Case ID: misc_73/html/0536-01.html
Source: Caselaw Access Project
Author: {"author": "Chester, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Matter of the Election of the Trustees of the Mutual Life Insurance Company of New York.
    (Supreme Court, Albany Special Term,
    October, 1911.)
    Insurance companies — Organization and conduct of business — In general — Officers and agents — Trustees — Qualifications.
    The absence of any provision in the charter of the Mutual Life Insurance Company requiring trustees of the company to be policy-holders, read in connection ,,with the provision that the president “shall be a member of this corporation,” and the practical construction of its charter and the laws relating thereto by the company since its organization in 1842, compel the inference of a legislative intention that .the trustees need not be policyholders.
    Application for an injunction.
    Lester T. Huhbard, for petitioner.
    Davies, Auerbach, Cornell & Barry (Julien T.. Davies, of counsel), for .Joseph H. Choate, Jr., and others.
    Frederick L. Allen, for Mutual Life Insurance Company.
    Thomas Carmody, Attorney-General (Wilber W. Chambers, of counsel), for Superintendent of Insurance.
   Chester, J.

One Sol Rosenblatt has instituted this proceeding to review the election of trustees of the Mutual Life Insurance Company of Mew York, held on the 5 th day of June, 1911. It appears that he was the sole candidate on what was known as the policy-holder’s ticket. There were thirty-six candidates ón the administration ticket, and the principal claim made by the petitioner is that six- of the thirty-six candidates named on such ticket for trustees were ineligible because they were not policy-holders in the Mutual Life Insurance Company at the time of the election, and that he has been elected if any one of the six is ineligible. There is no dispute that thirty of them were such policy-holders. Before the inspectors of election had declared the result of the . votes cast, there was an order made by a justice of the court, which restrained them from further proceeding. The affidavits show, however, that the administration ticket received over 13,000 votes and the petitioner not to exceed 2,200 at such election.

Very many highly technical objections to the procedure in reference to the nomination of the administration ticket have been urged in behalf of the petitioner; but, after a careful examination of them all, I fail to see that any of them has any force that should be given effect to nullify the election. The ‘nominations and the procedure with reference to' the election were had under the supervision of the Superintendent of the Insurance Department, and under the rules and regulations prescribed by him pursuant to law; and to my mind all the provisions of the law in reference thereto have been fully complied with. I will not, therefore, take the time to discuss these technical objections in detail.

The only question that I need to refer to is the principal one urged, and that is as to the alleged ineligibility of six of the candidates on the administration ticket. I fail to find anything in the charter of the company (Laws of 1842, chap. 246, as amd. by Laws of 3851, chap. 60), or in the Insurance Law (Consol. Laws, chap. 28) which requires a trustee of this company to be a policy-holder.' A very learned and lengthy argument on this subject has been made by the counsel for the petitioner, but the whole matter rests in a nutshell. Section 4 of such charter provides that “'The Board of Trustees shall consist of thirty-six 'persons all of whom must he citizens of this State; they shall elect a President annually who shall be a member of this Corporation ;” and section 3 provides that the persons therein named who are insured in the corporation “ shall thereby become members thereof.” The provision in the charter is clear that the president must be a member of the corporation. There is, however, no provision that any trustee other than the president shall be a member. The provision that the president shall he a member and the omission to provide that the other trustees shall he members are significant and show that the Legislature, when it required this qualification for the president and omitted to require it for the other trustees, intended that such other trustees need not be members; and when it required that the trustees should be citizens it showed the intent not to impose any other qualification upon eligibility. Even that provision appears to have been .changed by subdivision 10 of section 70 of the Insurance Law, so that now only a majority of them are required to be citizens and residents of the State. The purpose of the law is clear and. shows that the. Legislature intended to leave the members who were entitled to choose trustees free to select any persons they _ desired to that office, so long as a majority of them"were citizens and residents of the State; and there'is reason for this position, for many persons possessing the qualifications to render efficient service to the company in the office of trustee would be unable to become members of the company by reason of being over the insurable age, or because of being physically unable to pass the medical examination requisite for insurable risks. It appears from the papers that the practice of this company from its organization in 1842 down to date, acting under the charter and laws, has b.een in harmony with this construction; and many men have, served and now are serving as trustees who are not policy-holders and, thérefore, not members of the company 1 This practical construction of the statute during all these years, without any question on the part of any one interested in the welfare of the company, is entitled to much weight.

The injunction contained in the order to show cause should be vacated and the application denied, with costs.

Application denied.