New-York tribune., 1909-07-07
GROSS FRAUD, HE SAYS
COURT ON W4SITTNGTON
LIFE CONTRACT.
Justice ErIanger Declares That
HOtchkiSs Promised HIM
Not to Ratifg 1t.

Justice Erlanger in the Supreme Court, taking
advantage yesterday Of another opportunity TO
give his opinion of the absorption of the Wash
ington Life Insurance Company, of this city by
the Pittsburg Life and Trust Company, char
acterized it a gross fraud The justice
said that William II. Hotcfkiss. State Superin-
tendent of Insurance. had approved the rein
surance contract, although he had told the
Court that he would not 90
''Of course" added Justice Erlanger, 'he is
now relieved from any statement he made in
court. since the Appellate Division closed the
case
The proceedings that called forth these re-
marks and produced a lively discussion be-
tween the Court and Frederick NJ. Czaki.
sch for the Washington Life, was motion by
the latter for an extension OF time to file
answer to a suit brought by ex-Justice Leo G.
Dessar This action is one of three the plaintiff
has brought 10 recover on six policies Of the de-
fendant company. alleging a breach of contract
on the part of the Washington Life in reinsur-
ing its policies in the Pittsburg Life. The suit,
which is be a test case. is 5000 policy.
Justice Blanchard a few days ago overruled a
demurrer made 10y the company 10 the COM
plant. In this he upheld the decision recently
rendered by Justice Greenbaum in a similar
suit brought by 3 Herbert Wolfe against the
Washington Life.
OPPOSES MOTION FOR DELAY.
Herbert R. Limhurg, counsel for ex-Justice
Dessar opposed the motion for extension OF
time. saying that the premium his clients
policy. amounting to about 500 was payable
in October. If this paid, he said, the de
fendant would construe it ds a recognition of
the insurance contract and a waiver of pro-
test; if he did not pay argued the lawyer. the
company would probably cancel the policy for
non-payment. He asked the counsel tor the
70 IN Sfj lat ~ 10
withhold the premium money pending a settle
ment of the issue
Mr.. Czah said that he could not agree 10 this
proposition without consultation with the chief
counsel in Pittsburg. He offered, however. 20
give a bond for S14.O00 double The amount Of
the action. Justice Erlanger, in refusing 10
grant the stay said
If the defendants win. they VIII probably de
clare the contract void with great gusto. but
they shall not do it IL can prevent it The Ap-
peate Division has ruled against me in my
contention, but l still concur In my own opinion.
and nay conviction is as strong ever.
If ever gross fraud perpetrated on
policyholders this IS one. They removed the
$1s.eooOo0 worth OF assets Of the Washington
Life overnight"
Mr.. Czad nterjected:
Il appeared lefore the Appellate Division
with ex-Judge Hatch and ] know something
about this matter that has not come To your
honor's attention. The State Superintendent Of
Insurance has ratified the reinsurance con-
tract"
Yes" replied Justice Erlanger, the Super
intendent of Insurance gave promise IN
writing that he would never consent to that re-
insurance contract. OF course, he is now re
lieved Of any statement made in court. since the
Appellate Division has closed the case. Never
theless he told me that he would never ratify
the so-called merger"
SAYS REMARKS MAY WORK INJURY.
Then MI Czaki said with some spirit:
These remarks, your honor. will circulate
widely in the public press, and might work
great injury to the Washington Life"
1t was agreed that Mr.. Czah should accept
within ten days the stipulation suggested by Mr..
Limberg or file an answer to the suit.
Soon after the PittsbUrg Life absorbed the
Washington Life. last December. William Hep
burn Russell. policyholder. brought action
for receiver. The case came before Justice
Erlanger VINO regarded the application favor
ably.
Ex-Judge Hatch and Henry A Rubino issued
| a statement considered as rejecting on the
| Court, whereupon Justice Erlanger threatened
! Rubino with disbarment proceedings Mr..
! Hatch wrote explanatory letter denying any
intention TO reflect the Court. Rubno
mained silent, but action brought against
! him. The Appellate Division subsequently, re-
| versed Justice EFlanger
one Of the pleasantries between Court and
counsel YESTERDAY was when Mr. Czak8 said in
/ opening his case. Your honor knows more or
/ less about this Washington Life affair"
! More" replied the justice. smiling