, 1872-12-09

Some DAYS ago, q meeting OF the creditors OF
he Mutual Security Insurance Company G.
7aukrupt) passed resolutions asking the United
States Court to cause the removal Of the funds
If the bankrupt from the Mechanics National
Bank, in which they were deposited, setting
forth tho reasons for their petition. These rea-
sons we're, briefly that Mr. J. 7. scammon
owned large interest in the Mechanics Ma
tional Bank, and, at the same time, was carrying
On legal controversy with the Mutual Security
Insurance Company. Tho features OF this con-
trorersy are we'll known. Mr. j. y scanmon
was the Treasurer Of the bankrupt Company,
md held large amount OF its funds
at the time Of the fire. He has retained these
funds as an Offset claims for losses on policies
which he held as IN individual, and refuses to
pay the money over for the general benefit OF
the creditors and take his equitable dividend
with the others. Mr,J, 7. Scammon is also adebt-
or Of the Mutual Security Insurance Company,
which holds his notes for certain amount OF
unpaid stock, which he likewise refuses to pay
These we're the grounds upon which the cred
itors asked that tho funds Of the bankrupt
should be- removed from Mr. scammon's control.
Though Judge B1odgett has declined to enter
the rule which the creditors asked, since the
money is to be drawn out very shortly IN due
course OF dividend, he pointed1y condemns Mr'
scammon'a conduct in the whole affair. "1n
other Words" says Judge Blodgett, II hardly
think that Mr. Scammon ought to
carry on q controversy With tho funds OF this
bankrupt insurance Company, which is, In effect,
contest With tho creditors Of that Company II
the name Of the Assignee" Subsequently,
Judge Blodgett, in order to leave no doubt that
Mr. scammon is doing this, adds !" He (dr.
Scammon) would, Of courso, be benefited pro
kanto by the deposit Of funds in the bank, and
to that extent he may be said to be benefited by
the deposit Of these funds to carry on the con-
test" Ho first points out the glaring inproprl~
city Of one man using another's funds for the
purpose Of fighting him. He then proceeds to
show that this is exactly what h1r. scammon is
doing to the extent Of his interest in the Me~
chanics' National Bank, where the funds OF the
Mutual Security Creally belonging to the credit
ore) are deposited. The conclusion 49, that Mr
scammon is doing what the Court construes to
be dishonorab1o act.
There is one point which WIS not brought be-
fore Judge Blodgett's consideration. This il the
failure OF A[r. scammon to pay the creditors OF
the Mutual Security any interest on their funds,
which he is using to fight them. Mr. scammon
ovns g. banking institution known US the Marine
Company, besides controlling the Mechanics
National Bank. According to popular construc-
ton. Mr.. J. 7. Scammon, Of the Mechanics Ma
tional, holds about the game relation to Mr. jon
athan Y. scammon, of the Marine Company, as
does hIr. ]. Young scammon, Of Milwaukee, to
Mr. Jonathan Young scan,mon, OF Chicago
These relations are too complicated to be suB-
coptib1e OF explanation, but the Inference s that
while Mr. J. Y Scammon, as private banker,
ia large borrower, at high ratio OF
interest, Mr. J. Young Scammon, as stock
holder in National Bank, should scarcely have
the use OF the funds Of bankrupt insurance
companies for nothing. There is additional
reason why this should not bo so, in the fact
that other banks, Of at least equal responsibility,
which are not fighting their creditors, would
willingly pay the interest on such deposits that
| the Law authorizes.
| Judge Blodgett may have been justified, in
view OF the approaching dividend, in refusing
| to enter the rule for the removal of the funds
| from the Mechanics National Bank. But it is
not probable that Mr. scammon, who sets such
great store upon his personal honor and probity.
will further Justify Judge Blodgotts pointed re-
buke OF his conduct by continuing to hold on t1
Company. It may be charitably presumed thai
A1r. Scammon did not know any better Until
Judge Blodgett informed him how disreputable
the transaction really is.