The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1906-07-24
American Surety Company May
Be Ousted From Kansas.
superintendent Luling Claims
Acts Are Irregular.
REFUSES ITS BONDS
len Discharged for Any Cause
Cut Out.
Must Give Reasons for Its Acts
in Kansas.

It is possible that the American
Surety company of New York city. one
of the largest concerns in this country,
| and probably in the world. which is
engaged in the business of furnishing
bonds for the fidelity of employees, viii
be prohibited from doing business In
the state of Kansas because of the
| arbitrary manner in which the COM
pany refuses to bond a man for en-
ployment with company when he has
been discharged by another company
doing business with the Surety COM
pany for a breach of service which
does not involve any wrong doing on
the part of the employe so discharged.
At any rate the American Surety
company has been asked to show
cause by Charles H. Luling. insurance
commissioner for the state, why its
right to do business in the state should
not be forfeited. This move has been
made by Mr.. Luling on an opinion
given to him by Attorney General
Coleman that the surety company Is
violating the laws of the state when
it refuses TO bond a man under the
1 conditions stated and that unless II
! complies with the la Wthe insurance
| commissioner has the power to declare
/ its certificate and right to do business
/ in the state forfeited.
Surety or bonding companies, are
under the jurisdiction of the insurance
commissioner of the state. and he mas
l'received a number OF complaints OF
1 late from men that they have been
| unable to secure bonds necessary to
obtain employment because OF their
/ discharge by companies, for no wrong
I doing but merely breach OF service,
and because of their inability to get
these bonds they are practically pro-
4 hibited from obtaining employment IN
i positions where they are 4am1l1ar Win
I The work In other words, they nave
to seek new fields for labor, because
! If one surety company refuses them
4 bond all the other surety companies 90
likewise The American Surety COM
! pany does a big business in bonolhs
the employees of railroad and express
| conapanies and If man discharged by
one of these companies he is unable to
get a bond which he would have to
| obtain before he could go to work for
another company
Mr.. COIeman's Opinion
Commissioner Luling thought that
this condition of affairs was great
/ Injustice 10 men who lost their places
through no act OF wrongdolng ana aILsI
considering the matter thoroughly ne
| beea mes convinced that he had the pow
er-to revoke the privilege to do busi-
ness in this state of any of the surety
companies which acted in this manner
He singled out one particular case
!
and asked Attorney General Coleman
/ for an opinion in the premises. Mr.
I Coleman has replied in an opinion
which reviews the merits of the partic-
Mar case at issue and which sustains
! Mr. Luling's ideas as to his powers, Mr.
| Colemans opinion follows;
sYolIr communication relative to cer-
tain contracts and Arrangements con-
/ cerning bonds of employees existing be-
tween the American Surety company OF
New York. the Pacific Express COM
pany the Missouri Pacific Railway
| company and other companies, has been
examined by me.
Your inquire as to your power in
matters looking to the revocation OF
the power of the Surety company 10
transact business iIr this state on ac-
eount of being a party to such con-
tracts and understandings. The matters
pertinent to this inquiry stated by you
are:
/ contract with all, or many OF the ex-
press and railroad companies of the
state to bond their employees.
(2) That the express company ana
railroad company mentioned in this in
stance under their agreement with the
| surety company do not and will not
accent the bond for the faithful per-
fornance of duty by an employe US
less it is a bond signed by the Amer
| lean Surety company.
(3) That such bonding is accom-
| p1ished not by individual bonds, but by
| a blanket bond including all employees
| of the express company and given by
the Surety company to the company or
companies employing the men.
(4) That upon any breach of duty
upon the part of the employees. such
acts are reported by the employing
company to the surety company
(5O That the employees of the ex-
press- company are usually also en-
/ Dloyess of the. railroad company which
carries the express for the express
company
(61 That where trouble arises be-
tveen. an empIoye and the employing
| company that the surety company re-
! fuses to accept such employe as a fur
ther risk when working for any other
express or railroad company, and be-
cause of such fact and the agreement
previously noted, such employe is pre-
vented from obtaining any employment
from this or like companies of the
state.
(7) To this general statement Of
facts may be added that in the case IN
which the complaint is made the re-
suit Of the operation of these contracts
and understanding was to do a great
| injustice to 8 man, who 1t Is admitted
by the companies and your statement
has been entirely innocent of any
wrong doing. Because an express
package had passed through his hands
to which there was afterwards discov-
cred shortage, the company annuIed
his bOnQ because OF MS refusal 10 MAKE
the loss good. although it admitted at
the same time that the fault is not his.
It sought to charge him with the LA
bility because OF a claimed RESPONSE
bi1itv on his part on the acts of an in
ferior emp1oye who worked under his
direction.
It Is Really Insurance.
1T will be noted in the first place
that the contract between the Surety
company and the Express company Is
one really OF Insurance. The IeEislaturs