Omaha daily bee., 1905-08-01
SUIT FOR SURPLUS
Continued from First Page1

Continued from First Page)
which declares such salaries to have been
largely in excess OF the value of the ser
vices Of the persons named and that the
payment Of such salaries resulted In sub
stantial loss to the society. 1t is also
charged that in addition to the salaries re-
ferred to, the individual defendants as
officers, members OF committees, trustees
or agents, permitted the defendant society
to pay to many of the above named ohcers
and directors and TO others large and un-
warranted sums as expenses incurred by
such persons In the service Of the society
and said sums were paid without SUFFICIENT
vouchers, without proper proof Of their
amounts and without It being properly
shown that the said defendant society in
any way was benefited by such expendi-
lures or was legally or properly chargeable
Herewith"
The complaint also charges:
That the defendants wrongfully caused
the defendant society and number of
other societies and corporations, in which
the defendant society was largely stock
holder, in which said individuals defendants
were also directors and stockholders, TO pay
large sums Of money to themselves, or to
under guse of salaries and fees for attend
ing to their duties as officers and directors
society, and of several other societies ana
Especial mention is made Of the receipt
by Mr.. Hyde OF salaries aggregating SIOO
annually from the Equitable, Mercantile
and Commercial Trust companies, in all
of which the Equitable Life is largely in
terested.
Allegation is also made of the payment of
illegal and expensive pensions to various
persons and Of the payment Of excessive
improper and unwarranted sums to various
attorneys and counselors at law, the ag-
gregate amount Of which far exceed and
was entirely disproportionate to the ser
vices rendered"
Loan to Depew Company.
OF the loan to the Depew Improvement
company the complaint charges:
That the defendants improperly, i'm,
providently and wastefully procured, ana
permitted the defendant society TO loan lne
sum Of $3.50 900 to the Depew Improvement
company, a corporation doing business ~, ~
the state of New York, IN whiGn G5a, eoglpanS ny
others of individual defendants We're STOCK
holders, which loan of $25O,OO was mace
upon grossly inadequate security, ana
which property securing said loan was APP
praised in 1901 by the insurance department.
of the state of New York at the sum ol
That said Depew Improvement company
subsequently became insolyent, and the
property WnlCn SeCuTeu selu luah
In at foreclosure sale for about SSoVoO,
thereby resulting In great waste ana loss
Of the property Of the defendant society.
That the referees deed for said property
was not recorded by said deteLndaht .
society until about July H. 1905, and that In
the meantime no proceedings were taken
to collect tile Judgment for the deficiency
thereon, and the same has ever since re-
mained due and unpaid
dividual defendants agreed with the de-
fendant society that they would save sald
defendant society harmless from loss by
reason OF said loan II said society would
refrain from recording said deed and from
enforcing said deficiency judgment: Ihat
said society did so refrain, but said de-
PENDANTS have neglected and refused to pay
the amount OF said losses said society had
so suffered.
FavOrs TO Directors Banks.
It is further charged that "the defendants
wastefully, improperly and improvidently
permitted the defendant society for num-
ber Of years past to keep during almost the
whole of each year excessive, unnecessary
| and unwarranted sums of money on deposit
| with the National Bank of Commerce OF
| New York the Mercantile Trust company
! of New York the Equitable Trust company
! of New York, Commercial Trust company
| of Philadelphia and at least nineteen other
| banks and trust companies in some or all
of which the individual defendants, or set
of them, were stockholders directors or
! officers which sums were so deposited at
inadequate rates of interest. instead Of in
vesting them in proper and more remunera-
tive forms Of investment, and permitted
said defendant society regularly for a num-
ber of years past to conceal this fact and
mislead and deceive the polcyholders OF
| the society in respect thereto by annually,
on December n to 20, loaning approximately
$40, 600 900 on collateral security, which said
loans have been regularly called in again on
January to following and the funds re-
deposited in the repositories from which
they had been temporarily withdrawn for
this purpose"
Surplus for POIicyhOIdeFs.
After reciting that the society has at the
end OF each year caused balance 10 be
struck puTporting TO show the net surplus
earned during the preceding year. the COM
plant declares that the defendants have
failed to divide among the policyholders an
equitable share OF the net surplus at the ex-
piration OF each hve-year period as pro-
vided by the society's charter. The COM
plant continues:
PLAINTIFF further alleges that the rules and
| regulations adopted and heretofore acted
GERS, with the approval and consent OF the
| seciety's directors, for the ascertainment OF
the Equitable share Of the surplus due TO
each policyholder, were and are incorrect,
Illegal and improper, and that of the sur
plus now held or purporting TO be held by
the defendant society, as shown by its
/ statements sum approXmating slOOOO,OOO
Is held by the society in violation OF law
and the express terms OF the charter.
| That the present policyholders Of the de-
fendant society are entitled 10 the whole OF
the present net surplus of the society, after
deducting a sufficient amount to cover all
| outstanding risks and other obligations, In
| accordance with the charter, and are en-
titled TO have an equitable share Of said net
| surplus credited TO, or paid to, or applied
! for the benefit Of each policyholder, In ac-
| eordanee with the charter and with law