Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1914-06-04
STATE TREASURER TO
ANSWER TO SUPREME
COURT AS TO BOND


to the financial standing of said COM
pany and had full and complete knowl
edge of the financial standing and condi-
ton of said company all during saio
time.
The relator further AYERS that at the
time of the tender of said bond to said
Governor as hereinbefore set forth said
American Fidelity company was in a
serious financial condition and to such
an extent that there was an impairment
of at least ffty-three thousand 1857. oO0)
dollars of the seven hundred fifty
thousand ts750,o0o> dollars of paid-in
capital of said company; that said COM
pany was then and had been for some-
time past doing business at n loss; that
the condition of said company prior to
said tender of said bond had been such
that said Deavitt as insurance commits
sionor as aforesaid and acting in behalf
Of the State of Vermont and in coniunc-
ton with the insurance commissioners
of the States OF Massachusetts and New
York, had notified said company to re-
frain from declaring and paying dividends
whatever upon its capital stool. without
the consent of all Of said insurance cons
missioners. to which said company
agreed and assented, and that said
Deavitt at the time of the tender of said
bond as aforesaid we'll new the facts as
to the condition of said American Fidelity
company as hereinbefore set forth bur
did not impart to said Governor said
facts nor did said Governor then have
any knowledge of the same.
The relator further AYERS that said Gov
ernor did not then approve said bond for
the reason that he did not think it expedi-
ert or wise or subservient to the best in
terests of the State Of Vermont to have
only one surety become and be responsible
for the whole penal sum Of one hundred
thousand 100000 dollars specified in said
bond and that said Governor then and
there notified said Deavitt that he would
not approve said bond unless said Deavitt
procured additional sureties thereto.
The relator further AYERS that said
Deavitt, though repeatedly requested by
. said Governor, neglected to furnish addi-
tional sureties to said bond until the sew
enth day of February, 1913, when said
Deavtt re-tendered said bond with the
instruments thereto attached as herein
after set forth to said Governor for his
approval.
The relator further AYERS that between
said fourth day Of October, 1872, and said
seventh day of February. 1913. said Amer
| lean Fidelity company declared and paid
| a dividend Of four "a per cent. upon It's
capital stock without the consent of said
| insurance commissioners of Vermont,
| Massachusetts, and New York, or any OF
| them, and in direct contravention of said
| understan ding and agreement between
said company and said insurance commits
| soners which said dividend had not been
earned by said company and all Of which
said Deavitt well knew on and before said
seventh day of February, 1913, but which
| said Governor did not then know.
The relator further AYERS that on said
seventh day of February, 1918, said Deav-
lit again rendered said bond to said Gov
ernor for his approval; that said bond ms
then rendered had attached thereto in
| strunents made and executed by the
Southwestern Surety Insurance company
the International Fidelity Insurance com
| pany, the New England Casualty com
pany and the Southern Surety company
which instruments were in words and fig
| ures as follows:
| CONSENT TO SEGREGATION.
Executed in TriDlicate)
Whereas, the American Fidelity COM
pany, a corporation of the State of
Vermont, with its principal Offices in
the city of Montpelier, has heretofore
executed its bond on behalf of Edward
H Deavtt as treasurer of the State of
Vermont, IN the penalty of one hundred
thousand Csl0O0dO dollars, conditioned
as to the faithful performance Of his
duties as treasurer for the term for
which he was elected on the second
day of October, 1912, and
Whereas, this rider is attached to the
reinsurance agreement between the
Southwestern Surety Insurance COM
panY, a corporation under the laws of
Oklahoma, with its principal office at
Denison, Texas as reinsurer, and said
American Fidelity company, as rein
sured, under the terms of which agree
ment said Southwestern Surety lnsur-
ance company has agreed to reinsure
said American Fidelity company to the
extent of fifteen thousand $4,000 dol
lars. plus its proportion Of all costs
and expenses, of fifteen 05) per cent.
of the value of the whole amount of
said bond, and
Whereas, the State of Vermont for
its use and benefit has required said
American Fidelity company to subro-
gate to II, the said State of Vermont
for its use and benefit, all right, title
and interest which ii. the American FL
deity company may have in said rein
surance agreement attached hereto
Now, therefore. the said Southwest
ern Surety Insurance company hereby
consents to such subrogatiOn by said
American Fidelity company in connec-
ton with said bond and agrees to pay
to said State for its use and benefit
| fifteen per cent. Us per cent? of what
ever sum of money the American Fl
deity company may become liable to
pay and refuses or fails TO pay rs per
said bond of said Deavitt
In witness whereof the said South
western Surety Insurance company has
signed this agreement and tereunto set
its seal this Goth day Of January. 1918.
SOUTHWESTERN SURETY IN
SURANCE COMPANY,
BY John 3. Murphy,
Resident Vice-President.
corporate seaD
Attest: John Saptiste,
Resident Secretary.
(Here follows similar consent to sub
rogation as regards other companles)
COULD NOT DO BUSINESS IN
VERMONT,
The rclator further AYERS that whe
said Deavitt retendered said bond t
said Governor for his approval on tn
eth day of February, 1918. as hereinbe
fore set forth said Southwestern suret