The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1910-02-12
Surety Company Held Liable for
Devlin Bank Loss.
Kansas to Be Paid One Hundred
Thirty Thousand Dollars.
TAX LODGE PROPERTY
But the 'sHOmes" Are Held Not
Taxable.
Limited Custer Against Har-
yester Trust Ordered.

The United States Fidelity and
Guaranty company must pay the
state of Kansas $139,OO3.06 as the
amount of money which the state
lost in the failure of the First Ma
tional bank, c. J. Devlins institution
and interest for the time the state
has not been able to use the money.
The supreme court of Kansas today
handed down it's decision sustaining
the district court of Shawnee county,
and ordering the company to pay.
The decision of the lower court in
the case is upheld by the supreme
court.
When the First National bank fail
ed the state had on deposit $547,-
575.06. t. T. Kelly was state treas
urer and made the deposit. After the
failure the receiver paid out of the
assets little more than eighty per
cent of the total deposits. This left
$98,530.01 due the state.
T. T. Kelly gave bond in the
Guaranty and Surety company and
the bank had given the state a bond
in the United States Fidelity and
Guaranty company. AS the money
was in the bank the states attorney
brought suit on the banks bond first.
The district court held that the bond
ing company for the bank was the
one responsible for the safety of the
money and held that it should pay
the state. The supreme court sus-
tained it and the decision means that
the company as surety for T. 7. Kel-
ly need not pay.
In the syllabus the court holds:
The surety on the bond of the de-
positary bank will not be heard to say
that there was an illegal agreement
between the bank and the treasurer
that state funds should remain in and
be used by the bank for long periods
oftime after collections were made, nor
will any improper action of the bank
in keeping the accounts of the state
or in handling the deposits lessen the
liability Of the surety.
The bond in question. if not in strict
compliance with the statute.s has ali
the elements and binding force of a
common law obligation and the bank
having by means of the bond secured
possession of the state funds, neither
it nor the surety can escape liability
for non-performance of the conditions
of the bond
The supreme court today rendered
three important decisions involving the
right of the state to tax lodge prop
erty. 1t held that the Masonic home
at Wichita was exempt from taxation
being a charitable institution, but that
the home of the Grand lodge of Ma
sons at Eighth and Harrison streets
Topeka. and the home of the Summun-
dowat lodge of Odd Fellows, at Kan
| sas City, Kan, were taxable, because
they were not used for charitable pur-
poses. In other words the Masons and
| Odd Fellows are not charitable insti-
tutions in themselves, but they may
maintain homes which are charitable
and not taxable.
These decisions were practically the
same as printed some days ago. BY
| mistake a stenographer in the supreme
court gave them out in advance
Three separate cases involving the
| taxation of the property of the fra
ternal societies were submitted to the
court at the same time in October. All
| involved the same propositions and
| there were no new points raised in eth
| er case. One was a suit from Sedgwick
county, another Shawnee county and 3
third from Wyandotte county. Two in
volved the Masons and one the Odd
Fellows.
| In Sedgwick county Judge Thos. C
Wilson of the district court held that
the taxation of the Masons' Orphans
| home was legal. The home is used ex-
clusively as home for orphans of Ma.
/ -