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. il possible. obtain control Of the
companys management in the interest
of policyholders under the provisions
Of the new insurance act.
Al the instigation Of Insurance Com
missioner ". A. Wright. Attorney Cen
eral T. s. Fielder, who has held the
possibility OF states Intervention under
advisement for several days, went be
fore Superior Judge Bell and asked for
rule requiring the company's attor-
neys TO show cause why the state
should not assume the management.
The formal intervention filed by the
states attorney simpifies the litigation
over the affairs of the company now
under way in third division Of superior
court. II Judge Bell sustains the
states demands and names Insurance
Commissioner Wright as receiver for
The company under the new law, many
Of the stockholder suits now pending
viii be Withdrawn
Test Of New Law.
such an action on the part OF the
court presages a lengthy fight over the
constitutiouality Of the insurance act,
for officers Of the Cosmopolitan were
authority today for the statement that
tho company win fight state interven
ton rs consistently as it has fought the
stockholders suits.
I'VE arc all right" said Joel f Ar
instead. general agent Of the company
and defendant In the numerous suits,
and We expect to show the people Of
Atlanta that we are. Not only is the
standing OF the Cosmopolitan attacked
I'm these suits, but the majority Of the
Southern companies organized in the
same manner"
CoiEcident 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 80 per cent the lstter's commissions
Of the sale Of insurance as general
agent 1t was the contract existing be
tween Armistead and the company that
has played q conspicuous part in all the
litigation and finally caused the State
to take a hand in the company's at
fairs.
Claim Contract o. x.
Officers Of the company said today
that both Insurance Commission
Wright and Deputy Commissioner
Copeland had said that such a 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.
tifed that the state expected to inter-
on the part of the state would affect the
court cases now being tried.
The original suit against the Cos
'mopolitan company was brought sew
eral months ago by Dan G. Sudderth,
a former stock salesman. Since the
filing OF the Sudderth suit and its be-
ing placed on trial. numerous stock
holders dissatisfied with the compa p
ny's affairs, have interviewed on Sud
NSitil aoNliiS tlt Nouit iot u receiver,
1t has been maintained that the COM
pany was not properly organized. has
been lavish in its expenditures has a
contract with Armistead that will even
iually wreck IT if il is not now insolv-
ent.
These charges the companys attor-
neys in answer and demurrer have de-
MED in toto and have introducad into
cour, 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
pany's welfare than the contracts made
by other insurance companies.