The sun. [volume] (New York [N.Y.]) 1833-1916, 1878-05-10
THE MOVES Trial.
Judge Depue Explains Reinsurnnce-Ex-
President stedw eis Testimony.

The trial Of Benjamin Noyes was resumed
before Judge Dcpuc in Newark yesterday. The
question of what reinsurance is having been
raised. Judge Dcpuc gave the following opin-
ion. which WAS listened to with interest by the
insurance men present: Reinsurance il con-
tract that Is made where an insurance company
has taken larger amount Of risks than 1t can
safely carry, and wishes to indemnify itself. 1t
is settled by law that one company has no power
TO transfer its assets and liabilities to another
company; In other words 10 amalgamate. 4
bank may get it, surplus discount notes rcdis-
counted 10y another bank. but it would have no
right To- transfer all Its assets. business. &c.. TO
another. 1t Is clearly Illegal for insurance
companies to amagamatc or consolidate. for
that is not reinsurance. Directors Of insurance
companies are only agents and without unani-
nous consent of the stockholders cannot trans
fer the assets Of the company. In the case Of a
mutual company, in which the policy holder has
right To- pay for his policy. and also to share in
Tho profits, il is criminal for the officers to tram
fer the assets under the prctence that another
company will assume the Liabilities. and single
dissenting policy holder may obtain an inJunc-
ton against thu transfer. The renl question in
this cau-" L. whether tho attempted cousrlldu-
ton 10 the New Jersey Mutual and tho National
CAPITOL WIS AN honest mistake or device To- de-
fraud the policy holders. The Indictment
/
all the facts i'm the casa.
EN President J H. Siedwc was called to the
could not testify because he was indicted with
Nuyos was uNcrrU'"d. lie testified that he met
ylous 10 that time the assets Of the New Jersey
Mutual. calculated on the IA per cent basis.
! show that the company was insolvent. under
| 10000. The New Jersey Mutual had reinsured
! the Crafts mans, Hopr, Continental. and Her
| cules and the dues from tire agents Of these
/ e. l.
! claims against th"s" ng"n Ms amounted 10 sew
era 4tu u, tngAs9 IA Ionars. ,,,,,,., $780,.
| the absolute owner Of sGs 900 IN Government
| bonds but II had 1892 900 worth AT tn" time ~
had been hypotherat"d for loans. The eN-
penses 81 the company were very large for the
Iast lpur months 81 1910. anu me receipts small,
To meet death claims. After Kelscy's examina-
ton. the comments Of the press and the general
feeling OF Insecurity reduced the rec .ipts
| At nm alarming rate; Finding that the examine
| ton would show deficiency. and falling 70 SCI
| cure more capital. the witness and Vice Presl-
| United stntrs the onion Mutual the uivrr-.tl
| the Glorc Mutual and six other com uuics. o.
reinsure the New Jersey Mutual. and the fact
| was well known IN Insurance CIRCLES. After thr
| for the New Jersey Mutual. he sent for Noycs.
| and they met in the ohice OF the World In.
surance Company, on Broadway ami adopted
The New Jersey Mutual had nominnlly ss7 900
| worth OF Government bonds On its hooN, ms an
Offset for the SlOO,uOO guarantee cash capital
stock. The 100000 stock was issued To L. W.
| Frost and others, and the So 900 IN bond were
| security for IT, Is the ionds had been held rs
the property ~ Mr. Frost. il became necessary
10 account for them, hut II was never intended
| To- convey them To Noyps because they did not
| belong 10 the company. Ii WAS arranged with
| Fay Noyes's counsel. that the 49, 900 IN bonds
should be used To represent purchase of tluu.-
Ouu stock. leaving matters substantially Is II the
! bonds remained. Fay said that NOyrs under
stood TINS ana would sign the receipt Tor we
not deny IT, Fay told witness frequently that
| Noyes promised him $4,000 for his services.
AMI he demanded that witness should have
| $4,000 in cash when the transfer was made,
! subsequently he agreed to accept $4,000 in
cash and an $4,000 mortgage.
| AT 1 o'clock IN the afternoon Of Jan. 20, 1871,
| the witness met Noyes Fay l.. ". Frost H. c.
| Frost. ID. j. Noyes and Messrs Walker. Thorn,
and others, at the office Of the world Life In
surance Company IN Broadway. All Of these
| gentlemen were not engaged in the business
Transacted although they were interested. The
| witness drew up receipt, and took the assets
| e n table at which Benlnmin Noyes was seated.
| NOyes called on the the items from the receipt
and the witness handed over the bonds. mort
Cages, &c. rs they were called, with the exeep-
| ton of the premium notes and furniture, which
| would pass over To him when he took posses,
sion OF the company. The witness SURRENDERED
! ~ NOyes: United States bonds $4,000; LOuisi-
ana bonds, 10000; Virginia bonds. f4.sOQ'
cash. $4,000; premium notes. 1922 900; evil
! dences of Indebtedness amounting To $4,000
| assignments OF mortgages. t425,i5s. OF which
$3.50 900 were held by the State Department
| deeds II all the real estntc also special de.
posit OF 81 / 900 in New York State bonds. and
| $1,000 in virginia state bonds. Noycs signed
| in bonds and the 100000 IN cash. which witness
| placed upon the table. The 100000 consisted
of n check Of the New Jersey Mutual for sl2 uuo
| drawn on the Chemical Bank. and the persona
check OF the witness for $4,000 The witness
check was returned to him by Fay, but he could
not say who took tho bonds and checks from
the table upon which he left them, He did no
SEQ NOyes tnke or touch them. All the other Sc
curities were put into tin box by Noyes ane
taken away.