The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1880-12-30
A Receiver Appointed.

A Receiver Appointed.
Several weeks ago we noticed that the Pied
mont s. Arlington Insurance Company had
made an assignment of its property, with Mr..
A. R. Blakey of Charlottesvilea trustee. Par
ties interested were not satisfied with this ar
rangement and asked of the U. s. Court the
intervention of its authority for the appoint
ment of receiver. The case came up before
Judge Hughes ON the 23rd in Richmond. The
State, of that date makes the following men
ton OF it. A clearer statement of the nature
of an insurance company and the relation of
such corporation to the policy holders could
not be well given. The Judge presents view
that will strike public attention with great
deal OF force, and institute cautious inquiry in
to the various insurance companies which
now, and hereafter may seek the confidence OF
the people. Ordinarily when insurance com
panies, alter operating for ten or fifteen years,
suspend, the presumption slogical that extrav-
agance, msmanagement and fraud, are at the
bottom of it. There should be legislation of a
very stringent character to protect the public
surate punishment provided rthose who may
be guilty Of deceiving those whose confidence
and money they have misused. The State Of
the 23d says:
Judge Hughes to-day In the United States
Circuit Court delivered his opinion in the
Piedmont and Arlington case, in the matter of
appointing a receiver, which is of no little in
terest to the public. The Court, after stating
the company's insolvency and reviewing all
the facts in the cause. said:
Having thus itself made case for a receiv-
er and actually anticipated court in appoint
ing one, this court is relieved from the painful
| inquiries and delicate responsibility usually
devolved upon courts in passing upon applica-
lions for receivers; and, therefore, l am con-
tronted with but single question, which is
| whether or not this court will allow the de-
PENDANT company to appoint its receiver for it?
This is an insovent life insurance compa-
nv, company which has approached thous-
| ands of men and women in the land and said,
! if out OF your annual earnings and savings
you will pay me annual premiums OF money
| during your natural lives | will at your death
pay to your widows and children certain
thousands of dollars for their support Having
received these premiums for twelve or fifteen
years down to few weeks past ii now reveals
| ~ tuc WOIlu ~ CdluO1 CoiiP'J WIN WIZ
solemn obligations which it had undertaken.
1 think that the mere fact of the failure of a
life insurance company is pr7naa tftcae proof
that its operations have been conducted in a
| fraudulent manner; and if the failure is not
explained by some great casualty such as a
widespread pestilence or sudden financial
CONFUSION, or physical calamity, think that
it is per Sc proof of fraud. will not pretend
to say that it creates the presumption OF moral
turpitude in the managers of the company,
but it certainly does of constructive fraud
that is to say, of that financial imbeclllty or
| recklessness, or extravaganza, or that gross
negligence which is equivalent in its conse-
quences to fraud, and which court is bound
to regard as constructive fraud
would the court be justified in allowing a
trustee appointed by such O. company, IN the
very deed in which it avOwed its insolvency,
to remain in the custody of its effects and to
administer them? Could the court expect
to attract and retain the confidence of the pub
lie and of its sutors, if it should sanction such
an act2 think not. The insolvency and alb
negation of the company left its effects in the
legal aid rightful custody of no one. and the
court must at once provide for the emergency
by appointing a receiver.
ut has not been the policy or practice OF
this court in appointing receivers for insolvent
companies to appoint anyone who had been
officially and responsibility connected with the
mismanagement which brought his company S
affairs to ruin: and, for that reason, cannot
appoint Mr.. Blakev as receiver here, in whose
personal integrity would otherwise have tue
utmost confidence, and whose high character
l most cheerfully acknowledge"
The Judge then announced the appointment
of Mr. A. L. Boulware, of this city, as receiver
of the company Mr. Boulware is a member
of tile well-knOwn law firm of Johnston, Will
lams & Boulware.
We have already published full abstract Of
the bill of the plaintiffs against the company.
During the whole course of the protracted ar
gument not word of disparagement has been
uttered against any officer OF the company
The argument of the case on both sides was
marked by decided ability Judge Ould. on
behalf of the plaintiffs, closed the argument
yesterday evening. In that part of his argu-
ment in support of the allegation of fraud he
undertook to show that the cause Of the deed
giving preference to securities and to pay fol
services heretofore rendered by the employees
of the company anG others was illegal, and
rendered the deed void, and that the directors
did not have authority or power to make sucl
deed, and therefore, he argued, from lega
standpoint, it was a fraud OF the law and void
and that the company, being insolvent, coulc
not make deed. Judge Old alluded to Mr.
A. r. Blakey, the trustee named in the deco
and an officer of the company, in most com
plimentary terms, stating that he had tho
highest confidence in his integrity and capac
ity, and that his character for intelligence ane
integrity was beyond question.