Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1908-11-28
For 100000 Against Moulton,
Its President, and Rosen-
field, Former Manager.
AND sl25,ooo AGAINST GRAY
Judge Kohlsaat's Decision Based Pri-
marty on Proposition Didn't Look
After Pollcyholdcrs' Interests.

Chicago, Nov. 2s.--Judge Kohlsaat of
| the federal court yesterday gave a de-
cree in favor Of the Western Life In
| demnity company for 100000 against
Gen. George NJ Moulton, its president
and Edward J. Rosenfeld, former man
ager. as well as decree for sl25,000
against William II. Gray. who preceded
Rosenfeld as manager. Judge Kohl
saat's ruling primarily was based on
the proposition that the three defend
ants tailed to pay adequate attention
to the protection of the policyholders.
At the time when the improper trans
actions took place, In 1905, Moulton
was major general Of the Illinois ma
tional guard and head of the knights
Templars in the United States. 1t was
in the year mentioned that the Knights
Templars and Masons Life Indemnity
company became the Western Life IN
demnity company.
Gray was paid s125oOO by Rosenfeld,
practically out of the assets of the
company, to assign his contract as
manager to Resented. This sale of
the contract was held by Judge Kohl
saat to be Illegal. inasmuch as 1t was
IL VI lTuSl ana ueuil WIFI ii
fiduciary position and 50 could not be
assigned. Gray Is now ordered to re-
turn the amount
Moulton got an increase of salary
when Resented became manager UNI
der the Illegal transfer Of Gray's con-
tract to him, the increase being from
ST., 500 annually to $4,000 annually. Be-
cause of this increase, Moulton, In
Judge Kohlsaat's view, shut his eyes to
IL
things to be done which we're against
the interests of the policyholders. who
We're looking to President Moulton for
protection. Judge kohlsaat severely
condemns the breaches of trust in
volvcd.
The 100000 for which the decree is
given against Moulton and Rosenfeld
according to the evidence. was the
amount ostensibly paid by the Western
Indemnity in 1905 for lists OF policy
holders in an alleged worthless com
pany.
1t was asserted Rosenfeld had re-
insured some 80 decaylng fraternal and
assessment insurance companies In the
Life Insurance company of Pennsyl-
vania, of which he was manager, giving
it quantity of sub-standard business
with liens against most of the policies,
so that very much less than their face
value NOulu Ue IedHZeu III case OIL
death.
& Coming to Chicago Rosenfeld per-
suaded Gray to turn over to him Grays
contract as mentioned. At this time
the Gray contract had but four years
to run, and Judge Kohlsaat points out
that the mere offer OF sf26,000 by Ros-
enfield to Gray for contract which
was then worth comparatively little
should have been enough to put Gray
on his guard in the interests of tho
poicyholderS.
Rosenfeld succeeded Gray as mana
ger, and then he proceeded to take 5000.
900 in assets Of the Western Indemnity
for the ostensible purpose of purchas-
ing a list Of the policyholders of the
Pennsylvania company, which list was
declared valueless. With this money, 1t
was declared. Resented repaid the
Sl25,000 which he had borrowed to pay
Gray and then appropriated the re-
naming $4,000 himself
The present case grew out of an at
tempt to have the Western Indemnity
purchase the Security Life Of Virginia
in 1905. An injunction was secured
which blocked the Security Life deal
and then the policyhoders, headed by
Allen w. Field, started to secure the
correction of the, original Pennsylvania
company deal. which was held to be
fraudulent. The case was referred to
a master in chancery, who made a
report, now affirmed in full by Judge
kohlsaat.