The herald., 1896-08-31
TITLE INSURANCE SCHEME
More Light Thrown Upon
That Absent Security
CURIOUS METHODS OF BUSINESS
A Deposit of 100000 Additional
Required
BEFORE SERVING AS TRUSTEE
Main Street BondhoIders Deposit With
Title Insurance
Bends Valued at S35O0O0 Not Secured
Under the Law
Main Street BondhoIders Deposit With
Title Insurance
Bends Valued at S35O,0OO Not Secured
Under the Law
Insurance commissi0ner Higgins Whips Other
Companies Into Line-HIs Certificate as
Guarantee tu the Title Insurance.
The Company Fails to Put Up

Just one week ago an article was pub
lished in The Herald which illustrated
the lax methods in vogue in a certain
branch of business. Since then various
other facts have developed which ex-
aggerate the evil then pointed out and
accentuate and make more clear the
almost criminal negligence displayed
in safeguarding the interests of the
people.
The allegation was then made that the
Title Insurance and Trust company,
one of the very best known business
companies in the city, had failed to de-
posit with the insurance commissioner
the 100000 worth of securities required
by law. Furthermore that as the cor
poration, by means of advertising mat
ter. was claiming that the Title Insur-
ance company law had been complied
with and on that very account was
in a position to afford much safer and
more satisfactory means to the house
and landholder of insuring and render
ing absolutely secure his title, the in
ference could only be drawn that of all
the abstract companies doing business
in Los Angeles, Insurance Commission
er Higgins was showing favoritism to
the 1llie anu trust COnDdHy
at the possibly disastrous expense of the
public who put him in Office and pay
him his salary. and also at the expense
of his reputation as an honest man.
Such an inference is not unfair in the
absence of any explanation or contra
diction of the statements made week
ago. There was. however. sufficient
evidence furnished at the time of the
truth of the assertion made regarding
the failure to deposit the 100000 re-
quired by the terms of the title insurance
law and now some additional evidence
both direct and collateral, indicates fur
ther unsoundness in the methods adopt
ed by the Title Insurance and Trust
company.
TO DO BUSINESS ON WIND
This corporation filed it's papers on
Dec. 20. 1893, but it did not blossom
forth as title insurance concern until
amended articles were filed on Oct. 10.
1895 With the current year this phase
of business was actively advocated.
In the articles filed it is interesting
to note the purposes Of the incorpora-
ton, as there set forth. The second
clause reads as follows: THAT the pur-
poses for which it is framed are to ac-
Guire abstract plants. to examine pub
lie records to prepare statements of
any matter of record, including abb
stracts and certificates of title; to issue
policies of insurance and other contracts
and reports affecting titles for real es-
tate; to acquire safe deposit plant,
and other measures assuring safety to
depostors of valuables; to do general
trust business, act as agent, trustee,
administrator, executor, guardian, de-
pository and fiduciary servant; to secure
its funds and assets in secured loans,
mortgages and bonds; to acquire stock
of other corporations; to hold and dis
pose of same. All of which business
shall be conducted for profit"
Having a knowledge of what the title
insurance law demands, q will be seen
by the above clause that the varied
business sought to be carried on means
very large financial resources. The COM
pany Is capitalized for $500 600 of which
amount 100000 is invested in plant,
including the building where the busi-
ness is carried on. and 100000 is sup
posed to be invested in securities The
word supposed" is used advisedly, for
although the certificate of Insurance
Commissioner Higgins certified that
the law has been complied with, the man
ager of the Title Insurance and Trust
company himself conceded that it had
not, for the 100000 worth were not on
deposit in the state treasury. The re-
naming 100000 is not outstanding.
1t is curiously interesting to know that
several iHOHlIS ago Wllen lne insurance
commissioner was in Los Angeles he
visited several of the abstract compa-
MES, other than the Title Insurance, and
took them to task They had been fol-
lowing custom of making a clause in
their certificates of title read: I'VE
hereby certify and guarantee" etc. They
were informed that this word guar
antee" would have to be erased, or he
would demand of each individual COM
pany the deposit with him of securities
to the value of 100000. One or two
companies at once knocked out the word
guarantee" while considerable discus
sion took place at the directors meet
lngs OF others. The matter was debated
pro and con. and ultimately was de-
clded that the business field would not
warrant the deposit of the required Sc
curities.
SLUGGED WITH A FINANCIAL
CLUB
At the same moment that these COM
panies were being administered this
dose or medicine. Insurance Commits
sloher higgins must have known abso-
lutely, FOR it was his business to know
that the Title Insurance and Trust com,
pany had not one dollars worth of Sc
curities deposited with him, in accord
ance with the law he used to bludgeon
the other abstract companies with.
pa he or his protegc company chucl5le
in their sleeves?
1t is not to be wondered at if the Title
Insurance, finding itself in such a posi-
ton. should adopt somewhat high
handed methods of doing business. The
Incorporation itself is really a consoIi
dation of IL variety of abstract com
panies that used to do business here.
Among others were the Los Angeles Abb
stract company, the Los Angeles County
Abstract company and the Abstract and
Title Insurance company, these being
mentioned simply by way Of illustra-
ton.
With the power to carry on the title
insurance scheme without being prop
erly secured, and other companies being
barred out, 1t resolved itself into an ap-
Proclamation of the game school boys
play: Heads I win, tails you lose"
The certificates and abstracts of the sew
eral companies absorbed by the Title In
surance and Trust company were repu-