The New York herald., 1879-03-08
FREDERICK A. FREEMAN'S. CASE.

Ah0UMENT BEFORE THE bUPREmE ooohr, oEN-
ERAL TERM, ON THE APPEAL FROM THE ORDER
REFUSING TO vAcATE THE ORDER OF ARREST.
Mr.. Frederick A. Freeman. under the escort Of his
custodian, Deputy Sheriff McGonigle put in an
appearance yesterday morning in the Supreme Court
General Term. The occasion Of his visit was the
argument before the Court on the appeal from Judge
Donohues order denying the motion to vacate the
order Of arrest against him. He steneod very atten,
lively to the argument. but as for any speciai
personal interest in the proceedings . stranger
from his would have thought
him the least concerned of any of the
large throng of spectators. The original suit in
cludes. in addition to Mr. Freeman, a. defendants
Sheppard Homans, Andrew w. GILL; Everett Clapp
and John g. Holland the plaintiff in the action being
Henry R. Person receiver Of the Guardian Mutual
Life Insurance Company. Mr.. Freeman. however.
was the only defendant against whom an order of
arrest issued. his bail being Axed a $3000OO In
default Of procuring which he has since the 2lst
of February last tho date of his arrest been in the
custody of Deputy Sheriff McGonigle
THE ALLEGATIONS.
The defendant. Freeman. was president Of the
Widows and Orphans Benefit Life Insurance Com
pany and secretary of the Reserve Mutual Life In
surance Company. He was the owner of q very
large number of shares Of the capital stock of the
Reserve Mutual and had the control OF majority OF
is stock. The par value OF the stock was $50 per
known to oil the defendants. Gill was presi-
dent, Clapp vice president and Holbrook was
Life insurance Company: 1t is alleged that
the three persons named conspircd to obtain
Compsnys money. and that in the execution of this
conspiracy Freeman transferred to them 1883 shares
the Reserve Mutual stock. the par value of which
was $188 1915. 1t is further alleged that there
paid for the stock thus transferred of funds of
the Guardian Mutual Life Insurance $252 500. being
which was worth less than par that the payment of
the S252 for the stock transferred out of the
OF the tSrs hs sssck s
which the payments were made were payable to
the order of Freeman. Homans and Holbrook and in
dorsed by them; that in further execution of such
conspiracy and to obtain possession of the Guardian
moneys Gill and Clapp were elected trustees of the
widows and Orphans Mutual Company and Hol-
brook secretary Of such companies; that freeman
signed as president 0f the Widows and Orphans and
Gill elected in his place. and that by means of such
transfer Of stock, payments. Endorsements and elec
tions the Guardian company. it's policy holders and
creditors were fefrauded by the defendants out Of
$37O345 23, including the principal and interest.
THE ARGUMENT. vtt
Mr.. William Man made the opening argument on be-
half of Freeman. His first point was that the affidavit
ON which the order of arrest based entirely
ON information and belief except to the alleged
facts that freeman transferred stock OF the Reserve
company to three Of the other defendants, who
officers of the Guardian company. and received In
payment check of the latter company to his order
Tor $4,000. which paid. from the Guardians
funds and that the Guardian company had not at
the time sufficient reserve to meet its policy obqa-
tions He insisted that the charge of conspiracy
o conclusion worthless unless supported by facts.
The statement that the defendant knew that the
Guardian company had not then sufficient reserve
to meet it's policy obligations he characterized
mere Inference The Statements as to the widows
and Orphans company and that Clapp. Gill and Hol-
brook were elected officers, he insisted were not ma
ton beside the mere stock sold was given for the
money received. His second point was that the
cause of arrest stated in the order 'that the de-
fendnnts fraudulently conspired together to cheat
and defraud tho Guardian Mutual Life Insur-
ance Company its policy holders s and, and cred ed
provisions of the Code. and therefore that the
arrest should be vacated. His third point WINS
Of arrest is fraud, there ID fraud shown on the
part Of Freeman. His concluding points were, that
whether the sale of the stock by Freeman sale
to Gill, Clapp and Holbrook or to the Guardian
pany Of which they officers, there no fraud
Was Obtained are grossly insncient to show fraud
and that mono is shown. His speech was quite
lengthy and he enforced his points by citations Of
WHY THE ORDER SHOULD BE MAINTAINED.
Mr. w. G. Trui in response. spoke ut equal length,
tnorisios in support Of his argument He claimed in
the first place that 1t s well settled that motion
vssts an m order OF arrest upon the upon
charged. His next point was that tho afhdavits
upon which the order appealed from granted
part Of Freeman and others to defraud the Guardian
Mutual Life Insurance Company. The transfer OF
o y sna c
payment of more than $250.000 out Of tho Guar
dams moneys with the knowledge Of all the
defendants the election of Gill and Clapp trustees
| of the Widows and Orphans and Reserve Mutual;
the resignation of Freeman president of the W i'd
| ows and Orphans and the election Of Gill In
| his place, he urged, established beyond all
question concert OF action and combination on the
part of Freeman and his codeendants The intent to
defraud was. he further insisted. manifest from the
fact that . consideration for their various acts
there was paid with the knowledge assent Of all
the defendants s252 800 Of Guardian moneys without
| q shadow of benefit to the Guardian. it's policy
holders and creditors He confidently submitted that
IL ever there of fragrant fraud. in which 1t
incumbent the person charged to rise and ex
| plain, this the
At the close of the argument tho respective coun-
sci passed up their briefs for the eisurey inspec-
ton of the Court preliminary to giving ts decision.