New-York tribune., 1884-11-02
BIG FEES FOR RECEIVERS.
THE STORY OF THE COLUMBIAN INSURANCE
FRAUDS.
now crHrAIv RECEIVERS AND IA" rcRs STRIPPED
THE WRECK.

a., acc,son has vet hcen reached the creditors
becnning to hope their rights which have so long
been di.regarded will at last be recognized ana her
xronxs redrcssed The history OF the company shows
that few worse frauds have ever been praccea uhder
she nroecon Of courts Of Law than those OF which ns
eredtors have been the victims. The company faicu
eiehieen years and the number OF "g" p't'es
which have been fought it's lfeess body woud MI
volumes of reports Its diculties began at time whch
the greatest rcckessncss characterized insurance trans
actions and its failure when Ring judges gave
legal support robberes the most stupendons scale
The company was Incorporated in 1857 with capital
OF $500 600 which afterward doubled and increased
until in 1865 the capital officially stated, was $1,000
600 When the last increase stock made. runors
were already aoat in Wall street and among insurance
men, that the affairs of the company were IN crl'ca
state and the capital had been increased 10 cover
liabilities To restore confidence statement OF tue
assets was published, which was sworn TO oy severn
prominent business Among the assets was men
toaei large amount OF cash in bank subsequent eN-
animation showed that this cash consisted in great part
of check for about SO0,o 900 which hal been borrowed
from OF the trustees, aud was returnabe the dav
after The publication Of the statement IL WIS also us
covered that the last increase of stock the law as 10
stock subscriptions not complied with lhlS state
a, affairs caused the question he raised whether the
stockholders were the eye OF the law stockholders IN
corporation members OF r partnership l. tney were
stockholders they liable for the debts oil the cor
poraion only TO the OF the stock held by each
the company could he enforced against each OF them 10
The amount of his whole fortune. After the failure of
the company of the creditors brought actions
against various stockholders the ground that they
were legally partners and therefore personally hayIe ior
an the dcots of the partnership. These eases after
being through all the courts were at last decided
by the Court OF Appeals in favor OF the stockholders.
now THE CoMPANY WAS wRScKfD.
All tho business OF the company was carried on IN
most reckless way The same vessel was insured "'
three different in three dTercut ports NO risks
were considered too hazardous As natural result IN
January. 1866. the company formally failed 1t was
then found that for year II had been really nsolyent
md ID became necessary the stockholders for the
amount ~ The dividend, which had heen paid during the
period Of actual Insolvency Julge Barnard was then
upon the bench OF the supreme Court and his orders
were the in trncnts used in the frauds prfcc'd upon
the creditors Joseph Morrison and Benaiah Leihng-
well we're appointed by judge Sutherland the first ie
cevcrs. Leftngwcn was a man OF unlmpeachaoe
honesty. but the appou tment Of Morrison was con-
sldered by many most nilUous. lie had been the
general agent Of the company outside of this city, AMI II
was thought that he OF those whose transactions
had ruined the company. aud consequently most i'm
prop crson 10 be intrustcd with the settlement Oh s
affairs. lie did not. however, remain long IN Office His
associate cns we'll forced him to resign by threaten
ing that he would himself resisn and give TO
the court his reasons for doing. In Norsons place
Jnge Barnard appointed George A. Osgood and Leing-
well diving soon after. his place filed by cyrus
Curtss.
The two receivers engaged A F. Higgins as average
adNser, and charged hm with the unravellng oi the
dofunct company's accounts Curtiss wished hat the
funds also scnld intru-tel to Higgins management
but Osgcod refused to allow this. Osgood was per
sonal friend Barnard and he actually obtained an
orler Barnard authorizing him TO place certain
sums which Curss had deposited IN one OF the trust COM
panios with his firm of Osso~l 4 Fowler Curtis.
however refused to obey the order and 1t was with
drawn.
Mr. HIGGINS had an ingenious scheme for turning tho
assets TO the best account part OF these assets
consisted OF protested notes which could not be collected
by without considerable expense but mauy
of which We're really good for nearly their face value
Mr Higgins proposed 10 sell these notes at auction
among the creditors he bid for IN claims against the
conpany In this way a number OF otherwise una
vaaie assets might have been utilized IN reducing tfe
liabilities The proposition was however, so strenuonsy
opposed by dudley ricId who had been employed as
counsel by the receiver, and whose fees aftcrwarl
amounted to $50. rs, that II was abandoned.
TrE srous OF THE RECEIVERS AND LAWYERS.
The proceeded TO settle the affairs of the
coupany after their own manner. The net indebted
ness amounted 10 abolt $7500OO, and about T6Doooo
~ cash cane into thei hands. OF this sum $4,000
were expended in the settlement OF back taxes IN luIsu
anoe Of decision oi Court OF Appeals; $4,000
woro devoted To the payment OF dividend OF five per
cent upon the claims of creditors which Is all That they
have ever received nom the concern ana The balance
100000 wa> up by the commissions Of receivers
and the fees OF their counsel aud clerks Zach dollar
thai the creditors received collected al cost OI three
dollars.
3 In lsGS cx Judge j. : Bosworth appointed
rcieree to examine their accounts. Upon his report
Judge Barnard passed the accounts and sued all or'er
allowing the commission OF one ana quarter
per cent each upon all collections disbursements and
Sc Elements This order the chief instrument u ed
by the receivers IN swelling the amount OF iheii com,
pissions The word settlements gave them almost
nnboundod liberty IN determining upon what rdnsac
showed that they fully appreciated IN" Vaine o li',
seven notes against the company, amounting 10
s2s3Gi 80. The company, on the other hand hdi re-
nyryeh judgments ayalu; the firm of exactly the same
am no ,,,c, y,s ether "a or received bv the re
.eNers In yiiiuo however. of the word settlements
found IN Banaids orlcr. they charged commission OF
two aud hali per cent On So 46i 90 received ana th"
same comm siion on the paid ont thus draw
ing III 400 Ui the cOmpany'- money Tor tidhslcunh-
ars, NneS eN' rh" V @ rd Sn % Of the company on which
the receivers charged their commission; rom Apsn
l57 ~, whereas the actual receipts were only $o4''-
The total arc,nt " commissions charged by The two
,cceivers was ~ - 900 rhey subsequently found how
s,sT sSs.oS ias y.'h hSS SGn S Not HoG SO srse sum
returned %U3233. me other expense ~ w" le,eNel,
.hin vpp On an equally pipnostprous scala The toih
snsunt pad iy sa fgn.e fa, amt S SS,e s t'I "S'
siniU't NJ wheh Dudley ile,a ,t'e', @ n., az ,Nn
ennnsel zoe, > \, nmrson. who was emNned 80
se'S,ssy s vseoo, e S SSfSa% S vt IL law S''' ' WV" ' wv
A. tbe sesWt ~ huoh hdunanaermvht dniihs thn Ntar
trVn tho te,aiaa at the iVVviNpn WpN a'WN' HRr.NNh
Nhile the sN iunaes independent ~ thr tep''et7 ices
an,euntea a. ONpr nAlnNh in iaft tht lpUeiNs NnlH
NJ hVn aud ths eVlsnses a. unn m iNfA tho lroeiris
Mana $3.50 and he e.renses ss 80 hi2 tho eirs
were fsoi aud Tho eNieht' kliWu'"
sFHU0GIi of fnE UNHAPPY NtthiioNs,
A,night be supposed THE method of ecitns the anonA
of ,e company did not rsoyo satisfactory 10 ire o'ed
tors Alter the declaration OF a dividend at hVe per
cent they waited patiently hoping thai another dividend
would soon bo paid Nothing, however Was farther
from the intentions of the receivers than to allow thef
booty to escape their clutches and the hopes oi 'he
creditors seemed doomed 10 disappointment After
bringing Tho oonpanys esonnis into comparative order
MI Higgins had gone Earope, where be remained for