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Statement of the Case.

This litigation grew out of the failure of The Euclid Avenue Trust Company, a banking institution of the city of Cleveland, which was a depositary of certain funds of that city. It was appointed and designated a depositary of a part of the public money of the city for a term of three years, beginning July 1, 1907, and ending June 30, 1910, the amount of money on deposit to be at no time in excess of the sum of $250,000. This appointment was made under the authority of an ordinance of the city creating a Depositary Commission.

Among the provisions of this ordinance was one which required a bank awarded the use of the public money to tender a good and sufficient bond issued by a surety company, or to furnish good and sufficient security in a sum not less than twenty per cent. in excess of the maximum amount at any time to be deposited in said bank, the maximum amount to be deposited with the depositary in this case being $250,000. The amount of bond or security to be furnished was $300,000.

The ordinance further provided that the undertaking should be conditioned for the receipt, safekeeping and payment over of all moneys which might come into the custody of the bank under and by virtue of the ordinance, together with interest at the rate specified in the proposal of the bank, and further conditioned for the faithful performance by the bank or depositary of all duties and obligations imposed by the laws of the state of Ohio.

The Euclid Avenue Trust Company procured bonds from eight surety companies, the names of

Statement of the Case.

the companies and the penalties of their respective bonds being as follows:

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As stated by the circuit court, all these bonds were identical in form, except as to the amounts of the penalties of the bonds, the names of the bonding companies and the dates of the bonds, and all were executed and placed in the hands of the Depositary Commission of the city of Cleveland at various dates prior to June 29, 1907, on which date all were approved, the form of these bonds, except as to the names of the surety companies and the amounts, being as follows:

"American Bonding Company of Baltimore, Home Office, Baltimore, Md. Know All Men by These Presents that we, The Euclid Avenue Trust Company, of the City of Cleveland, County of Cuyahoga, and State of Ohio (hereafter called the Principal) as Principal, and the American Bonding Company of Baltimore, a corporation of the state of Maryland (hereinafter called the Surety) as Surety, are held and firmly bound unto the City of Cleveland, of the County of Cuyahoga and State of Ohio, hereinafter called the Obligee, in

Statement of the Case.

the sum of Fifteen Thousand ($15,000) Dollars, for the payment whereof said Principal and said Surety bind themselves, their successors, assigns, executors, administrators and heirs, firmly by these presents. The condition of the above obligation is such, that whereas, on the 7th day of November, 1906, the Depositary Commission of the City of Cleveland, under and by virtue of the provisions of the laws of the state of Ohio, and of certain ordinance known as Ordinance No. 44,229, passed by the Council of the City of Cleveland on the 2nd day of May, 1904, and as amended by Ordinance No. 3,084, passed by the Council of the city of Cleveland, February 6th, 1906, did award to the Principal above named the custody of a proportionate amount of the public money of the city of Cleveland in the hands of the treasurer thereof, to-wit, fifty eighteeen-hundredths (50/1800), said amount at no time to be in excess of Two Hundred and Fifty Thousand Dollars ($250,000) for a period of three years from the 1st day of July, 1907, to and including the 30th day of June, 1910; said award and said deposit to be subject to all the provisions and requirements of law, as the same are set forth in the laws of the state of Ohio and said ordinance. Now, therefore, if the said Principal shall well and truly receipt for all moneys deposited by the treasurer of the city of Cleveland, with it hereunder, and shall safely keep and pay over the same, as provided by the laws of the state of Ohio, and by the terms of said ordinance No. 44,229, and as amended by ordinance No. 3,084, passed by the council of the city of Cleveland, Feb

Statement of the Case.

ruary 6th, 1906, and shall well and truly pay all sums deposited, and interest thereon at four and one-twentieth per cent. (4 1/20 per cent.), as specified in its proposal upon which the award herein referred to is made, and shall further faithfully perform all the duties and obligations imposed by the laws of the state of Ohio and said ordinance upon said Principal as depositary of said public money, then this obligation to be void; otherwise to remain in full force and virtue, Provided, however, and upon the following express conditions: First, That in the event of default on the part of the Principal herein, the Surety shall only be liable hereunder for such proportion of the total loss thereby sustained by the Obligee as the penalty of this bond shall bear to the total amount of bonds, namely, Three Hundred Thousand Dollars ($300,000), which said Principal shall or should furnish in accordance with the provisions of the depositary ordinance of the city of Cleveland; and provided that the Surety shall not, in any event, be liable for an amount in excess of fifteen thousand dollars. Second, That in the event of any default on the part of the Principal, written notice thereof, with a verified statement of the facts showing such default, and the date thereof, shall within ten (10) days after its discovery by the Depositary Commission of the City of Cleveland, be delivered to the Surety at the address given above. Third, that the Surety shall not be liable for any deposits made by the treasurer of the City of Cleveland with the Principal herein, after the discovery of any such default is made known to said treasurer.

Statement of the Case.

Signed and sealed this twenty-first day of February, A. D. 1907.

"THE EUCLID AVENUE TRUST COMPANY, "By W. H. Crafts, Pres.

"(SEAL)

ATTEST: R. S. Thomas, Sec'y & Treas. "AMERICAN BONDING COMPANY OF BALTIMORE, "By H. H. Stryker, 4th Vice President. "ATTEST: R. C. Carson, Secretary."

On the day that these bonds were approved, The Euclid Avenue Trust Company entered into a contract with the city, of which contract the surety companies executing the bonds, excepting the Fidelity & Deposit Company, had no notice or knowledge, which contract is as follows:

"Whereas, The Euclid Avenue Trust Company has been awarded a proportionate part of the public money of the City of Cleveland, in the hands of the treasurer of said city equal to fifty eighteenhundredths (50/1800) thereof, in no event to exceed the sum of two hundred fifty thousand dollars ($250,000); and Whereas, said The Euclid Avenue Trust Company is required by law and ordinance to enter into bonds with suitable guaranty, or to make deposit of approved securities with the Depositary Commission of the city of Cleveland in the aggregate sum of not less than three hundred thousand dollars ($300,000), so conditioned as to guarantee and secure the performance of all the things to be done and performed by said The Euclid Avenue Trust Company as a depositary of the public money of the city of Cleveland; Now, therefore, this agreement witnesseth that in fulfillment of the obligation above set forth

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