The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-08-26
SUES ON BONDS.
Attorney General Coleman
Makes Move to Collect.
Brings Action Against Sureties
of First National.
THREE SUITS STARTED
One Is Against Treasurer Kelly's
Personal BOndsmen.
Has Failed to Secure Settlement
From Companies.
SUITS STARTED

Late Friday afternoon Attorney Cen
eral C. c. Coleman filed in the Shaw
nee county district court the three long
expected suits against the various
bondsmen of State Treasurer T. T.
Kelly
Suit No. 1 is against the Title Guar
anty and Trust company of Scranton.
Pa, and is for 100000.
No 2 is against the United States FL
deity and Guaranty company of Balti-
more, which bonded the First National
bank for the sum of $25oOO0
No is on the personal bond for $780,
600 given by VIM. Sims, c. e. Noel, w.
u. Rossington and C. ]. Devlin, officers
of the First National; as a supplement
to the Fidelity Guaranty and Trust
company bond.
These cases will be on the docket at
the September term of the district
court. They will undoubtedly be APP
pealed to the supreme court, so it may
be a year or more before a final decis-
ion is reached. Eugene Hagan has been
employed for the defense of the Title
Guaranty & Trust company. The state
is represented by Attorney General c.
g. Coleman, Mr.. Coleman's partner and
the governors private secretary, F. L.
Williams, and Gleed, Ware & Gleed.
The Title Guaranty & Trust company
suit promises to be the most interest
ing Of the three, because this was the
company which was on Treasurer
Kellys own bond. No suit has been
commenced against c. j. Devlin, the
other 100000 surety on the Kelly bond.
In the suit against the Title company,
the state takes the hat-footed position
that Treasurer Kelly had no right to
deposit the states money in the banks
in the way he did. The petition says;
During all of said time it was the
duty of said Kelly as treasurer under
the laws and statutes of the state of
Kansas to keep safely in the state
treasury without Ioaning, using or de-
posting in banks or elsewhere all mon
ey5 belonging to the state and all public
moneys of whatsoever character paid
into said treasury or otherwise, and at
any time placed in his possession and
custody as such state treasurer. until
the same should be ordered by the
proper department or officer or officers
of the state government to be trans
ferred or paid out according to law;
and it was further, during all of said
time, the duty of said treasurer when
ever such orders for the transfer or
payment should be received, faithfully
and promptly to make the same as di
rected.
TT was the duty of said Kelly as
such treasurer to1safely keep in said
treasury all moneys and all funds of
the said state and of the several depart
ments. agencies officers and commits
SiOnS thereof and not to loan, use or de-
post in banks or elsewhere the public
moneys or funds, or any part thereof,
and not to leave said funds or moneys
in possession or under the control of
any bank but to keep and have said
moneys and funds in said treasury
ready for use and payment according
to law and faithfully and promptly to
pay over the same and account therefor
upon the order of the proper officer or
agency of said state.
The petition sets forth that Kelly
had $547.000 in the bank at the time
of its failure. and that said sums of
money were all put in one account or
fund and all said sum by and with the
knowledge and consent of the said
Kelly and under some understanding
between the said Kelly and the said
bank, the precise terms of which are
unknown to the plaintiff, were mingled
with the other funds of the bank and
were Unfortunately used by said
bank in the conduct of it's banking
business. And said Withdrawals were
made from the said general account or
fund and no particular or specific part
of said moneys was left in, or with
drawn from said bank"
It states that the treasurer was au-
thorized to deposit checks and drafts
for collection and when the collections
were made it was his duty to take the
money from the bank and safely keep
1t in the state treasury. Instead the
money had been left in the bank for
many weeks and in some Instances
many months. AS Kelly has failed,
neglected and refused to paY the mon
ey to the state the court is asked to
render judgment against the defend
ants for 100000.
The suits against the Fidelity COM
pany and against the personal bonds
men of the First National. the state
is obliged to take little different tack
in its petition. It does not assume that
the state money was illegally on de-
post, but it says that the banks did
not take proper precautions to protect
the checks and drafts while they were
in the process of collection. The
claim is then set forth that the failure
of the bank resulted in the loss OF E
large amount of the checks and draf
in process of collection, and that the
bondsmen are responsible. The only
difference in these two suits is tn
amount of the bond
Treasurer Kelly of course has claim
ed all along that he had a perfect righ
to deposit the money in the banks a!
he did. The Title Guaranty & Trus
company, Kelly'S bondSman will talk,
also claim that owing to the derelictio1
of the governor, secretary of state anC
auditor, the treasury examination
called for by law were not made; tina
the bond was given under the assump
ton that the examinations should b.
made, and that having failed to dis
charge its duty, the state relieved tn
bonding company of its liability.
There has been a good deal of della
in bringing these suits for the reasol
that Attorney General Coleman ha
been trying to get the bonding com
panies to agree to a settlement In
stead, the bonding companies have de
cided to make a fight of it. and it nov
becomes a strictly legal issue.
n.