New-York tribune., 1907-02-08
NEW ERSHIPCASE
CHARGES Made IN Manhattan Fire
Insurance affair.
[By Telegraph 70 The Trlbune.

Albany Feb. I'm addition To acting as re-
ceiver for the Republic Savings and Loan Asso-
citation, it became known to-day that Otto
Kelsey, Superintendent Of Insurance, had also
acted as receiver for the Manhattan Fire Insur-
ance Company Although Mr. Kelsey is not at
present receiver in the latter case, he did not
resign until about a month after his nomination
as state insurance superintendent had been con-
frmed by the Senate The facts in this receiver
shlp-the settlement of the affairs of the Man
haitian Fire Insurance Company-and those Of
the Republic Savings and Loan Association have
been called to the Governors attention. but he
has not taken any official cognzance of them yet
R, S. Johnson, of the firm of Hasbrouck &
Johnson. who were counsel for the receivers III
the Republic Savings Association case. was
counsel for Mr.. Kelsey in connection with this
second receivershlp. Affidavits submitted in
legal proceedings in connection with the case
show that he and his firm submitted bills for
legal services which. together with the expenses
of the receivership, amounted to - per cent OF
the receipts. These bills were cut severely, to
which reductions Mr. Johnson agreed.
Mr.. Kelsey appointed temporary receiver
Of the Manhattan Fire Insurance Company in
May. 1901, and made permanent receiver the
following month. The affairs Of the concern
much involved but Mr.. Kelsey transacted
the business of receiver without any interference
for several years. until March -, 1905 a
tion was made in the Supreme Court in Albany
County to compel the receiver TO make an ac-
counting. Mr.. Johnson Mr. Kelsey's lawyer,
opposed the motion. but such an order was
granted on May s. 1905. Thereupon Mr. KELSEY
filed an account for the period from May II.
1901. to April % 1905 Meanwhile on March
20. 1905. Attorney General Mayer had appointed
Alfred Hayes. jr. OF New York, his special rep
resentative in the case When the Kelsey &C
counting filed various creditors OF the Man
haitian with claims amounting To half million
dollars, filed objections 10 IT, Justice Howard
Of the Supreme Court appoint W. VI. K. Olcott
as referee. He still is hearing testimony. Up
TO date IT is declared. 1850 pages Of testimony
have been taken. about three quarters or them
devoted to objections filed 20 tho fees charged
by Hasbrouck & Johnson
In May. 1906. Mr.. Kelsey asked 70 be relieved
Of the receivership. on May % an order was
issued granting his request. and Edward p
Ward was appointed receiver. He designated
Mr., Hayes, who had been representing tho At
torney General counsel
Mr.. Hayes mad, demand on Mr Johnson for
all papers ana documents This was refused
A motion later was made at special term of
the Supreme Court in Albany returuable on
December $ 1906, asking that Mr. Johnson he
directed 70 turn over al papers. The argument
on this motion adjcmuc6 To March 1907
on the str Ft"neEt Of NJ. Johnson that Has
brouciS and Johnson could gct a better settle
mert in certain cases than any one else.
The affidavit Of Mr.. Hayes in support Of his
motion stated that the net amount of receipts OF
Mr.. Kelsey as receiver was $T1 .649 %. or this
S272S4 paid for expenses In addition
counsel OF the receiver had put in bills as fol-
lows: Hasbrouck and Johnson, May H. 1901 to
February o. 1902, $4,000, Mr. Johnson Feb
ruary H. 1902. to April %, 1905 $4,000: MI
Johnson, April %, 1905, 10 June 80 1906 81 800
If these We're allowed In full the expense and
legal fees would amount to 16 per cent Of the
receipts. on the hearing Mr.. Olcott found that
the first bill should be reduced 10 5000 and
Mr.. Johnson agreed to reduce his second bin to
$4,000 and the third bill to $500 a total of
$3.50. The commissions to Mr.. Kelsey as re
ceiYer amounted to S5.493 80
Mr.. Hayess affidavit went into details about
various suits in which the Manhattan Fire In
surance Company was party. 1t alleged. on in
formation and belief, that Mr.. Johnson, as attor-
ney for the receiver had been dilatory and care
less. II alleged that the bill for SD 800 was in
accurate and misleading. Mr.. Hayes said that
Mr. Johnson included charges for services rnn
dered I'm Georgia and Virginia, all Of which
claims were withdrawn, 1t appearing that COM
pensation had already been received i'm the an
He enumerated alleged trips TO Albany and al
legged al-day hearings. He also charged care
lessness in the preservation OF papers relating 10
the receivership as well as in pushing claims
that the company had.
Governor Hughes said o-day that he had had
the Kelsey recevership affair called to his atten-
tion by letters from creditors. No official action
had been taken in connection with this situation.
Neither the Governor nor Mr.. Kelsey would dis
affairs of the Insurance Department The
latest development there is that Mr.. Kelsey has
asked for more time TO consider his resignation
The present probability is that no decision viii
be reached before next week.
Some Of his friends in the Senate toe day we're
saying that they would be glad of a chance to
show their belief in Mr. Kelseys integrity and
their loyalty to him by lighting in the Senate any
plans for his removal. but the general sentiment
in that body indicates that If the Governor does
not receive Mr.. Kelsey's resignation and prefers
charges against him, successful fight or anv
fight worth mentioning will be made for the
superintendent.
Many of the political gossips consider that the
Kelsey case is disposed Of, and have turned their
attention to now fields. Discussion is rife of the
likelihood of the Governors getting after" Mr.
Whipple, Forest, Fish and Game Commissioners
and Fiscal Supervisor Bender. whom the State
Civil Srvice Commission condemned for collect
ing campaign contributions. but there is no
tangible basis for these rumcrs