The sun. [volume] (New York [N.Y.]) 1833-1916, 1879-02-25
F. A. FREEMAN'S ARREST.
STILL LOOKING FOR THREE HUNDRED
THOUSAND DOLLARS BAIL.
Deputy sheriff McGonigaI Keeping his Pri.-
one- in strict Connnement-The Rumors
Of the Possible Arrest OF Other Persons.

Frederick A. Freeman, the ex-Prcsident OF
the Widows and Orphans Life Insurance
Company, was busily engaged yesterday under
guard OF Deputy Sheriff McGonigal. in trying
to find the 100000 bail required by Judge
Donohue in the suit brought against him by
Henry H. Pierson. receiver OF the Guardian
Mutual Insurance Company. Mr.. Pierson
charges that Mr.. Freeman. In company with
Andrew W. Gill; Sheppard Homans. Everett
Clapp. md Mr. Holbrook conspred to dcfraud
the Guardian Mutual Insurance Company by
using the funds OF that company to pay $751;
/ 600 for stock OF the Widows and Orphans and
| Reserve Mutual Companies. which. even at par.
would be only worth about sss 900. while in fact
| II was worth less than par Mr.. Freeman and his
associates managed the three companies be-
tween them. and the substance OF the claim
against them Ia that before the Guardian In
surance Company failed they managed by a
mutual arrangement to transfer tho stock so
that in their capacity ns trustees. they really
bought stock OF themselves and paid for II with
the money OF others intrustcd to their caro-.
Up to the time Of the closing Of the Sherifr's
| ofilce yesterday. the requisite bondsmen were
not forthcoming. and Major Quincy believed
that Mr.. Freeman would have TO pass another
| night in the custody OF Mr. McGonigal
In order to furnish the required 5000. 900 bail
II will be necessary to secure bondsmen who
will qualify in double that amount or 100000
This is the largest bail required OF any prisoner
since the time OF the Tweed Ring.
Mr.. Person who brings the suit against Free
man and tho others was in Albany yesterday,
engaged in an effort to secure some legal method
| Of dividing. among policy holders OF companies
OF the Insurance Department This has already
| been source Of much litigation.
Mr.. McGonigal kept his prisoner so close yes
| terday that his repiy to Mr.. Persons complaint
| gould not he obtained from his, own lips. but
| Mr.. Albon T. Man. of the firm OF Man & Parsons.
who have charge Of the defence TO Mr.. Persons
suit. said that so far as he could discover. the
transaction complained OF as conspiracy was
them. to. those who had right TO buy
was above the market rate and thought i very
strange that the failure Of the Guardian Mutual
should he attributed to that transaction. which
occurred seven yenrs ago He said II was
especially unfair t. Judge the case on tho ex
course could know nothing personally OF the
sale OF the two companies to the Guardian
course would he taken by the defence hut AS
sorted positively that there is a good and valid
defence, which will be put in at the proper time.
made Ia get Mr.. Frecman's bail reduced.
Although rumors were rife tnat other parties
OF the sherfrs office. Mr. Everett ClapD. one
OF the alleged consprHtors, said last night thai
he regarded the publication oi the charges
against himself and the others as ltbrlous. He
declared that the avermentS IN the news papers,
with reference to the arrest OF Mr.. Freeman
wore misrepresentation. as far MS the Guardian
officers were concerned In March 1872. Mr.
| Freeman made proposition TO Mr.. Gill. Presi-
dent OF the GUARDIAN. to sell to the Guardian.
the Widows and Orphans and the Reserve
Mutual Companies. Mr.. Gill submitted the
proposition to the trustees Of the Guardian
which. after consideration. was accepted. Mr..
out the sale aud they did so. The money for
the stock was paid by the Guardian. The stock
was received by the Guardian. and has ever
since been in the possession Of the Guardian
and Mr.. Pierson now holds them as receiver
put in the namc Of MIR. holbrook. or Mr.. Gill or
Mr.. Clapp, that was merely in their capacity rs
trustees. 1t was merely formal matter. as
neither OF those gentlemen was over the owner
oi ihe STOCK except ~ s trustee ,.,.. ..
, officer OF ths Guardian ever received any Dene-
III from this sale. while the Guardian company
There never was any agreement in reference to
who should be the officers Of the company; but
after the sale TO the GUARDIAN. was appointed
brook was made Secretary. There was no
previous arrangement that we were 10 be- ap-
pointed. There was no conspiracy OF any KIND.
> no underhand work no secrecy in tho transac-
tion. 1t was all open and above board. dis
cussed by the directors and authorized by
, , them. Mr. Gill and myself acted only rs ofll-
] Gers TO carry out the Will OF the directors The
1 Guardian also purchased Uher companies. The
: directors Of the Guardian at thnttime were some
; OF the first men In New York. Among them were
WWW s. 3PdySee $ Homans Dr. R1 reGEea% ,Sa J..
, chase which the Guardian made i became the
owneI Of the entir, assets q the Widows and
= includ nR the 100000 which those companies
had on deposit with the Insurance Department
I ut Albany. These assets are now in the hands
! OF the receiver, Mr.. Pierson.
After the Guardian Company bought these
1 other companies it WAS itself bought by the
! Universal Company. but as The assets could not
l be- brought under the New York State law. the
Guardian went into the hands OF the receiver.
have no doubt that ali / have said will be On
dorsed by Mr.. John HolbrOok of lO4 Madison
avenue. who was secretary OF the Reserve Mu-
. How IS il that the Guardian came to fail II it
I made SO much money out OF the purchase OF
When we took the Guardian il was, il per
r When we LEFT it, it was only II per cent. cats
) and dogs and s3 per cent. cash
, What do you mean by cats and dogs Is
I that technical expression In insurance mat
o =" Oh. no. L" said Mr.. Clapp. laughing. I mean
that to indicate such items as amounts due
2 from agents and the like"
g And you think this action against Mr.. Free
! man Will amount 10 nOthingW
? "Wol they may want 10 drive at Freeman
a and squeeze him, but the sale TO the Guardian
= was fair business transaction"
Superintendent Smytha Of the Insurance De-
a partnent was in the city yesterday. but was abb
y Mr.. Freeman was in room 10 at the Astor
II House last evening. but declined to SEQ II SUN
reporter. The Sheriff Will allow him moretim
TO procure bail, aud ii is probable that strong
effort Will be made to have the bail reduced.
ALBANY. Feb, 24.-rhe papers in the suit
' 1cers OF the Globe Mutual. have been taken to
New York, The Attorney. General is expected
TO arrive in the city IRON Washington to-mor-
: row. The Freemans aro the officers reported
: against by Mccall II is somewhat singular that
Il the report made last spring should be held by
. the Superintendent until the present time, and
at this late day sent to the Attorney General
g The letter of tho Superintendent transmitting
n McCals report is n pitilul affair. claiming nc
: jurisdiction. and asking the Attorney General
7 10 examine and sea what ought to be done. II
+. is an effort Vf the Superintendent to shirk re-.
r sponsibillty. Nothing would have Deen heard
OF this matter even now. had IL not been Tor the
=; resolution offered by Mr. Terry. calling for a
u copy OF the document which the Assembly
v promptly adopted After the adoption of the
, resolution. Mr.. Smyth was disposed not to send
i the document To tho Assembly. He consulted
r. with his counsel. Senator Harris, who advised
- him to comply with the resolution which he
o did. The agitation that has since followed
II 40 alarmed the Superintendent that be finally
= sent a copy to tho Attorney General That on
= ca on examining it, at once reached the con-
10 cusion that. under the state OF facts there emu
- merated. he had no alternative but to proceed
at once in the courts for the removal Of the on.
U GERS for breach of trust The proceedings would
have bnpn begun on Saturday If IL had not been