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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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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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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.
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.
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.
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.
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.
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.
Testifies for His Brother on Trial in Failed Stuart Bank Case.
O'NEILL. (AP). 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 a year ago with $300,000 in 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, F. 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.
Flannigan Is Given Five to Ten Year Term
Found Guilty on Nine Counts for Violating Banking Laws
O'Neill, Neb., Mar. 23. (AP)—James C. Flannigan, convicted in district court here recently for violation of state banking laws, today faced five to ten years in prison on each of nine counts, the sentences to run concurrently.
Judge R. R. Dickson pronounced sentence late yesterday, although Flannigan now is under a $5,000 appeal bond pending hearing of the case by the Nebraska supreme court. Flannigan was charged with receiving deposits in the Citizens' State Bank of Stuart when he knew it to be insolvent. The bank failed about a year ago with deposits of approximately $300,000.
Retrial of James' brother, John M. Flannigan, on a similar charge, is scheduled to start here April 4. The brothers were tried jointly several months ago. A jury deadlock resulted in separate retrials.
O'Neill, Neb., Mar. 26. (AP)—E. H. Luikart, receiver of the failed Citizens State Bank of Stuart, today was notified of an order made by District Judge R. R. Dickson here, requiring nearly $60,800 worth of first mortgages be turned over to him.
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.
Case of John M. Flannigan Soon To Jury
Former Head of State Bankers Association Takes Stand in His Own Defense; Testimony of Brothers Center of Interest Toward Close of Trial.
By J. B. O'SULLIVAN Staff Correspondent, O'Neill, Neb.
J. J. Harrington and Joseph C. Cook, defense attorneys in the case of the state of Nebraska against John M. Flannigan, ex-president of the collapsed Citizen's bank of Stuart, are expected to complete the presentation of their evidence and examinations of witnesses today and the fate of the white-haired banker soon will lie with twelve men who must determine his fate.
It is possible that the defense will finish today in time for the arguments to be heard and the case to go to the jury.
Flannigan is charged with having accepted deposits at his Stuart bank, more than one year ago, when he had knowledge the bank was in an insolvent condition. There are nine counts against him. James Flannigan, who was vice-president of this bank, now is under five- to ten-year sentence in prison for this offense. James
BY J. B. O'SULLIVAN Staff Correspondent, O'Neill, Neb.
J. J. Harrington and Joseph C. Cook, defense attorneys in the case of the state of Nebraska against John M. Flannigan, ex-president of the collapsed Citizen's bank of Stuart, are expected to complete the presentation of their evidence and examinations of witnesses today and the fate of the white-haired banker soon will lie with twelve men who must determine his fate.
It is possible that the defense will finish today in time for the arguments to be heard and the case to go to the jury.
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-
Flannigan Is Given Six Years In Prison
Motion of Former Stuart Banker For New Trial is Overruled and Sentence Pronounced.
O'NEILL, Neb., July 12—(AP)—District Judge H. D. Landis of Seward Monday overruled the motion of John M. Flannigan, former Stuart banker, for a new trial, and sentenced him to six years in prison.
Flannigan was convicted several weeks ago on charges of receiving deposits in the Citizens bank of Stuart when he knew it was insolvent. He was given two years
District Judge Landis of Seward Monday overruled the motion of John M. Flannigan, former Stuart banker, for a new trial, and sentenced him to six years in prison. Judge Landis was presiding for District Judge Dickson by order of the Nebraska supreme court.
Flannigan was convicted several weeks ago in the district court here on charges of receiving deposits in the Citizens Bank of Stuart when he knew it was insolvent. He was given two years at hard labor for each of three counts, the sentences to run consecutively. The bank failed Nov. 30, 1930 with deposits of approximately $300,000.
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.
Stockholders Filed Appeal from District Court Decision
Lincoln, Jan. 26. (AP)—A 1930 state constitutional amendment permitting quick action against stockholders in failed banks for their double liability was upheld today by the Nebraska supreme court as taking immediate effect.
Gus Bunz, a stockholder in the Bennington State bank, had appealed from a Douglas county district court decision in which the state banking department sought recovery from him of the liability before exhausting assets of the bank as was required before the amendment passed.
Validity of the law in its effect upon stockholders prior to enactment of the amendment was attacked but the court held the amendment changed only the time in which the liability could be sought and did not affect the previously established right of the bank receiver to sue for the money.
In a Cuming county banking case the court upheld the right of a receiver to sue an estate for stockholders' liability in the district court. The receiver of the Farmers State bank had an action against the estate of Herman Luehrmann in which an attempt was made by representatives of the estate to argue that the county court had exclusive jurisdiction of claims against estates. The banking department won its claim it needed only to keep the estate administration open in the county court while determining the liability in district court.
The department lost another suit, however, involving transactions of John M. Flannigan in the Citizens State bank of Stuart. The supreme court held the First National bank of Omaha was entitled to a trust fund claim for about $9,000 in the Stuart bank. The money represented proceeds of sale of livestock on which money was due the Omaha bank and the court held Flannigan erroneously deposited the money in his institution after clerking the sale.
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."
O'NEILL, March 24.—John M. Flannigan, former president of the Citizen's bank at Stuart, and his brother, James C., who was vice president, were taken to the penitentiary Friday by Sheriff Peter W. Duffy of Holt county.
John will start a three-year term. James has been serving a sentence and was brought here as a witness in a suit brought against the American Surety Co. by the bank receiver for $15,000 on bonds given by officers of the failed bank.
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.
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.