The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-03-29
SAYS HYDE WASTED FUNDS.
ATTORNEY-GENERAL ASKED TO
SUE EQUITABLE LIFE.
Bracket Piles Petition Alleging mat
the Compahy'S Money Has Been spent
for Mr.. Hyde'S Private Utes-Ctet
Costume Ball-sehiR Accused Also.


such action as Mr.. Mayer may deem proper
against the Equitable Life Assurance So
ciety. James II. Hyde, Jacob H. Schih and
such other officers as Mr.. Mayer may de-
eide 10 join ss defendants The apph-
cants are Mary s. Young, for whom Senator
Bracket already has begun a suit TO force a
division Of the surplus funds Of the society;
Charles P. Penheld, Edward Pearsall,
Michael Z, McTigue, James l.. Scott and
Edgar T. Bracket Of Saratoga; Robert o.
Basoom Of Fort Edward and Eugene l..
Ashley Of Glens Falls.
Mary S. Young In her petition says that
On Feb. Z, 1901, che purchased two 1000
policies from the society and on June 8,
1901, another policy for $500. Each of these
policies provides for the delivery to her
at the end Of twenty years OF gold bondot
the 90 ciety, payable in twenty years from
date with per cent, interest. Mrs. Young
in her petition goes on 10 recite that the
society has a capital stock Of tiOo, 700, Of
which she owns one share.
The charter OF the company provides
that its insurance business shall be on the
mutual plan, that the stock shall receive
per cent. and that the surplus earnings
OF the company shall be accumulative.
From this statement she says that the
stockholders and policyholders together
own the entire corporate assets Of the So
ciety. and that without attempting to
define their rights as against each other,
she herself possesses the rights and in
terests Of both a polioyholder and a stock
holder.
Charles s. Penheld. Edward S. Pearsall
and the other signers OF the petition all
testify that they are policyholders Of the
society. Senator Bracket holds policies
amounting 10 5000 upon bis own life.
II is recited in the petition that the charter
Of the society provides for the election OF
fifty-two directors, which board at any
time may provide that the holders OF
poll oies amounting TO more than 5000
may have the right Of voting for
the directors. This right has never been
granted. The society, according to the
petition, has assets Of more than 500 900, 900
and q surplus Of more than $50. 900, 900,
James II. Hyde controls a ajority Of the
capital stock. ..
The petition continues as follows; THAT
eAid James Hyde Ia a young man about
y years Of age and Is the vice-president Of
said society. Ho has had no extended ex-
pehenoe In business. either life insurance or
other, nor has he rendered services Of any
value to the society, notwithstanding which
he has taken from the treasury Of ths so-
ciety during the several years last past
large sums Of money under the following
conditions;
sSaid Hyde has frequently extravs gantly
entertained persons 10 whom he was de-
sirous Of giving social attentions, and has
wronRfuIly taken the expense Of said enter
tainments from the treasury Of said society
on the claim that such entertainment bene-
fitted said society by advertising Il, and
that therefore such expense should be
paid by Il; an instance OF such practice
being the entertainment OF NJ. Cambon,
rate Minister from France 10 the United
States
Another instance Of the wrongful use
Of funds, according to the petition, was
the costume ball given by Mr., Hyde at
Sherrys last January, which cost as much
Gs 500 900. Complaint Is also made that
Mr.. Hyde spends much time eCch year in
Paris, sand there gives social entertain
ments, and the expense thereof and Of his
travelling from Paris to New York and
return, his expenses Of living in Paris, have
been wrongfully charged 10 said society and
wrongfully taken from its treasury
1t Is asserted in the petition that Mr.,
Hyde has been able to do these things be-
cause Of his ability TO elect the board Of
directors, a majority Of which has been
subservient 10 him. The charter requires
that each director shall own Ave shares
Of stock. The petition asserts that Mr..
Hyde or some member Of his family has been
in the habit OF transferring this stock to
directors who Immediately after their cleo
ton have reassigned the stock 10 Mr.. Hyde,
together with the power Of attorney.
The Affairs Of said society have been
administered and controlled by such
dummy directors,' the petition says, 'and
through them by said Hyde who by reason
Of such control has been able 10 do the
wrongful and illegal acts herein and here
tofore specified
Jacob H. Schih. the petition says, has
teen a director for several years, during
which time he has been a partner In the
firm Of Kuhn, Loeb & Co, This firm has
sold more than 100000 worth Of bonds
and other securities 10 the society and has
received large sums in the way Of com
missions In which Mr.. Sohih as member
Of the firm has received a share In express
violation Of the statutes, The sum re-
oeived by Mr. Schifi and his firm, the petit
TONERS say, should be recovered by the
society and Mr., bChm 6houlu De TenoNeu
and disqualified from holding the office Of
director in any insurance company OF the
State
The petitioners assert that officers OF the
society, through gross mismanagement OF
the funds, have made many hundreds OF
thousands Of dollars. 1t is asserted that
the society purchased a large block OF stock
In the American Deposit and Loan Com
pany, now the Equitable Trust Company, at
$500 a share, though the stock was not
worth more than $50 a share, which was
all that the officials Of the society who were
in control Of the Trust company paid for Il.
Through this Transaction, the petition says,
the funds Of the society were depleted 10
the extent Of 81 $50 600, and the officials OF
the society who control the trust company
made q 900 900 OF more.
II u also asserted that the funds OF the
company have been used In 'reokless specu-
lation for the benhft Of some Of the ofnoers
thereof, but no details OF this are given.
In view Of these allegations, the petition
asks the Attorney-General 10 compel the
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