Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1912-11-08
STATE GETS INTO
COSMOPOLITAN
LITIGATION
Intervention Petition to Take
Over Management Of Insur-
anCe Company Is Filed.

State authorities today decided to
take hand in the affairs Of the Cos
mopolitan Life Insurance Company
and, If possible, obtain control of the
company's management in the interest
Of policyholders under the provisions
II the new insurance act
AT the instigation of Insurance Com
missioner W. A. Wright, Attorney Gen
sral T. 5. Fielder, who has held the
possibility Of states intervention under
dvisement for several days, went be
fore Superior Judge Bell and asked for
= rule requiring the company's attor-
eys to show cause why the state
S lould not assume the management
The formal intervention filed by the
ate's attorney simplifes the litigation
over the affairs of the company now
under way in third division Of superior
court. If Judge Bell sustatns the
states demands and names Insurance
Commissioner Wright as receiver for
the company under the new law. many
OF the stakeholder suits now PENDING
viii be Withdrawn
Test of New Law.
Such an action on the pam Of the
court presages a lengthy fghteover the
constitutionality Of the insurance act.
FOR officers of the Cosmopolitan We're
authority today for the statement that
the company win fight state lnterven-
lion as consistently as it has fought the
stockholders suits.
We are all right" said Joel F. Ar.
mistead. general agent of the company
and defendant i'm the numerous suits,
and we expect to show the people OF
Atlanta that we are. Not only is the
standing. of the Cosmopolitan attacked
IN these suits, but the majority OF the
Southern companies organized in the
same manner"
Coincident with the states interven-
ton. and probably unknown TO the
state authorities. directors Of the Cos
mopolitan met in the offices in the Third
National Bank building last night and
ratified a new contract between the
company and Armistead. which reduced
by so per cent the latter's commissions
of the sale Of insurance as general
agent. II was the contract existing be
tween Armistead and the company that
has played a conspicuous part in all the
litigation and finally caused the state
to take a hand in the company's ar
fairs
Claim Contract o. X.
officers Of the company said today
that both Insurance Commission
Wright and Deputy Commissioner
Copeland had said that such contract
as ratified last night would be accepta-
Bile to the state. James L. Anderson. |
one of the attorneys for the company. |
said at noon that he had not been no.
tified that the state expected to inter-
vene, and declined to state how action
on the part OF the state would affect the !
court gases now being tried.
The original suit against the Cos
mopoNtan company was brought sew
eral months ago by Dan G. Sudderth.
former stock salesman. Since tho
filing OF the Sudderth suit and it's be-
ing placed on trial, numerous stock
holders, dissatisfied with the compa-
ny's affairs have interviewed on Sud
derth asking the court for n receiver.
1t has been maintained that the com
pany was not properly organized, has
been lavish in its expenditures has
contract with Armistead that will even
tually wreck it If it is not now insolv-
ent
These charges the company's attor-
neys in answer and demurrer have de-
MED in toto and have introduced into
court evidence to show that the COM
pany is solvent and that the contract
between Armistead and the company is
no different and dangerous to the com
panys welfare than the contracts made
by other Insurance companies.