, the mayor and village clerk of such village then being the president and cashier of such bank, holds such funds as trustee for the village." "Knowledge of the president and cashier of a bank who are also mayor and village clerk of a village, in the absence of actual notice or knowledge on the part of the village, will be imputed only to such bank when it appears that such officers are acting only for and in the interest of themselves and of the bank." Union Nat. Bank V. Village of Beemer, 123 Neb. 778. 244 N. W. 303. "Knowledge of active managing of ficer of bank, where officer handled transaction, but acquired information as treasurer of school district, will be imputed to bank." Lincoln Nat. Bank & Trust Co. V. School District, 247 N. W. 433 (124 Neb. 538). Where officer has knowledge fund belongs to one and deposits it to another's credit, his knowledge is that of the bank. McCann V. State, 4 Neb. 324, State V. American State Bank, 108 Neb. 92. Knowledge of president and manager will be imputed to bank, where officer is acting for bank. Nebraska State Bank V. School District, 122 Neb. 483, 240 N. W. 870. State V. Brown County Bank, 112 Neb. 642, 200 N. W. 866. The receiver in his brief states: "In the case of First Nat. Bank V. Flannigan, 122 Neb. 545, 240 N. W. 751, it appears that the checks from this sale were not all cleared until the 1st day of December, 1930, the day on which the Stuart bank was closed. In this case the court found that Mr. Jepsen had authorized and ratified the actions of Mr. Flannigan when he agreed to come to Stuart for settlement and in carrying out the agreement between Jepsen and Flannigan the deposit was made in the Citizens Bank of Stuart with the consent and authority of Jepsen, resulting in a general deposit of the funds."
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John M. Flannigan Enters Pen; Given Work In "Studio" Pounding a typewriter at the Nebraska penitentiary Monday was John Flannigan, former president of the Citizens State bank at Stuart. The ex-banker. convicted of accepting deposits while his institution to be insolvent, entered the prison Saturday for three year term. He was put to work in the "studio," where fingerprint and Bertillion are kept. Returned to the penitentiary the same day was Flannigan's brother, James C., convicted the same ofTense. James began his term last September and has been working in the pants shop. He was taken to O'Neill recently to testify in suit brought by bank's receiver against the bankers' sureties. third Flannigan, Albert, was given bench parole.
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BANK RECEIVER WINS JUDGMENT Total of $15,000 Against Flannigans, Mains, Bond Company. O'NEILL, Neb., Oct. 16-(AP) District Judge Dickson Monday gave the receiver of the failed Citizens State bank of Stuart judgments for $5,000 each against John M. Flannigan, James Flannigan and Thomas S. Mains of O Neill. The Flannigans are serving terms penitentiary on charges of irregularities growing out of the bank's E. H Luikart, as receiver of the bank, brought suit on the personal bonds of the and the case was tried here early in March The decision has been pending since then. The asked reimbursement of the depositors for alleged salaries drawn by the men, alleged unlawful withdrawals, and other alleged improper The $15,000 judgment also was directed against American Securities company, surety on the bonds.