Nebraska State Bank (Milligan, NE)

Episode Information

Episode Type
Suspension β†’ Closure
Start Date
June 1, 1922*
Location
Milligan, Nebraska (40.500, -97.388)
Bank Type
state
Routing Number
76-1100

Metadata

Notes

Contemporary articles describe fraud, bogus CDs and misappropriation leading to takeover and receiver appointment.

Events (4)

1. June 1, 1922* Suspension
Cause
Bank Specific Adverse Info
Cause Details
Large shortage and alleged frauds (bogus certificates of deposit, misappropriation, forged endorsements) revealed, prompting state officials to close the bank.
Newspaper Excerpt
the Nebraska State bank of Milligan, which was closed by state bank officials Wednesday
Source
newspapers
2. June 1, 1922* Receivership
Newspaper Excerpt
B. A. Lynn of Geneva was named receiver ... report of the condition of the failed bank. The examiner was still in doubt as to the amount of the bogus certificates of deposit issued.
Source
newspapers
3. April 13, 1923 Other
Newspaper Excerpt
order of the Honorable Ralph D. Brown, Judge ... made on the 13th day of April, 1923, will sell for cash at public sale ... the following described property, to-wit:
Source
newspapers
4. February 16, 1924 Other
Newspaper Excerpt
Nebraska State bank, Milligan, full payment to depositors, $80,184.
Source
newspapers

Newspaper Articles (11)

Article from The Omaha Morning Bee, July 10, 1922

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Milligan Bank Shortage Will Reach $50,000 Grain Company With Offices of Bank as Shareholders Appears to Owe Bank $15,000 to $18,000. Geneva, Neb., July 9.--(Special Telegram.)-The shortage of the Nebraska State bank of Milligan, which was closed by state bank officials Wednesday, totals $50,000, it was estimated at a meeting of creditors Friday nights After B. A. Lynn of Geneva was named receiver, Jay M. Riley of Lincoln, state bank examiner, and E.C. Sharp who has had charge of the bank since June 19. made a report of the condition of the failed bank. The examiner was still in doubt as to the amount of the bogus certificates of deposit issued. Many of them were torn from the back of the book, he said. Discrepencies in the deposits total $10,000, of which $7.500 is said to be admitted by the men under arrest. Seek Missing Record. Riley stated that four months ago he examined the Milligan bank and found that there was no record of its standing with its correspondent. the Merchants National bank of Omaha. Riley then wrote the Omaha bank for figures and left town. The letter from the Omaha bank was sent to Riley in care of the Milligan bank. One of the figures in this statement had been changed, when he opened the letter a few days later, he said. Other alleged frauds included the misappropriation of $7,000 and a draft with an endorsement, believed to have been forged. Sight drafts on commission firms, for which it is believed no grain was shipped, were also disclosed. Liberty bonds are said to have disappeared from the deposit vaults of the bank and taxes paid to be forwarded to the county treasurer were never remitted. according to bank records. Grain Company Involved. The Milligan Graini, company appears to be indebted to the bank from $15.000 to $18,000. Besides Emil J. Kotas, former head of the Milligan bank, the other owners of the elevator are Herman Statsny, twice arrested for selling intoxicating . liquors, and James Keedjl, Adolph Kotas, cashier and brother of Emil J. Kotas, A committee of three was appointed to advise with the receiver and act in the interest of the community. This is made up of Len J. Davis, cashier of the Citizens State Bank of Geneva, S. F. Funemaker of Tobias and W. J. Matske of Shickley. The Nebraska State Bankers association interests will be represented by a committee composed of C. H. Brinkman of Ohiowa. L. P. Sorenson of Sutton and C. E. Bowdev of Friend. Fifty bankers were in attendance from this and adjacent counties. Frank M. Sloan of Geneva was chosen chairman and Leroy Stines of Fairmont, secretary.


Article from Omaha World-Herald, January 25, 1923

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of them of a criminal nature. Cases growing out of the failure of the Nebraska State bank of Milligan, has just begun serving a two-year sentence for forgery of liberty bonds, in the federal prison at Leavenworth. Charges are also filed against him in district court which convened Monday. Adolph and Emil Kotas are brothers.


Article from Nebraska Signal, February 22, 1923

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DISTRICT COURT. Term Lasting Four Weeks Ended Saturday Noon With Many Cases Still on the Docket. Judge Brown adjourned district court Saturday forenoon after a four weeks' session. Three weeks of the time were taken up with jury cases. A good many cases were disposed of but a large number still remain on the docket. All of the grain cases from the Milligan vicinity are yet to be heard and a number of the cases brought by the receiver of the failed Nebraska State bank of Milligan are yet to come to trial. The suit of Adolph Uldrich of Milligan on his claim for $6,500 against the failed Nebraska State bank of Milligan, which was being tried when The Signal went to press last Thursday morning, was finished at 10:50 a. m. At 3:45 p. m. the jury asked permission to come back to the courtroom to make inquiries regarding the evidence. The court gave permission. The jury desired to know particularly about the deposition of Adolph Kotas in which Mr. Kotas stated that he told Mr. Uldrich that the state guaranty fund would be liable for his $6,500, which he had given the bank, in case the bank failed. The jury returned to the jury room at 4:25 and immediately returned with a verdict allowing Mr. Uldrich's claim in full. The bank's receiver claimed that the $6,500 had been turned over to Adolph and E. J. Kotas and had not been deposited by them in the bank. The following composed the jury in this case: R. F. Dwyer, James Bumgarner, Wilmer Brown, Fred H. Camp, Clark Yates, Henry Eppler, Fred Matthies Sr., A. C. Fogle, R. H. Lovegrove, Henry Helderstadt, C. M. Hourigan and Henry Fisher. Counsel for the receiver of the Nebraska State bank of Milligan filed a motion for a new trial in the case of the bank against James Bors on a $3,000 note. The motion was argued and was taken under advisement by the court until the next term. Mr. Bors claimed that he had signed an accommodation note and the case was decided in his favor. The foreclosure case of B. A. Lynn, receiver, against Fred and Lucile Hodek was heard by the court last Thursday afternoon. The defendants alleged that the mortgage securing a $4,000 note had not been acknowledged by them. The court found that Fred Hodek had executed and delivered to E. J. Kotas the $4,000 note set forth in the petition and that the note with $758.30 interest was due. The court further decided that the mortgage had been executed by Mr. Hodek but that the said mortgage was fraudulently dated prior to defendant's marriage and that the defendant was married on the date of execution of the mortgage and the real estate described therein was at that time the homestead of the defendant and his wife. The mortgage was therefore declared void. The note and the mortgage had been assigned to E. J. Kotas so that the bank was not an innocent holder. Judgment was given the bank on the note but the mortgage was held void. In the foreclosure suit of B. A. Lynn, receiver, against Emma C. Hodek, et al, the defendants offered no testimony. Judgment was given the plaintiff for $3,000 on note and mortgage and the sheriff was ordered to sell the real estate unless the judgment is paid within twenty days. In the foreclosure suit of B. A. Lynn, receiver, against Tena Hodek, et al, the plaintiff was given a judgment on a note and mortgage for $3,000 and a sheriff's sale was ordered unless the judgment is paid within twenty days.


Article from Nebraska Signal, April 19, 1923

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County of Fillmore I, C. H. Brinkmann, cashier of the above named bank, do hereby swear that the above statement is a correct and true copy of the report made to the State Bureau of Banking. C. H. BRINKMANN. ATTEST: JACOB WEISS, Director. HENRY CLAUSSEN, Director. Subscribed and sworn to before me this 10th day of April, 1923. H. J. LYNN, Notary Public. (Seal) Notice of Receiver's Sale. IN THE DISTRICT COURT OF Fillmore County, Nebraska. State of Nebraska, ex rel., Clarence A. Davis, Attorney General, Plaintiff. β€”vsβ€” The Nebraska State Bank of Milligan, Nebraska. Defendant. I, Bert A. Lynn, being the duly appointed, qualified, and acting Receiver for the Nebraska State Bank of Milligan, Nebraska, by virtue of an order of the Honorable Ralph D. Brown, Judge of the District Court of Fillmore County, Nebraska, made on the 13th day of April, 1923, will sell for cash at public sale, to the highest bidder, or bidders, the following described property, to-wit:


Article from Lincoln Journal Star, November 9, 1923

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NO INTEREST ON DEPOSITS BANK RECEIVER RAISES NEW ISSUE IN HIGH COURT. Claims That Guaranty Fund Cannot Be Drawn on to Protect Investment Where Time Deposit Is Held. An entirely new question of law was argued and submitted to the supreme court Friday by C. H. Sloan, attorney for the receiver for the failed Nebraska State bank of Milligan. It is whether the deposit guaranty fund maintained by assessment upon the sound banks is liable for interest on time certificates of deposit. Mr. Sloan said that the statute is silent upon the proposition, while the decisions of other courts, being upon laws differently worded, are of no direct application. On the 16th of June, 1922, Katie Vavra deposited $3,200 in the Milligan bank and received a certificate of deposit for six months bearing 5 per cent interest. Three weeks later the bank was taken over by the department of trade and commerce. The lower court held that the fund was liable for all unpaid interest. The case is regarded by the bankers as important, as it adds materially to the liability of the guaranty fund, since a considerable proportion of the failed banks are small ones, which carry the largest percentage of time deposits. The defense is that the deposit guaranty fund is organized on the mutual dollar basis insofar as the repayment of deposits is concerned. It does not promise to repay other than the dollar that was deposited, and it is not obligated to protect the profit of the investing depositor. To so hold, it was argued, would be to favor the time depositor as against the one with an open checking account, and is no more of an obligation of the fund than the payment of back salaries for the bank officers. It is admitted that it would be a proper charge against the general assets of the bank. Mr. Sloan said the object of the law is good, however weak and unsound it may be economically, and to make the banks pay this interest would be inserting lead in the millstone that hangs about the necks of the sound banks under this system. It would be equivalent to a fire insurance company charging a higher rate on fireproof buildings than on tinder-roofed dwellings, or a life insurance making a sound 21-year-old man pay more than an octogenarian or a consumptive.


Article from Lincoln Journal Star, November 9, 1923

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not Be Drawn on to Protect Investment Where Time Deposit Is Held. An entirely new question of law was argued and submitted to the supreme court Friday by C. H. Sloan, attorney for the receiver for the failed Nebraska State bank of Milligan. It is whether the deposit guaranty fund maintained by assessment upon the sound banks is liable for interest on time certificates of deposit. Mr. Sloan said that the statute is silent upon the proposition, while the decisions of other courts, being upon laws differently worded, are of no direct application. On the 16th of June, 1922, Katie Vavra deposited $3,200 in the Milligan bank and received a certificate of deposit for six months bearing 5 per cent interest. Three weeks later the bank was taken over by the department of trade and commerce. The lower court held that the fund was liable for all unpaid interest. The case is regarded by the bankers as important, as it adds materially to the liability of the guaranty fund, since a considerable proportion of the failed banks are small ones, which carry the largest percentage of time deposits. The defense is that the deposit guaranty fund is organized on the mutual dollar basis insofar as the repayment of deposits is concerned. It does not promise to repay other than the dollar that was deposited, and it is not obligated to protect the profit of the investing depositor. To so hold, it was argued, would be to favor the time depositor as against the one with an open checking account, and is no more of an obligation of the fund than the payment of back salaries for the bank officers. It is admitted that it would be a proper charge against the general assets of the bank. Mr. Sloan said the object of the law is good, however weak and unsound it may be economically, and to make the banks pay this interest would be inserting lead in the millstone that hangs about the necks of the sound banks under this system. It would be equivalent to a fire insurance company charging a higher rate on fireproof buildings than on tinder-roofed dwellings, or a life insurance making a sound 21-year-old man pay more than an octogenarian or a consumptive. On the other side it was argued that the state authorizes the banks to pay interest on time deposits, and cannot now be heard to challenge the right to recover it; that the interest is an integral part of the debt; that the right to the interest is conferred by statute, and that the law says that any person from whom money is withheld is entitled to interest at 7 per cent, save in banks, under this law. WOULD ELIMINATE CHINCH BUG MENACE Entomologists Urge Burning Over of Areas Where Pest Is Found Wintering. Chinch bugs were abnormally abundant during the past summer in a number of Nebraska counties, chiefly along the southern boundary of the state, Prof. M. H. Swenk, entomologist of the University of Nebraska agricultural college reports. The counties thus concerned include Richardson, Pawnee, Gage, the southern parts of Nemaha and Johnson, the southeastern corner of Lancaster, part of Saline, Jefferson, Thayer, Nuckolls, Webster, Franklin, Harlan, Furnas, Gosper, eastern Frontier, and southern Dawson counties. Another area of infestation lies in western Knox, northern Holt, Boyd and eastern Keya Paha counties. In all of the area above mentioned chinch bugs have gone into wintering in sufficient numbers that the small grain and corn crops of 1924 is menaced. This same condition occurs over northern Missouri, eastern Kansas and a large part of Oklahoma. Entomologists of four states discussed this at a meeting at Kansas City October 29, and it was there decided that an energetic effort should be made to acquaint the farmers in the threatened areas of these states with


Article from Lincoln Journal Star, November 9, 1923

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NO INTEREST ON DEPOSITS BANK RECEIVER RAISES NEW ISSUE IN HIGH COURT. Claims That Guaranty Fund Cannot Be Drawn on to Protect Investment Where Time Deposit Is Held. An entirely new question of law was argued and submitted to the supreme court Friday by C. H. Sloan, attorney for the receiver for the failed Nebraska State bank of Milligan. It is whether the deposit guaranty fund maintained by assessment upon the sound banks is liable for interest on time certificates of deposit. Mr. Sloan said that the statute is silent upon the proposition, while the decisions of other courts, being upon laws differently worded, are of no direct application. On the 16th of June, 1922, Katie Vavra deposited $3,200 in the Milligan bank and received a certificate of deposit for six months bearing 5 per cent interest. Three weeks later the bank was taken over by the department of trade and commerce. The lower court held that the fund was liable for all unpaid interest. The case is regarded by the bankers as important, as it adds materially to the liability of the guaranty fund, since a considerable proportion of the failed banks are small ones, which carry the largest percentage of time deposits. The defense is that the deposit guaranty fund is organized on the mutual dollar basis insofar as the repayment of deposits is concerned. It does not promise to repay other than the dollar that was deposited, and it is not obligated to protect the profit of the investing depositor. To so hold, it was argued, would be to favor the time depositor as against the one with an open checking account, and is no more of an obligation of the fund than the payment of back salaries for the bank officers. It is admitted that it would be a proper charge against the general assets of the bank. Mr Sloan said the object of the law is good, however weak and unsound it may be economically, and to make the banks pay this interest would be inserting lead in the millstone that hangs about the necks of the sound banks under this system. It would be equivalent to a fire insurance company charging a higher rate on fireproof buildings than on tinder-roofed dwellings, or a life insurance making a sound 21-year-old man pay more than an octogenarian or a consumptive. On the other side it was argued that the state authorizes the banks to pay interest on time deposits, and cannot now be heard to challenge the right to recover it; that the interest is an integral part of the debt; that the right to the interest is conferred by statute, and that the law says that any person from whom money is withheld is entitled to interest at 7 per cent, save in banks, under this law.


Article from The Lincoln Star, February 16, 1924

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Settlements for Six Failed Banks Take One-sixth of Cash on Hand. About one-sixth of the amount of money in the state guaranty fund is being drawn out by Trade and Commerce Secretary Knudson to meet claims against six failed banks, in conformity with orders made by district court judges. The whole sum withdrawn is $427,275, to be distributed as follows: Nebraska State bank, Milligan, full payment to depositors, $80,184. Farmers' State bank, Dixon, full payment to depositors, $16,274. Citizens' State bank, McCook, to take up receiver's certificates in full, $204,208. First State bank, Kenesaw, to take up receiver's certificates in full, $115,785. Citizens' State bank, Kimball, interest on receiver's certificates, $5,000. Farmers' State bank, receiver's expenses, $5,885. Each solvent bank was drawn upon by Secretary Knudson for 16.8 per cent of its guaranty reserve, to make these payments. In addition, the same percentage was drawn from the special reserve guaranty fund of $19,700 in the hands of the state treasurer, yielding nearly $3,300 from that source. The regular guaranty fund contained $2,551,688 prior to the draft, and there now remains in it $2,124,413. The amount left on hand is less than the legal requirement of 1 per cent on average deposits, but the semi-annual assessment July 1 will bring the fund up again very close to the minimum which the law specifies.


Article from The Fillmore Chronicle, August 22, 1924

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DISTRICT COURT Judge Ralph D. Brown finished the June term of district court Saturday afternoon. The term, which was first set for June 23, did not begin until July 21 and there were other adjournments between sessions. Judge Brown will hold a special term beginning September 10 for the purpose of hearing the Milligan grain cases. These cases, in which sixteen Milligan farmers sued the Updike Grain company and other companies for losses sustained when the Milligan Grain company failed, were in court a week in January. A good deal of evidence was taken at that time and it is hoped to finish the evidence at this special term. Judge Brown issued an order last Thursday permitting E. J. Dempster receiver of the Nebraska State bank of Milligan, to sell the remaining assets of the bank. The date of the sale is September 24. C. M. Skiles of Lincoln represented the department of trade and commerce at the hearing. In the case of the Nebraska State Bank of Milligan vs James Bors, the plaintiff's motion for a new trial was overruled. The plaintiff then filed a motion for a judgment notwithstanding the verdict. This was overruled also and the court ordered the defendant to have and take nothing on his cause of action. Bors got a verdict in a jury trial when the bank receiver sued on a note some time ago. The suit of Sarah Wellman vs. Franklin W. Stephenson, to quiet title was heard Friday and the petition of the plaintiff was granted. There was no contest in the case. The suit of the Farmers & Merchants bank of Milligan vs. Frank Svoboda, Rose Svoboda and Albert Kassik was tried Friday. The court rendered a judgment against each of the defendants for $2,488.88 and interest In the foreclosure suit of George R. Bates vs. Peter Detweiler, et al, a judgment was given the plaintiff for $8,221.33 and the sheriff was ordered to sell the mortgaged property unless the judgment was paid within twenty days. The foreclosure suit of the Home Bank of Ohiowa vs. Edward K. Petracek, et al, was heard Saturday. W. J. Maier and wife, two of the defendants, entered their default. The court gave the plaintiff a judgment against the Maiers on their note for $4,223.71. The sheriff was instructed to sell the property in twenty days. Anntoer foreclosure suit was that of Emma Stutzman vs. Fred S. Manning, et al. A judgment of $2,466.12 was given the plaintiff with orders to sell the mortgaged real estate in twenty days at sheriff's sale. The Grafton State bank's foreclosure suit against Samuel Kauffman and wife was heard Saturday and the plaintiff received a judgment of $6,632.44 on three notes. In the partition case of Laura Kappmeyer vs. Henry Buckmeyer, J. D. Hamilton, trustee, filed his final report which was accepted by the court. The trustee was discharged from further duty in the case. When the case of Frances Bermaster vs. Thomas Bermaster, came up for hearing on the petition of the plaintiff for separate maintenance, attorneys announced that the parties had become reconciled and the petition of the plaintiff and the cross-petition of the defendant were dismissed and withdrawn from the files. Court adjourned at 5:10 p. m. until September 10.β€”Geneva Signal.


Article from Fillmore County News, June 18, 1925

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The News has always advocated the idea that a state should never inflict capital punishment. When a man is convicted on circumstantial evidence as was Walter Ray Simmons for the murder of Frank Table, there is a double reason for the stand taken. He was sentenced to die several months but *has been reprieved from time to time by both Governor Bryan and Governor McMullen. His last reprieve was granted last Tuesday until July 9. Simmons maintains that he is innocent. Suppose that he is innocent and had been executed at the time set by the court. The state could not give back his life, while if imprisoned and afterwards found to be innocent, he could be given his liberty and in that way be recompenced in part for the mistake made. Those who advocate capital punishment claim that it lessens crime. That claim is not proved by statistics from states where 'capital punishment is prohibited. There is no argument for it except what is based on vengeance and barbarity. Every community has the following classes of people-Those who feel that they are under obligations to others and those who think everybody else owes them and they owe no one. David Grayson says a person of the former class becomes beautiful, while the other develops into shabby man. Isn't Grayson right? Which would you rather talk with, the person who can appreciate what others have done for them or the one who never gets a square deal and looks upon everybody but himself as a grafter? All of the latter class who have intelligence enough to weigh conditions would be changed into the former if they would take a few minutes from pitying themselves and condemning everybody else and look conditions squarely in the face. How much do we owe Benj. Franklin for bringing the lightning down his kite string? Or Thos. A. Edison for his work in electricity Or the inventors of all the modern farm machinery and household appliances. Or the founders of this nation for giving us the government we are enjoying Or the thousands of others who have given their time and talent for results, the benefits of which we never could have had without them? No answer can be given. If our indebtedness to others in material benefits cannot be estimated, how about what has been done for us in a spiritual sense When any individual views himself in the true light with respect to his relation to the great scheme of things, how insignificant he becomes! State Bank of Omaha, vs. D. W. Geiselman, a motion filed by the de fendant that the plaintiff be requir ed to make his petiton more definite and certain was sustained by the Guy A. Hamilton was appointed guardian ad litem of the minor defendants in the partition suit of George F. Mason vs. William A. Ma son, et al. In the partition suit of Lester L. Stephens vs. Mary Steph ens Amis, et al, H. M. Link of Exeter was appointed referee. In the matter of the application of Janie Hunter to sell real estate belonging to the estate of her husband, E. H. Hunter, deceased, the court gave permission to sell the property. Guy A. Hamilton was ap pointed guardian ad litem of the two minor childrenj The injunction suit of William Gewecke Jr. vs. Lena Kappmeyer was dismissed. Grady Corbitt was appointed guardian ad litem in the matter of the apointment of John Simacek. guardian of his four chijdren, for license to sell real estate. In the partition suit of Gladys Sunshine Marble vs. Creola Ruby Wythers, et al. Guy Hamilton was appointed guardian ad litem. In the partition suit of Kate W. Curtiss vs. Val B. Curtiss, William Sloan was named guardian ad litem for the defendant Grady Corbitt was appointed guard ian ad litem for Lizzie Banld. incompetent in the action for license to sell real estate. Yesterday afternoon the court took up the case of E. J. Dempster, receiver of the Nebraska State Bank of Milligan, vs. E. J. Kotas, Frank R. Soukup, Mary Krisl, Jas Bors, James Motis Albert Kassik, James Krejdl, Albert Frycek, Frank Kassik, Propok Janouch, S. S. Welp ton, Adolph Kotas and D. B. Whelp ton under the stockholders' liability act.--Geneva Signal.


Article from Fillmore County News, June 18, 1925

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DISTRICT COURT Judge R. M. Proudfit of Friend convened an equity term of district court at Geneva Monday afternoon. That afternoon was spent in reading the docket and disposing of minor matters. Tuesday was citizenship day Seven applicants for final naturali zation papers were examined by the court and all were found sufficiently informed on United States history the constitution and our method of government to receive their citizenship. Those admitted were Albert Biba, Jens Carl Peterson. Caroline Matejka, Gusta Franz. Claus Franz, Nels Swanson and Wilhelm Gehrken. The court allowed the claim of R. B. Waring for attorney Services in the case of the state of Nebraska vs. Nebraska State Bank of Mil ligan at $117.40 over the objection of attorneys for the bank receiver The final report of the referee in the partition case of Frances Kness vs. Mabel Real, et al was approved and the referee was discharged. The report of W. R. Fulton, ref eree in Bertha Dierberger vs. Her man Woltje was also approved by the court. The judgment suit of the Dr. Ben jamin F. Bailey sanitarium company vs. Mrs. Hattie Couch of Exeter was settled out of court. Evidence in the divorce suit of Cecil Emerson vs. Charles O. Emerson was heard and the plaintiff was granted a decree of divorce to become effective in six months. She was also given the custoy of two minor children. The defendant did not contest the action. In the foreclosure suit of Len J. Davis vs. Frank Kuska, et al Guy A. Hamilton was appointed guardian ad litem for the Kuska minor child ren. In the judgment suit of K. C.