New-York tribune., 1905-04-11
THE LORD SUIT ARGUED.
The Equitable Naturalization at a
StandstiU.

Complicated BY the entrance OF Samuel Inter
Gyer, representing q majority OF the stock with
an application for leave 10 intervene the suit of
Franklin b. Lord to prevent the naturalization Of
the Equitable Life Assurance Society went on be
fore Justice Maddox in Brooklyn, yesterday. Until
this suit is decided. action viii be taken By Attor-
ney General Mayer the proposed amendment TO
the charter, no action can be taken by the Super
intendent OF Insurance. ana all further steps to
settle the dispute which has almost disrupted the
society must stop. For his clients James Hazen
Hyde and William H Mcintyre. Mr.. Untermyer
declared that the stockholders wanted the rndtuan-
cation rushed through. but according to law
Arguments by Edward II. Shepard, for Mr. Lord.
declared that the naturalization plan was produced
secretly and passed by the directors without due
notice to the stockholders and policyhoders OF the
Equitable Il would deprive tho stockholders or the
control Of the society practically placing the assets
OF the concern IN the hands Of agents. who could
set proxies from their poHcyholders he said VIII
lam B. HornbloWer. personal counsel for President
Alexander who appeared for the society. answered
that the naturalization plan had been approved by
a majority Of the stock II harmed nobodys in
terests IN the surplus of the society.
The society has not made application for the
amendments 10 the charter under Section 81 OF
the insurance laws. which permits any insurance
company TO amend its charter by a vote Of
majority OF its trustees or directors, the amended
charter going into effect on the consent Of the
Superintendent OF Insurance. The application 1t
was learned yesterday was made under the laws
governing property rights according TO which, in
the opinion Of one OF the lawyers, the minority
cannot claim any right. Whatever the result Of
the application, the numerous lawyers who have
appeared in the case VIII not suffer; they VIII be
paid by the Equitable from pOlicyholders' money.
The board Of directors viii hold its regular meet
sng Thursday. and 1t is expected that a warm
discussion viii be raised over the service OF the
papers in the Lord suit These papers. 1t was
declared, were served on William Alexander. the
secretary Of the society late Wednesday Of last
week Although the directors met on Thursday,
Friday night that Mr. Hyde learned about the
suit An explanation OF this oversight viii be de-
nanded, il was declared
THE LORD SUIT CALLED.
AEr. Shepard, Henry De Forest Baldwin, Mr..
Lords lawyer, and Air. Lord himself. were ready
when the suit was called. In addition TO Mr.
TzOrnblower Bainbridge Colby and William y.
Cohen represented the Equitable
Kr. Untermyer declared that the lawyers for the
defendant company really represented Mr. AleXan-
der. He asked for leave 10 Intervene after he had
examined the papers If he deemed It necessary.
Justice Maddox granted it.
Mr. Shepard in beginning his argument said that
The property rights Of the stockholders could not be
taken away without due process Of law. Power to
amend the charter did lie within the board. and
81 Il did the directors could not have any power
10 destroy his clients rights in the stock, which
stock he believed, worth from 10000 10
s2oo,000 He took up the charges against Mr.. Hyde.
sn spite OF objections from Mr. HornboWer. who
papers
MR.. sHEPARD's ARGUMENT.
After recess Mr.. Shepard continued his argument,
which. with questions asked by the court. and
3nterrogations OF opposing counsel, was in part as
follows:
From the time Of the last annual election down
10 the present advised. with the many
meetings Of the board Of directors and without
st6cBhoiders ana Mr. Alaxander, the minority
stookholders have had no notice OF any ldnd IN
' oe 5oe n 3 S 6a es mat no notice Of
THIS plan was given 10 shareholders?
addressed 10 Mr.. Alexander a respectful communi-
cation Of inquiry and e, for long tine i remained ned
aIexander 4 Communication telling him that il he
wished 10 hle a brief il would be considered. These
"a them. In the same sense they also were trus-
tees FOR the policyholders but primarily they were
put there 10 represent the stockholders Here they
are dealing win great Fundamental principles
without any communication OF notice whatever 10
the stockholders who elected them. Something in
terVened which made them decide that the holder
Of any policy, without reference TO amount, should
Fany in the control Of the agents father than IN
ers These agents would be able TO construct situ-
be with few men " who M, have a small part OF real
would be put on the same basis as one with a
Here We have charter. which at present gives
20 the stoekholdeTs the right 10 elect al the d-
sfTs1 he s6cboldeTs OF nzi s79T g S,a Ter lfg icy
election Of the majority Of the board Of directors
The absolute control Of the directors is taken away
frora the stockholders and given to the policy
holders. This shows the complete revolution effect
ed 10 complete the destruction of the stockhoding
control These agents who are hghtng for the
control OF the society profess TO be fighting for
-or+on az the ca 90 nocvbol1ers bSS,,a q elr H & W.
assent TO the plans invoked IN their name.
II the doctrine for which counsel for the other
side contend IS sound then there is nothing pre-
corporations entirely out Of the hands Of the com
panyf ia any eynt 10 take from the stockholder
the right 70 control his own property The right TO
the ownership OF the property. They propose 10
strip the stockholders OF the Equitable Of amy right
20 participate IN the election Of majority OF the
10 policy has yet been written by the EQUITABLE
which gives definite right ID any definite part OF
the surplus After satisfying the polcyhoders ac-
cording 70 the contracts there remains 100000
It IS contended that fl belongs 10 the stockholders
i might rs wei be suggested that we giye to every
So4s as 10 . carry on he affairs Of the auitable
,1y5er ms rsr Ths whole proposition is 10 take
the control OF electorate 10 be determined by the
agents.
MR. HoRNBLOWER's CONTENTIOUS
.The board OF directors Of the society has three
times unanimously approved the principle OF giving
10 1ooicyholders the right to vote for directors.
paia M FEornblower. 1T has twice unanimously
adopted amended charters embodying such pro-
vision The parties all united on this propos-
Hon except thlrty-four shares out Of thousand
shares Either Nr. Lord can put his veto this
great reform. or he cannot Either he has the ab-
bolute technical right TO stand with share OF
stock or he has right II he has that right. then
that right he is entitled 10 enforce If he has no
such right then. matter how bad the motives
may be behind this naturalization plan, the plain
tiff IA this has right attempt TO stop it
Therefore. We have takea the responsibility of ad-
Eising Mr. Alexander 10 make no AFFIDAVIT IN an
aver 10 the moving papers with regard to alleged
6issensions among officers and members Of the
board OF directors. We viii. however. submit q