Farmers State Bank (Belfield, ND)

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SAVINGS BANK IS CLOSED BECAUSE RESERVE TOO LOW Barre Savings Bank Closed by Commissioner OF DEPOSITS $1,536,000 Details Unknown but Probable That Overdue Notes to Granite Men Crippled Bank. Barre, Nov. 22. George B. Carpenter, bank commissioner at 2 o'clock this afternoon closed the Barre Savings Bank and Trust company, following a partial examination of the bank's financial standing Mr. Carpenter took over the bank's management as provided by the general laws. Early last week unauthenticated rumors were spread in Barre and vicinity concerning the condition of the bank and on Friday a small run occurred. Saturday the run continued until 10 o'clock when the demand was SO great that the bank officials invoked the 60-day clause of the state bank ing law requiring that a notice be given before a deposit could be withdrawn. Bank Commissioner Carpenter was notified and this morning commenced the investigation of the bank's finances. As soon as that is completed, a public statement will be made. While no figures were given out, it is rumored that the run amounted to $150, 003 The total resources of the bank are $2,223,582.82 as shown by the bank's report to Mr. Carpenter on September 8. The liabilities are: Capital paid in, $50,000; surplus from reserve, $67,000; savings deposits, $1,536,910.43 certificate of deposit, $96,781.37; commercial deposits, $295,324.37: treasurer's checks, $65,066 65; bills payable $112,500. Bismark, N. D. Nov. 22.-Three more banks were added today to the string of North Dakota financial institutions that have closed their doors in the past six day due to depletion of their reserves which officials say is due to failure of farmers to meet notes held by the banks. The Farmers' State bank of Belfield, the State Bank of Killdeer and the Security State bank at Columbus closed today, making nine since the tain first of the week.

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NORTH DAKOTA BANKS CLOSE

Depreciated Collateral and Wheat Situmtion Given AH Reasons. Fargo, N. D. Nov. 24. - Nine banks have been closed in North Dakota during the last ten days as R esult of the "whent strike," three of the group of banks affected being closed yesterday. Depreciated collateral values, coupled with the refusal of the farmers to sell their grain or stock at existing prices, are the elements that have combined to force the suspension of business on the part of the banks. The three that closed their doore today are the First State Bank of Kill Deer, the Security State Bank of Columbus and the Farmers' State Bank of Bolfield. Prior to today the following banks had been closed: Bantry Bank at Bantry, Beach State at Bech, Security State Bank at New England, Farmers' State Bank at Havelock, the Tolley State Bank at Tolley and the First State Bank at Greene.

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LEAGUE BANKER CHARGED WITH WASTING FUNDS Adam Lefor, Receiver of Belfield Institution, is Plaintiff. Dickinson, N. D., Aug. 25.-Charging that Adam A. Lefor, while acting as receiver of the Farmers' State Bank of Belfield, violated his trust. juggled thousands of dollars in securities and has negligently, willfully. knowingly and fraudulently dissipated and squandered the assets of the blosed institution for the purpose of favoring himself and his friends, George Laney, present receiver of the bank. has brought ouit against Lefor in district court asking judgment for the whole amount dissipated or squandered by Lefor and that the latter be required to make full restitution for his unlawful acts." Lefor. ardent leaguer. alleged membed of the "inner circle" and whip for the organization leaders in Stark county on the west Slope, was appointed receiver of the bank by Bank Examiner O. E. Lofthus shortly after the institution closed its doors on February 1. 1921. He continued in that capacity until April 1: 1922. when his removal was ordered and Laney was appointed in his stead. About three weeks ago Lefor left Dickinson for an extended visit in Germany and Jugo-Slavia. Service of the complaint was made just as he stepped aboard the train. Included in the allegations made by Laney in the complaint is the charge that Lefor, who is also president of the Citizens' State Bank of Belfield. a competing institution. in

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Northwestern News violation of his trust as receiver and to the detriment and disadvantage of the creditors of the Farmers' State AGUE BANKER bank, took out of the assets of said bank certain bills receivable held by him as receiver. aggregating. without HARGED WITH interest accrued thereon. $3,388.84, or thereabouts; that all of such notes were valid obligations of the makers; that all of them were collectible and WASTING FUNDS worth the several face amounts shown thereon, together with interest from date thereof; that the said Lefor. as receiver. assigned and transferred Lefor, Receiver of such bills receivable to the Citizens' State bank at Belfield in exchange for Belfield Institution, is certain bills receivable of said bank, which were then and have been at all Plaintiff. times since uncollectible and worthless to the creditors of the insolvent bank Restitution Asked. lckinson, N. D., Aug. 25.-ChargIn concluding the charges the plainthat Adam A. Lefor, while acting tiff prays judgment: receiver of the Farmers' State That Lefor be required to account of Belfield, violated his trust. for all the transactions had by him thousands of dollars in securias receiver of the Farmers' State and has negligently, willfully. bank. wingly and fraudulently dissipated That the detriment caused by his squandered the assets of the said transactions to said bank and institution for the purpose of the amount to which the assets of himself and his friends, the bank have been squandered and Laney, present receiver of the dissipated by reason of his negligence has brought ouit against Lefor and conduct be ascertained and delistrict court asking judgment for termined. whole amount dissipated or That the defendant pay to the andered by Lefor and that the latplaintiff the amount dissipated or apbe required to make full restitupropriated by him as aforesaid. for his unlawful acts." That he be required to make resardent leaguer. alleged memtitution to the plaintiff wholly for his of the "inner circle" and whip said unlawful acts, his negligence and the organization leaders in Stark his misconduct. on the west Slope, was apThat the plaintiff have such other receiver of the bank by Bank relief as is equitable and preper. miner O. E. Lofthus shortly after It is expected that the case will be institution closed its doors on tried at the November term of the ruary 1. 1921. He continued in Stark county district court. C. L. capacity until April 1: 1922. Young of the law firm of Newton, his removal was ordered and Dullam & Young of Bismarck is atwas appointed in his stead. torney for Laney. three weeks ago Lefor left Lefor was-appointed receiver of the kinson for an extended visit in Farmers' State Bank by the league many and Jugo-Slavia. Service of administration over the protest of complaint was made just as he stockholders in the institution and aboard the train. continued in that capacity until the ncluded in the allegations made appointment of Laney was ordered by Laney in the complaint is the the court. that Lefer who to also presi-

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RECEIVER OF BANK IS SUED BY SUCCESSOR Adam Lefor of Stark County Is Accused by George Laney Dickinson, N. D., Aug. 26.-Charging that Adam A. Lefor, while acting as receiver of the Farmers State Bank of Belfield, violated his trust, juggled thousands of dollars in securities and has negligently, wilfully, knowing and fraudulently dissipated and squandered the assets of the closed institution for the purpose of favoring himself and his friends, George Laney, present receiver of the bank, has brought suit against Lefor in district court asking judgment for the whole amount dissipated or squandered by Lefor and that the latter be required to make full restitution for his unlawful acts. Lefor, ardent leaguer, member of the "inner circle" and whip for the organization leader in Stark county and on the west Slope, was apointed receiver of the bank by Bank Examiner O. E. Lofthus shortly after the institution closed its doors on February 1, 1921. He continued in that capacity until April 1, 1922, when his removal was ordered and Laney was appointed in his stead. About three weeks ago Lefor left Dickinson for an extended trip in Germany and Jugo-Slavia. Service of the complaint was made just as he stepped aboard the train. Transferred Paper Included in the allegations made by Laney in the complaint is the charge that Lefor, who is also president of the Citizens State Bank of Belfield, a "competing institution," in violation of his trust as receiver and to the detriment of disadvantage of the creditors of the Farmers State bank, took out of the assets of said bank certain bills receivable held by him as receiver, aggregating, without interest accrued thereon, $3,333.84, or thereabouts; that all of such notes were valid obligations of the makers; that all of them were collectible and worth the several face amounts shown thereon, together with interest from date thereof; that the said Lefor, as receiver, assigned and transferred such bills receivable to the Citizens State Bank of Belfield in exchange for certain bills receivable of said bank, which were then, and have been at all times since uncollectible and worthless to the creditors of the insolvent bank." Demands Accounting Laney further alleges that "Lefor had information that certain of the notes of the Farmers State bank exchanged as aforesaid, would be paid and that they were paid immediately after the exchange took place; that the Citizens State bank received, and has since retained the proceds and that the amount of collections made upon such notes are unknown to the and that Lefor has refused with the to plaintiff comply demand of and the plaintff's to restore the proceeds account fully for the assets so diverted."

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ACTION DISMISSED Dickinson, N.D., May 16-The action brought by the guaranty fund commission against Adam A. Lefor, as receiver of the Farmers State bank of Belfield, was dismissed by District Judge H. L. Berry when it came before him this week on a demurrer of the defense. The guaranty commission instituted the action about a year ago on behalf of George Laney who succeeded Mr. Lefor as receiver of the bank.

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ADAM LEFOR, AS BANK RECEIVER, CAUSED $25,000 LOSS, IS CHARGE

Defendant In Action By Baird; One Of League Appointees

Bismarck, N. D., Jan. 24.—What is generally expected here to be the first of numerous legal actions growing out of the alleged extravagant method of handling closed banks by receivers named by the state banking board when it was controlled by Nonpartisan league officials has been filed in the Burleigh county district court against Adam Lefor, Dickinson banker and active in Nonpartisan league circles.

The suit was instituted by L. R. Baird, general receiver of closed banks in the state, named under the law of the last legislature which placed the jurisdiction of all closed banks under the supreme court and district court of Burleigh county for the purpose of reducing expenses in administering their affairs. During the administration of many closed banks by Nonpartisan appointed receivers many charges of wasteful management were made.

Accounting Is Sought

The suit is against Lefor as former receiver of the Farmers State bank of Belfield and S. A. Olsness, commissioner of insurance, and the state bonding fund which bonded him for $15,000. No specific sum is demanded, but an accounting in court is sought.

The suit charges that Lefor caused losses approximating $25,000 in the bank. He was receiver from Feb. 1, 1921 until about April 1, 1922, being succeeded by George Laney, in turn succeeded by Baird.

The suit, filed by Zuger and Tillotson, Bismarck attorneys, alleges that "when said bank was intrusted to defendant as receiver, the bank owned and was possessed of property, real, personal and mixed of the aggregate value of about $111,018.23 and had liabilities and obligations aggregating about $96,599.49.

Wrongful Actions Charged

"That during the term of his office as receiver and while the property, assets and affairs of said insolvent bank were committed to his trust as aforesaid, the said Adam Lefor, disregarded his duty in the premises, squandered, dissipated, misapplied and lost large portions of such property, and, as plaintiff is informed and verily believes, wrongfully and unlawfully converted a large part of the money, property and assets of said bank to his, defendant's own use; and such wrongful acts of defendant resulted in losses of approximately $25,000."

The complaint alleges that the acts were "for the purpose of benefiting himself, his friends and associates, to the great detriment, disadvantage and loss of the estate of said insolvent bank."

Worthless Report Alleged

Because it states the suit involves many complicated matters the complaint asks an accounting be made. It charges further: "That an accounting has been duly demanded of the defendant in the premises, and he has been called upon to pay over, deliver and account for all money, property and assets of said bank, which came into his hands as receiver in trust, as aforesaid, and this the defendant has refused to do except to render a false, fictitious and worthless report to the state banking board."

Mr. Lefor, who is a prominent banker in the western part of the state, is expected to resist the suit.

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CHARGE WASTE IN HANDLING BELFIELD BANK

Law Suit Is Started Against, Adam Lefor, Former Receiver of Bank

SAYS LOSS $25,000

What is generally expected here to be the first of numerous legal actions growing out of the alleged extravagant method of handling closed banks by receivers named by the state banking board when it was controlled by Nonpartisan League officials has been filed in the Burleigh county district court against Adam Lefor, Dickinson banker and active in Nonpartisan League circles. The suit was instituted by L. R. Baird, general receiver of closed banks in the state, named under the law of the last legislature which placed the jurisdiction of all closed banks under the supreme court and district court of Burleigh county for the purpose of reducing expenses in administering their affairs. During the administration of many closed banks by Nonpartisan-appointed receivers many charges of wasteful management were made.

The suit is against Lefor as former receiver of the Farmers State Bank of Belfield and S. A. Olsness, commissioner of insurance, and the state bonding fund which bonded him for $15,000. No specific sum is demanded, but an accounting in court is sought.

The suit charges that Lefor caused losses approximating $25,000 in the

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BOND SUITS MAY FOLLOW State Bonding Fund Disapproves Claims Suits against the State 1 Bonding Fund on the part of Ransom and LaMoure counties may follow refusal of the bonding fund board to approve claims presented to it. The board disapproved the claim of Ransom county on the bonds of the county treasurer and county commissioners for $24,382.58 for money in a closed bank, disapproved the claim of Bottineau county on the treasurer of that county for $11,575.86 for the same reason and disapproved of the claim of L. R. Baird, general receiver, on the bond of Adam Lefor as receiver of the Farmers State Bank of Belfield for alleged misuse of funds. The board allowed the claim of LaMoure county of $5,000 on the bond of Robert E. Powers, former sheriff, and the claim of Larimore school district No. 44 of $5,000 on the bond of P. L. Arms as district treasurer.

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HIGH COURT DECIDES TWO BANK CASES

(Continued From Page tion raised that legislative act fixed venue of all actions by against of closed said that legislation dealt only with acts involving of banking porations and "there to make any changes in the existing laws as regards the suits by or against the receivers of insolvent banking corporations. Lefor Loses Appeal The court in second a ing the appeal of Adam Lefor former receiver of the Farmers State bank of Belfield in suit him by L. R. Baird general receiver closed banks, for an counting held that of Baird as receiver was legal Lefor contended in lawsuit that since Baird member of the state senate of 1923, which enacted the law of banks, appointment was in violation of See tion 39 of which vides that no member of legislative assembly during term for which he was elect to any civil office which shall have been during term for which was elected nor shall any member receive any appointment the governor during the term for which was Baird's Appointment Valid Baird was appointed general celver of closed bangs after the 1923 session by District Judge M. Cooley, named by the supreme court to preside actions in Burleigh court The supreme court. holding Baird's appointment said that of appointment of receivers is Inheritent in courts of equity. and that there fore, the legislature created no new office The legislative intent the court found. was to limit, rather than conher of general to two The was left by the legis lature to the court ap. Justice Nuessle, appealing from Judge Cooley's decision, had alleged the 1923 act of was tutional supreme court held in the Mohall bank case that the act 1s valid.

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Appointment legal

The court, in a second case, deciding the appeal of Adam A. Lefor, former receiver of the Farmers State bank of Belfield, in a suit instituted against him by L. R. Baird, general receiver of closed banks, for an accounting, held that appointment of Baird as receiver was legal.

Lefor contended in the lawsuit that since Baird was a member of the state senate of 1923, which enacted the law providing for consolidation of receiverships of closed banks, Baird's appointment was in violation of section 39 of the constitution which provides that no member of a legislative assembly shall, during term for which he was elected, be appointed or elected to any civil office, which shall have been created during term for which he was elected, nor shall any member receive any civil appointment from the governor during the term for which he was elected.

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BANK RECEIVER LAW IS FOUND TO BE VALID Supreme Court, in Decision, Declares it was Within Legislature's Power BAIRD APPOINTMENT Court Also Holds That Receiver was Entitled to Accept Position The legislative act of 1923, consolidating receiverships of closed under the was the supreme banks district futional court, by Burleigh, declared court, county consti- in an opinion announced late yesterday. The validity of the act was contested by W. H. McIntosh, who had been appointed receiver of the Mohall State Bank by a district court judge. Several receivers who had been named by district courts declined to recognize the appointment of a general receiver to succeed them. The sole question involved in the case, the opinion, written by Justice A. M. Christianson said, was whether or not chapter 137, laws of 1923, is unconstitutional. This act provided that the supreme court should assume original jurisdiction all cases or in receivership trans- the mit matters county Burleigh all receivership district the court. to In pursuance of this, supreme court lodged receivership supervision in the Burleigh county district court and appointed District Judge C. M. Cooley of Grand Forks to sit in such cases. Power of Legislature The court, in its opinion, held that "the legislature in the exercise constitutional powers as the body of the may of lawmaking its under state prescribe the conditions which a banking corporation organized under the laws of this state shall be deemed insolvent; authorize the Attorney-General of the state to commence an action for the liquidation of such bank, or banks; vest the district court of Burleigh county with jurisdiction of such actions, and require the supreme court, in the exercise of its supervisory jurto isdiction over inferior courts, designate a district judge to hear and determine such actions and appoint a receiver." The court. in answering the ob jection raised that the legislative act fixed the venue of all actions by or against the receiver of a closed bank, said that legislation dealt only with acts involving insolvency of banking corporations and "there was no intention to make any changes in the existing laws as regards the venue of suits by or against the receivers of insolvent banking corporations. Affirm Lefor Case The court, in deciding the appeal of Adam A. Lefor, former receiver of the Farmers State Bank of Belfield, in the suit instituted against him by L. R. Baird, general receiver of closed banks, for an accounting, held that the appointment of Baird as receiver was legal. Lefor contended in the law suit that since Mr. Baird was a member of the state senate of 1923, which enacted the law providing for consolidation of receiverships of closed banks, Baird's appointment was in violation of section 39 of the Constitution which provides that no member of the legislative assembly shall, during the term for which he was elected, be appointed or elected to any civil office, which shall have been created during the term for which he was elected, nor shall any member receive any civil appointment from the governor during the term for which he was elected. Mr. Baird was appointed general receiver of closed banks after the 1923 session by District Judge c. M. Cooley, named by the supreme court to preside in receivership actions in the Burleigh district court. The supreme court, holding Mr. Baird's was valid, said that of appointment "power appointment of of receivers equity," is inherent in courts and that, therefore, the legislature created no new office. The legislative intent, the court found, was to limit, rather than confer, power of receivership appointments, since it limited the number of general receivers to two. The compensation the was left by the legislature to court making the appointment, the opinion, written by Justice Nuessle, recites. Lefor, in appealing from Judge Cooley's decision. had alleged the 1923 act of the legislature was unconstitutional. The supreme court the Mohall bank case y is valid. Zuger and y held the act in Mr. Tillotson Baird. that of Bismarck represented

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DECISION OF SUPREME COURT From Burleigh County L. R. Baird, as Receiver of the Farmers State Bank of Belfield, North Dakota, Plaintiff and Respondent. vs. Adam A. Lefor and State Bonding Fund and S. A. Olsness, as Commissioner of Insurance of the State of North Dakota, Defendants. Adam A. Lefor, Appellant. SYLLABUS: 1. An order overruling an objection to the jurisdiction of a judge to hear and determine a cause is not appealable under the provisions of Section 7841, C. L. 1913. 2. Chapter 137, S. L. 1923 is a constitutional enactment. State of North Dakota v. First State Bank of Jud et al followed and approved. 3. The designation of a district judge to hear and determine action for the liquidation of insolvent banking corporations under the provisions of Chapter 137, S. L. 1923, is not a designation to hear and determine actions brought by or against any receiver appointed by such judge pursuant to the provisions of said Chapter 137. Such actions stand in the same position as any other action insofar as the provisions of law relating to the venue thereof or the judges who shall sit in the trial of the same are concerned. 4. Chapter 137, S. L. 1923 provides a mode of procedure for the liquidation and winding up of insolvent banking corporations in accordance with well established equitable rules, and by providing for the appointment of a receiver by the court does not create a civil office within the meaning of that term as used in Section 39 of the Constitution. 5. A, receiver appointed under the provisions of Chapter 137, S. L. 1923 is not the holder of a civil office within the meaning of that term as used in Section 39 of the Constitution