The daily morning journal and courier., 1905-08-01
STATE ACTION FINALLY
 AGAINST THE EQUITABLE
INSTITUTED YEsTERDAYIE NEW
 YORK COUNTY SUPREME COURT.

lowed Twenty Days from Time of
 Service to File Their Answers-Ac-
 counting of Their Official Conduct in
 the Management and Disposition of
 Funds Asked FOr-The Loan to the
 Depew Company.
 New York, July 31.-An action was instituted to-day by State Attorney General Julius M. Mayer in the Su- preme court, New York county, in the aame of the people of the State of New York, against the Equitable Life Assurance Society, it's officers, direct ors, and members of the executive and finance committees, all of which are 1amed in tie complaint.
 A week ago, before the papers were completed, Edward H.. Hartman on the eve of his departure for Japan ac- cepted service of the summons in the proposed action, and to-day many Of the other defendants including James H. Hyde, were served through their private counsel. The defendants are 
 service to file their answers.
 The complaint contains twenty-one sections and covers thirty-three pages of typewrftten matter. It refers to the Prick committee report and the in- vestigation made by State Superin- tendent of Insurance Hendricks and is based on information ad belief. Attorney General Mayer in his prayer to the court says that the action was brought on behalf of the people of the State of New York in public interests and pursuant to the provisions of law. He therefore asks:
 i. That the defendants, and each of them other than the defendant, the Equitable Life Assurance Society of the United States, account for their official conduct in the management and disposition of the funds and prop erty committed to their charge.
 2. That the individual defendants, and each of them, be compelled to pay to the defendant, the Equitable Life Assurance Society. of the United States, any money and the value of any property which they, or any of them, have acquired to themselves, or transferred to others. or lost or vast ed, by violation of their duties.
 3. That any defendant, or defend ants, now a, director or directors or officer in the defendant society, upon proof of misconduct be removed, and that new election be held by the board of the defendant society, pure ly authorized to hold the same in or der to supply the vacancy or vacan- cies created by the removal.
 A. That the net surplus of defendant society, after deducting sufficient amount to cover all outstanding risks and obligations, be paid to, or credited to, or applied for the benefit of the present policy holders in equitable proportions, in accordance with the charter and with law.
 5. That the plaintiff have such other or further relief as may be just, equitable and profitable"
 The complainant charges that the individual defendants disregarding their duty to the society of which they were directors, "negiigently, im- properly and improvidently performed such duties and have habitually and continuously done or suffered to be done wrongful, illegal and improper acts, whereof the defendants society has suffered great oss and damage"
 The individual defendants are fur ther charged with having acquired to themselves, or caused or permitted to be transferred to others, in viola tion of their duties, money, property and the value of property belonging to the defendant society,""
 Here sthe complaint rehearses the relations of the Equitable to various trust companies.
 Of the loan to the DeDew Improve n1ent company the complaint charges:
 "That the defendants improperly, irnprovidently and wastefully procured and permitted the defendant society to loan the sum of $250,000 to the Depew Improvement company a corporation doing business in the state of New York in which company the defend ant, Chauncey M. Depew, and others of the individual defendants were stockholders, which loan of $250, 000 was made upon grossly inadequate se- curity, and which property securing said loan was appraised in 1901 by the Insurance department of the state of New York at the sum of $150000. & '"That the said DeDew Improvement company subsequently became insol- vent and the property securing said loan was bid in at foreclosure sale for about $50,0O0, thereby resulting in a great waste and loss of the property of the defendant society.
 '"That the referees deed for said property was not recorded by said de- fendant society until about July 18th 1905, and that in the meantime no pro- ceedings were taken to collect the Judgment for the deficiency thereon and the same has ever since remained due and unpaid.
 '@That said Denew and others ot the individual defendants agreed with the defendant society that they would save said defendant society harmless from loss by reason of said loan ii said society would refrain from re. cording said deed and from enforcing said deficiency judgment That sait society did so refrain but said defend ants have neglected and refused tc pay the amount of said losses sait noeietv had SD slffered,"