The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-02-07
Governor Hoch Issues Ultima
tum to Bonding Companies.
Refuses to Approve Security
Offered for Officer.
WON'T PAY THELOSSES
Arises Out of State Claim in
First National Bank.
Also Takes Steps to Revoke
State License.

Governor Hoch started in this morn
Ing TO make trouble for the two bond
Ing companies which between them owe
the state $4,000 on the First National
bank failure.
He refused to approve the bond Of
D. NJ Wilson. state dairy commissioner.
which was given by the United States
faoenty and Guaranty company, the
same company which was on the First
National bank bond for $25O,0OO, and
which company is fighting the suit
brought by the state
But Governor Hoch went even further
than that. He went to the office of the
insurance commissioner for the MR.
pose Of requesting Charles Barnes. in
surance commissioner to revoke the
licenses of the Fidelity company of
baltimore and the Title Guaranty and
Surety company of Scranton. Pa. and
stop these companies from doing any
further business in the state Mr..
Barnes was not in, and Governor Hoch
discussed the matter with l. S. Lewis
assistant Governor Hoch will proba-
bly, send a letter to Mr.. Barnes, re-
questing him to take immediate action
to put these two companies out of bus
1nesS In Kansas until they pay their
losses to the state.
The Title Guaranty & Surety com
pany was on T. T. KelIy's bond for
$500, 600. The United States Fidelity
company, on the other hand, was on
the bond which the First National bank
gave the state as surety for the col
lection and safe keeping of state funds
panies refused to pay off the states loss
in the First National failure, and the
state sued both companies some time
ago.
81 am heartily tired Of the way these
companies have been dilly-dallying
along. They are trif1ing with the
state. First they refused to pay our
| claim; then they have used every
| means within their power to delay the
| litigation of that case. which is still
pending in the courts. 1 have used
| $500 out of my contingent fund to pay
| for the expenses of those cases, but
We can't make the bonding companies
| come to trial. I think the time has
come for more determined action. 1
! don't believe the state wants any COM
pany doing business here which re-
| fuses to at least stand up and have its
| case settled by the courts. / will ask
Mr.. Barnes, the insurance commits
| sioner to investigate this matter, and
| take the necessary action"
1t is very likely that the two COM
panies will be promptly disbarred by
| Mr.. Barnes, and will have to cease do
ing business in Kansas. This action
will tend to make it more of an object
| " Tic lWO COIIlpdIIlCS " dllOW ln6 Id w
suits against them to be tried.
| The suits brought by the state seek
1 to collect from each company the full
amount of the bond, or total of
| $750,000. They were filed at a time
when the next amount of the states
| final loss was not known. 1t is now
! apparent that the state will get back
all but about $4,000 of its $3.50, 900.
This 100000 must be paid by one of
the two bonding companies, or pos
sibly both.
The company which insured the
First National bank will claim that it
| is not liable because Kelly had no
| business to leave the states money in
| the bank in the way he did The
company which was on Kelly's bond
will claim that Kellys act would not
| have caused any trouble If the bank
had remained solvent. and hence that
it is the banks business to pay the loss
| which it's own failure occasioned. 1t
will be for the courts to decide which
one Of these companies should pay the
loss.