The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1898-03-18

| Order Restraining the Life Insur-
| ance Clearing Company of st.
| Paul From Exercising Any of It's
| Functions as Corporation
| Judge Otis Grants an Order.
| Judge Otis issued on order yesterday
restraining the Life Insurance Clearing
Company of St. Paul from transactng
any further business, disposing Of any
| property, or exercising any of its
functions as corporation, pending the
| disposition Of an application by In
| surance Commissioner Dearth for an
| order appointing a receiver Of the COM
pany to wind up It's business.
The commissioner makes the applica-
ton through Attorney General Childs
The complaint, which was filed in the
| district court yesterday, makes serious
charges against the insurance COM
pany.
| 1t Is based on allegations that the
| business has been mismanaged; that
the officers Of the company have made
false reports Of its business to the in
surance commissioner; that the COM
pany has no intention of carrying on
any business, and that Thomas 3. Scott
it's former president, who is still a
| director, is endeavoring to discourage
| policy holders from paying their pre-
m1ums, and attempting to depreciate
the value of the shares of stock to
rs cents on the dollar.
| The complaint recites the statements
| contained in the reports of the insur-
ance commissioners of the states of
New York, Illinois and Minnesota, who
examined into the affairs of the COM
pany last November.
1t is alleged that the report of the
company to the insurance committee
for the year 1897, contained the state
ment that during the year there had
been received for the surplus fund $12,
500, whereas, in fact, the company did
not have that sum or any part thereof
among it's assets.
It is further charged that the same
report represented that the sum total Of
all claims outstanding against the COM
pany, amounted to only $5,955.92 while
in truth, the unpaid claims aggregated
500, 1882. The report is declared to be
false and fraudulent
Continuing, the complaint alleges
that it was discovered upon the eX-
| animation of the books last November,
| that one-f1fth Of the capital stock which
| is valued at 100000, was in the name
of A M. Du Bord, who was a lady
stenographer employed in the Northern
Exchange bank, of which Thomas B..
Scott is president. 1t is alleged upon
information and belief that A. M. Du
Bord has no financial responsibility,
and that T. B. Scott purchased the
stock and had it transferred to her
name in order to escape financial re-
sponsibility in case of the insolvency of
the corporation.
1t is further charged that the capital
stock of the company, originally of
the value Of 100000, was, on Nov 1,
1897 impaired to the extent of $42,-
S11.34, and on Dec. 81, 1897, to the eX-
| tent of $38,167.31.
The complaint declares that on &C
| count Of the impairment of the capital,
false reports to the department and
the condition of affairs disclosed by
the investigation the insurance COM
missioner demanded that the president
| resign, and that the affairs Of the
company be placed in the hands Of
some one who had had experience in
| the life insurance business.
| Mr.. Scott resigned the presidency,
and an understanding was had be-
! tween the department and the board
Of directors that experienced men
would be placed in charge of the bust
| ness. In violation of this understand
| ing, it is alleged, several of the di-
| rectors sold their stock to t. B. Scott,
who secured majority of the shares
| ed president and M. w. Hill secretary
of the company.
Mr.. Sargent, it Is alleged, has had
no experience in the life insurance
business, and Mr.. Hill has had no
particular experience except as a
| bookkeeper and solicitor.
In conclusion the complaint states
| that Mr.. Scott has recently purchased
| $4,550 worth of the company's stock
and had it assigned to Sargent, who
has never paid any sum whatever for
! the stock, and as the commissioner
| believes is not financially responsible.
| Since the election Of these new Off
GERS, it is alleged that the company
has not attempted to write any new
know that they ever would write any
| more, and has stated that they did
| not intend to do so; that 7. B. Scott
| is still a director of the company and
that the policy of the present manage
ment is to discourage policy holders
! from paying their premiums and con-
| tinuing their policies, and that on this
| account a large number of policy
| holders have allowed their policies to
| lapse.
Among the affidavits attached to
| the complaint is that of Insurance
| Commissioner Dearth, which, after re-
citing in detail the alleged operations
| fourths Of the stock for twenty five
cents on the dollar, and refusing to
| sell at less than 60 cents on the dol
| lar, concludes as follows:
| That it Is for the interests Of the policy
holders of said company and the stock
| holders with the exception of the said
| Thomas B. Scott and those persons who
| hold sock for his convenience tina the affairs
! of said corporation should be wound up and
| the said corporation dissolved and that an
| injunction issue restraining and enjoining
said company from transacting any further
| business and that said corporation be dis
| solved and that some competent and d.sin-
| terested person be appointed receiver there
| of; that there Is no adequate remedy at law
| for the wrongs herein complained of.
That on Feb. II said insurance company
wrote and mailed letter, of which exhibit
| CO. hereto attached is a copy and hereby
| referred to be made part of this affidavit,
| that said letter was mailed by said company
| to one of its policy holders with the evil
| dent intent and purpose on the part of sad
company to cause said policy holder to let
| his policy lapse; that similar letters have
been written and mailed by said company
| to other policy holders within the last few
weeks, with the same object in view, one
| of which is a letter a copy of which is
| hereto attached, marked exhibit CD and
| made a part hereof.
| The afnant prays the court to grant an
| injunction restraining said corporation and
! Its officers from exercising any of its cor
! porate rights, privileges and franchises, and
l VI Alv,1 dnh