The Muskogee cimeter. [volume] (Muskogee, Indian Territory, Okla.) 1901-19??, 1905-11-23
OKLAHOMA SECURES JU. EMIT
AGAINST AMERICAN BONDING
COMPANY FOR BANK LOSSES
CASE TO Be APPEALED TO HIGHER COURT
BY the Verdict the Territory Will Lose
Nothing by Failure of Capitol Ma.
tionaI Bank-A Possibility That the
Case May Yet be Lost

Case May Yet be Lost
GUTHRIE: In the district court
here, jury gave Oklahoma Territory
a judgment against the American
Bonding company, of Baltimore, Mary
land, for S17S,539.9S with interest at
per cent from June 6, 1905. This
covers the actual loss of the territory
in deposit in the Capitol National bank
which failed here in April, 1904. The
original amount of the territory's loss
was S244, ,053.21, but since the bank
failed two dividends have been paid
by Receivers Willoughby and Cherry;
the first amounted to 20 per cent OF
$4S,S1064 for the territory; the Sec
ond amounted TO 10 per cent or S36,
6079S for the territory. This leaves
the sum of S17S, S,5399S, which includes
Z per cent interest from the time the
bank failed until June 6, 1905, still
owing to the territory, and for this
amount judgment was given against
the American Bonding company
This company, together with the
Fidelity & Deposit company Of Balti-
more and the United States Fidelity a.
Guaranty of Baltimore had guaranteed
the terrtory's deposits in the Capitol
National bank. After the bank faile
it was found that the two last named
companies were not liable on their
bonds until tie total liability of the
American Bonding company, amount
ing to $25O,000. was exhausted. This
the American Bonding company held
TO be a breach of contract on the pant
of the territory and refused to pay
the territorys losses. Attorney Gen
eral Simons then began suit against
the company to recover, and the case
was heard before Judge John II. Bur
ford. with judgment for the territory
The American Bonding company
claims that when they made a con
tract with the territory, 1t was with
the understanding that the other bond
ing companies would be equally liable
with it in case of loss and they Will
appeal the case to the Oklahoma su
preme court, and afterward II neces
sary to the United States supreme
court on this point. The attorneys
for the company maintain they fullS
expect to win the case in the higher
courts.
1t is believed by several Of the ter
ritorial officials that the bonding com
panies are resisting payment on tE$
losses, until the defunct bank has eX
hausted all its assets and has paid it'
total amount of dividends. Receiver
Chas. r.. Cherry only recently an
nounced the payment of an additiona
10 per cen dividend in the near III
ture, and only pending court cases
against the receiver prevent the I'm
mediate payment of a much large
dividend.
One of the main assets of the de
funct bank is the Norman Sanitariun
company, which has the contract 10
maintaining the insane patients OF TN
territory. The majority of the com
pahy-s stock was held by. the banI
when it failed, and as the asylum i
paying a handsome profit, it is figure
that if the contract for malntainin
the insane should be left with IN
company for two years longer, tina
the bank in dividends could pay ou
almost in full, or at least 70 per cen
II such a thing should result, the
the bonding companies would max
money by resisting payment until sue
a result is certain.
During the last term OF court here
Judge -Bayard II .Hainer gave 1ud'
ment against the banks receiver an
IN favor of the territory for Sls.oO