Devils Lake weekly world. (Devils Lake, N.D.) 1911-1914, 1911-08-25
MATTER WITH REFERENCE TO
ANDY JONES INSTITUTION
TO BLAME.
BANK WAS DESIGNATED AS A
DEPOSITORY OF NORTH DA-
KOTA STATE MONEY,
Bonding Company Failed to Make
Good the Loss of State Money Which
Was on Deposit in Bank-Matter
Has Been in Court Several Times
Bond Company restrained.

Bismarck, N. D., Aug. 1s.-On the
strength of information from the Unit
ed States treasury department at Wash
ington Insurance Commissioner Taylor
has suspended the Federal Surety Com
pany of Indianapolis, Ind, from do
ing business in North Dakota until the
demands of the federal government
have been complied with. The letter
from Washington states that the COM
pany has been ordered to suspend op-
erations until a full investigation of
its affairs may be made.
The Federal Union is on the bonds
of some county officers of North Dako-
ia and is used by banks to secure the
deposit of state funds.
It had in risks in this state, accord
ing to its 1910 statement $57, 500, and
it collected in premiums $2S7.5O.
The state now has Judgment against
the Federal Union Surety Co., on an
indemnity bond for the defunct Rug
by bank.
Unless its matters can be speedily
adjusted the company will be forced to-
the wall, and the bonds held in this
state will be greatly weakened. It is
highly probable that the state auth
critics will require new bonds as sure
ties where the distressed company is
involved.
The president of the Federal Union
Surety company is Winfield F. Dur
bin, an ex-governor of Indiana and a
man reputed to be worth half mil
lion. The directors are men of large
means and experience in business at
fairs and just how far the company is
involved a federal examination will
disclose. In the meantime no more
business can be legally solicited in
North Dakota by the company.
The action is taken as result of the
affair Of the First National Bank Of
Rugby, which became insolvent on
January 4, 1909. At the time of it's
insolvency the bank was designated as
a depository Of state funds in the
amount Of $4,000. On the day it's
doors were closed there was on deposit
in the bank $16,147.12 The following
bonds had been furnished by the bank
as security for the deposits of the
state: Federal Union Surety Company
$4,000, Fidelity and Deposit Company
of Maryland $4,000, American Bonding
Company $4,000, and personal bond
of $4,000. A bond of the United
States Fidelity and Guaranty Company
was also deemed security for the depos-
it's. Suits were instituted against the
United States Fidelity and Guaranty
Company and Federal Union Surety
Company, and the Fidelity and Deposit
Company of Maryland to recover the
entire amount Of deposits in the bank
at the time of its insolvency. Between
the time that the affairs of the bank
went into the hands of its receiver
and the time the cases were tried the
receiver paid $6,460.45 dividends. The
cases were tried in April 1911, before
Hon. S. L. Nuchols, Judge Of the 10Th
Judicial District, sitting for Hon. w.
H. Winchester, and it was held that
the sureties of the bank were not re-
sponsible for the full amount of SIG
147.l2, but only to the extent of $780,
900, which was legally on deposit in
the bank at the time of its failure,
and further held that the state was
not entitled to apply the entire amount
paid in dividends to the payment OF
amount paid in dividends should be ap
| pOrtlOned between the state and the
sureties, so that the entire liabilities
of the sureties, after applying the
share of dividends paid, was $6,645
Judgment was rendered for this
amount against the Federal Union
Surety Company and the Fidelity and
Deposit Company of Maryland. The
balance remaining unpaid with interest
at the date Of the entry Of judgment
July IS, 1911, is approximately $4,000