New-York tribune., 1905-07-28
FRAUD NOW CHARGED.
RECEIVER ASKED FOX.
S5ceeping Complaint of Equitable
PoHcyhoIder Filed.


Equitable Life Assurance Society have oeen
guilty of widespread corruption and misuse or
strictly insurance funds, and that conditions
under the new management were not essentlaIly
different, Colonel ]. wilcox Brown, pohcy-
holder. of Virginia, in the United States CIRCUIT
Court yesterday, asked that the societys al
fairs be wound up absolutely. and that re-
ceiver be appointed to protect the pohcynoloers-
Colonel Brown had already brought suit 10
have an accounting of the surplus, ana q re-
ceiver for that $50 100000 pending a decision as
to the rights of the policyhoders in the surplus
Through Dos Passos Brothers. Battle & Mar
shall and Joseph de F. Junkin. of Philadelphia
his lawyers, he filed an amended complaint yes
terdav much more sweeping and vitriolic In Its
terms than the original
His policy is for S250OO he says. with a pro-
vision that the dividends accruing from the sur
plus shall be used in diminuton OF the yearly
premiums These premiums were diminished
for a time he says, but recently thls ueclease
became small because ''the said society," its OH
GERS and stockholders have wrongfuly retained
and TO the extent of a large sum fraudulentLy
wasted and misappropriated to themselves
large portion of his equitable share In the sur
plus. The society has juggled with the sur
plus to suit occasion, without regard TO right
or law he says
a
Superintendent of Insurance. under the direc-
ton of Governor Higgins. says the complaint
revealed that "the society. its officers and agents
have been guilty of fraud. waste and negn-
gence."
The complaint then takes up the sale OF the
Hyde stock to Thomas F. Ryan. 1t says in part;
ANARCHY IN MANAGEMENT
The said Ryan is now the real managing spirit
of md is
business The right of the trustees to select and
manage the election of such policyholders MEM
hers of the board OF directors at the present time.
or to attempt qualify such character of directors
at the annual meeting, provided by the said
deed of trust, is denied by your orator. Twenty
policyholders, who not stockholders, have been
proposed by such trustees and have been elected
by said remaining members OF said board as
directors, and are serving thereon. but that such
election lawful Is denied by your orator and by
minority stockholders of the society and until such
questions are settled by by court OF final juFsdG7
and corporate anarchy in the management OF the
Your orator further alleges and complains that
he and the other pollcyhoders and annutants are
proper protection and care OF the said assurance
funds and surplus now under the control OF the
said fraudulent and Illegal acts Of the directors OF
The assurance funds held by the society have
been fraudulentiy and negigently' and are being;
many millions of dollars; 1t is without legally
P6I ae q S T IS uo Tne nd
The consequence has been. and Is now; that the
Of ad S banss
is Rsfg snd e % %
said business threatens irretrievable loss to the
TSa Business Snd M to ta' @ the sGoSg are at
standstin; its morale an insurer is destroyed;
NOUS loss and sacrdce on the part Of the present
n tbe hands of competent recefyeTs
appointed by this court and to grsdualys Prudently
pan pany' In this way only can the policyholders and
annultants be protected from eventual and ir-
Colonel Brown. in his long application to
the courts concludes the petition with the fol-
lowing demand:
court to take possession Of the funds. assets and
property held by the defendant n s9e 9 eVf6
same same S' as they may be directed by the court
The special meeting Of the Equitable directors
yesterday resulted In the election OF two new
directors-George F. Victor and Ernest B. Krut-
schnitt-and the amendment OF the bylaws to
do away with the office of chairman OF the
board. Paul Morton the new president, resigned
as chairman before that place was abolished.
PENSION FOR IIR. ALEXANDER
The special committee on pensions made a re-
port which brought to light the fact that an
agreement had been made with James W. AL
exander by which his wife. in of his DEATH
was to receive $4,000 year. as Mrs Henry B.
Hyde has been receiving her $4,000 The old
board of directors passed resolutions sanctioning
Mrs Alexander's pension at the same time It
voted Mrs. Hydes. Both given, it was
said because of certain commissions other
emoluments renounced by Mr.. Hyde and Mr.. AL
exander. Mr.. Alexander. far as is known,
had never written insurance for the Equitable.
Wallace MacfarlaIe and Austen G. Fox.
the advice Of the special committee to render
an opinion as to the legality of cutting off
Mrs. Hyde's pension and revoking the agree
ment as TO Mrs. Alexander's pension.
Several pensions cut off entirely. as
recommended by the committee. and others
were reduced Mr. Morton said that every
recommendation made by the committee had
been followed.
we have referred the question of Mrs
Hyde's pension he said, "and agreement as
to similar pension to Mrs. Alexander in case
of her husbands death. to counsel for an
opinion to the legal status.
One director questioned the value of some of
the policies issued this year. The list of ap-
plicants for policies in the Metropolitan dis
trict was brought into the room. It will be
gone over carefully soon. as some OF the di-
rectors believe that in some instances canvass
ers. in their desire to turn in new business
induced friends and acquaintances to sign ap-
plications and submit to medical examinations
with the understanding that they were not 10
become bona fde policyholders In this way
it is said. the record was sweTed and commits
sions were obtained absolutely worthless
candidates.
FINANCIAL REPORT READ