The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-05-08
Suit Over Bonds Comes Up Next
Wednesday.
Question About Liability in
First National Loss.
BONDING CONCERNS.
One on Bank Bond, the Other
on Kelly's.
Ex-Attorney General Coleman
Handles Case for State.

Thomas Todd Kelly, former state
treasurer Of Kansas, is in town con-
ferring with the attorney general and
ex-Attorney General G. G. Coleman
about the prosecution of the case
against the Fidelity & Deposit COM
pany of Baltimore, which is set for
the Shawnee county district court
next Wednesday.
Mr.. Kelly is anxious that the
Fidelity & Deposit company should be
stuck" for the $4,000 which the
state is out on the Devlin failure, for
if the decision goes that way, Kelly
will be ''vindicated," in that the state
will not lose anything by his practises
while in the Office of state treasurer.
The Fidelity & Guaranty company
was on the bond of the First National
bank for 100000, to insure the safe
return to the state Of state moneys
deposited therein "in process of col
lection" OF course the company will
claim that the money which Kelly had
in the First National was not in pro-
cess of collection; that it was simply
left there as a deposit, and 1t may be
that some sensational evidence will
be produced to show that interest was
paid on this deposit. Under the law,
the state treasurer could not deposit
state funds in the banks. All he
could DO was TO make coilectioils
through the banks. Yet at the
time of the failure, there was $780,
900 of state money in the First Ma
tional.
OF this s55o,oOo. the assets of the
bank paid off all but 100000, and
Kelly would like very much to see
this $4,000 replaced in the state
treasury, and he wants the Fidelity
company to replace it. However, if
the court finds that the Fidelity &
Guaranty company is not liable, then
the trial of the case against the Title
ton will be taken up. The Title
Guaranty & Trust company was on
Kelly's personal bond for 100000
Rather than not have the money re-
stored to the state, Kelly might be
willing to have the case go against
the Title Guarantee company. If the
court found that 1t was the business
of the Title Guaranty & Trust com.
pany to pay the loss, 1t would in.
volve the conclusion that Kelly ha6
been ~derelict in his duty as state
treasurer, and of course that is wha
Mr.. Kelly wants to avoid.
However, somebody ought to pay
the states loss. If the company
which bonded the bank was MOI
| liable, then it must be that Kelly was
acting contrary to law when he placed
the $550,000 in the Devlin bank, an6
the company which was on his bono
should pay. Apparently the state has
100000 protection for its shortage.
Attorneys for the state are confident
! that they will recover every dollar o1
| the shortage. In view of the fact thai
the case was started by c. c. Coleman
when he was attorney general, it i.
| likely that he will be in charge of the
states case Wednesday. He will bt
assisted by John L. Hunt of the Glee6
! law firm. At the time of the treasury
scandal, when there was some tall
that the governor might forcib1y ejec
Kelly from the office of treasurer, the
! governor hired Mr.. G1eed as specia
! counsel in the case, and also called IL
F. L. Williams of Clay Center, Mr.
| Coleman's law partner. 1t was ap
| parently through the influence O.
these men that Governor Hoch wa
| persuaded to keep his hands off, ant
| allow Ke11y to retain the Office