The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-10-03
He CHARGES FRAUD
RUSSELL r.. DoRR WANTS THE
LIFE INSURANCE CLEARING
COMPANY LOOKED INTO.
SAYS THERE HAS BEEN FRAUD
IN THE MANAGEMENT OF THE CON-
Germ BY MESsRs. SCOTT AND
STRAIT.
SUIT WAS BEGUN YESTERDAY
For Their Removal From the Man.
aEement and Other Redress
for Wrongs Alleged.
SAYS THERE HAS BEEN FRAUD


oNSA SSS~AJ
lively, of the Life Insurance Clearing
company, are made objects of some
ugly charges in an action filed in the
district court yesterday by Russell r.
Dorr, one of the founders of the con-
Germ, and for long time it's chief Of
ficer. Mr.. Dorr fatty charges the men
Eamed in his complaint, which was
filed yesterday with various forms Of
fraudulent and corrupt mismanage-
ment 1t has been known for some
time that there were some factional
fights in the ranks of the company
and suits Of a purely equitable nature
have been begun from time to time by
various stockholders. Now, however,
Mr. Dorr charges that in February
last, the defendants in the present suit,
business in Minnesota, which was es-
sential to their successful continuance,
made a fraudulent report of the con-
dition of the company to the insurance
commissioner of this state in which, so
Mr.. Dorr claims, an item of 1860 ap-
pears credited to income "for surplus
fund.- and another of real estate ac-
quired," $1,000 which were both false,
as the $12,500 is alleged to have been
borrowed by the defendant Scott from
the Northern Exchange bank. of which
he is the head. The real estate item,
Mr.. Dorr alleges was at least $4,000 too
large, while where the statement
showed the liabilities of the company
on death claims to be approximately
So, 900, he maintains that this item real
ly amounted to $14,706 On claims re-
sisted by the company, stated by. the
defendants as amounting to $4,000, Mr..
Dorr alleges that there was properly
chargeable $4,000. Whereas the total
amount of liabilities was stated by the
defendants in their report to the in
surance commissioner to be $42, 500, Mr..
Dorr insists that they were actually
SIS, 900. While the statement was made
that the surplus of the company was
$4,000, Mr.. Dorr maintains that it
was really less than 100000.
The complaint further alleges that
the company has an insurance fund
for the payment of what are known
as dividend accretion policies from
which the defendants, it is alleged
diverted and misappropriated over
$4,000, which was used for the general
fund of the company, and the use and
benefit of the stockholders thereof.
The action begun yesterday in which
Pinch and Dampier are the attorneys
for the plaintiff, is the outcome of a
long estrangement between Mr.. Dorr
and the defendants, made more or less
familiar to those directly interested in
the company by a series OF suits. It
was desired to have the state step in
and wrest the manags ment of the COM
pany from the hands of the defendants
in the present case, but Attorney Gen
eral Childs, after having six weeks ago
been placed in possession of the facts
stated in the complaint failed to bring
an action in the name of the state, and
yesterdays suit was the result.
The complaint in the action is as
follows:
sey-D:strict Court, Second Judicial District.
Russell R. DCrr, plaintiff, VS., Life Insurance
Clearing Company, a corporation, Thomas
B. Scott and H. Burton Strait, defendants.
The plaintiff, complaining of the defendants,
allt ges ard states:
1. That the defendant Life Insurance Clear
ing company, hereinafter called company
for brevity, is now and for more than five
(5) years last PAST Las been corporation
and life insurance company, duly created,
organized and existing under and by virtue
of the laws of the state of Minnesota; that
the said defendant Thomas B. Scott is now
and ever since the month of February, 1896,
has been stakeholder director and the
president of said company; IL at the said
defendant H. Burton Strait is now and ever
since the month of February, 1896, has been
a stakeholder, director and tie secretary
of the said company; that ever since the or
ganization of said company it has been and
is still engaged in the business of a life in
surance company, and in the year 1896 the
said company duly accepted the provisions
of chapter 175 Of the Laws of Minnesota for
the year 1895, and has been ever since said
time and still is governed by and subject
to the provisions thereof.
IL That said company has capital stock
of 500, coo, divided into 1000 shares of 500
each.
III That this plaintiff ever since the or
ganization of said company has been stock
holder thereof, and that he now is the own
er and holder of more than seventy (70) shares
of the capital stock of said company, and
that said plaintiff is insured by and policy
holder IN the said company.
". That ever since the organization of said
company it has been actively soliciting and
engaged in the business of a 'life insurance
company" within the meaning Of the pro-
visions of said chapter It's of the Laws of
Minnesota for the year 1895, and that the
said company has been and is duly authorized
and licensed by law to engage in and has
been and is now engaged in the business OF
such a company in the state of Minnesota,
and more than twenty (20) other states of the
United States of America to wit: Alabama
California Colorado, Delaware, District of
Columbia Georgia, Illinois, Indiana, Iowa,
Kansas, Kentucky, Louisiana, Maine, Mary
land, Michigan, Missouri, Montana, Nebraska,
North Carolina, North Dakota, Ohio Oregon,
Pennsylvania, Rhode Island South Carolina,
mont Washington, West Virginia. Wisconsin;
that said defendant has now more than 100J
policies of life insurance in force, and that
the same amount in the aggregate to more
than $2,000,000, and that forty-five f45) there
of are issued to and held by persons living
in the state of Minnesota, and that the ag-
gregate amount of the same In force in the
state of Minnesota IS more than $50 900.
V. That by the provisions of Chapter IT'S of
the Laws of Minnesota for the year 1895, said
company was required TO file on or before
the 18th day of February, 1897, in the Office
of the insurance commissioner of the state
Of Minnesota statement in writing ex-
hibiting its income and disbursements for the
year 1856, its final condition On the 31st day
Of December, 1896, and a statement of all
of the assets and liabilities of said COM
pany on said date, subscribed and sworn to
by its president and secretary, or in their
absence by two of its principal officers.
That by the provisions of the laws of each
and every state in which said company has
been is authorized or licensed to
carry its business, the said company was
required to make and file during the first
part of the year 1887, in the proper Office, and
with the officer specified by the laws of each
of said states, a statement exhibiting its in
come and disbursements for the year 1896
together with statement of all of the assets
and liabilities of said company said date.
subscribed and sworn to by the president
or other proper officers thereof
VI. That heretofore and on or about the
da.. nf LlnIr IL nid