, 1872-12-09
NEWS FOR POLlCY-H0LDERS.
Query: Is the Galloway Barker -Runyon
Contract Contract in LaW2

Contract Contract in LaW2
4 Disagreeable Bone for the National and Stock
and Mutual Creditors to Pick.
Many suits have been brought by policy hold
ers OF the National Insurance Company; and
fertile and exhaustlesa have been the points Of
law that have tripped up the plaintiffs, con-
stantly bringing those unhappy persons to the
verge Of despair at moments when their pros
poets seemed brightest. Among other expedi-
ents resorted to by the euitors, was an action on
the guaranty given by three shareholders Of the
Company to pay all debts outstanding On the 9Th
day Of january, 1870, when the National, it will
be remembered, swallowed up the Stock and
Mutual; the debts Of the latter Company being
secured separately by . similar guaranty given
by Bowen, FolIansbee, and Layton. The most
crushing blow Of all was delivered On Saturday,
for it relates to this guaranty, in the shape
of demurrer to test suit, Rozet Y. Galloway
ct al Tt was 8 demurrer Of the most stunning,
smashing, diabolical kind; and the other side
have taken . week to ponder it. We print
q summary report, with all the authorities:
Rozet d Galloway ct al. being called, Mr- E7-
ans appeared for the defendants, and entered q
demurrer to the Mar, on the following written
guaranty:
CHICAGO, Jan. 8, 18To.-We, the undersigned sub
scrbers agree to aud do hereby guarantee and
to pay and will pay all the dobtB now outstanding
against the National Insurance Company of Chicago
]. n. BARKER,
E. F. RusxoN.
Mr. Evans stated exhaustiyely the state OF
affairs prior to the giving Of this guaranty, the
relations between the National and Stock Com
panies, the formation, career, and amalganna~
tion OF the two corporations, and the winding
up OF their business in January, 1870, when the
shareholdere Bhose names we're appended to tho
the payment Of the then outstanding debts ct
tho oNational and Bowen, Fo11anBbee, and Layton
did the samo for the Stock Mutual; gave q con-
else resume OF the matters charged IN the Mari,
State Auditors duties in relation to- the
care OF assets on behalf OF creditors,-thls
guaranty being among such assets,-and dehn-
ing the debts outstanding IN january, lo70, as
clai1us having already accrued, and not claims
under policies then running, under which losses
might afterwards acc1ue, as IN this case Rozet
who paid for policy terminating IN 1875, on
which there was . loss In the great fire IN 1871,
which subsequentloss conld a6t bete1med 3 debt
in 1870 and YVES about to glance at the affairs
Of the Stock and Mutual Company, when
Counsel tor plaintiff objected that such
matter Was inadmisBable, not being part Of the
Narr-
nothing to do With this his reference was
gimply meant to enltghten the Court as to the
state OF affairs p11or to the date on which the
guaranty was given IN order tnat the 0onrt
might have the very fullest information that it
was in his power to afford.
The Court saw no objection to explanatory
remarks.
Mr. Evans ooncisely sketched the circurn-
stances leading to the absorption Of the Stock
and Mutual by the National, and then referred
to the numerous actions now pending against
tho National, describing their nature and in what
respects they differed from Rozet '. Galloway
ct al. In this suit, he maintained there VAS no
cause OF action The same guaranty was the
foundation OF several similar actions in this
Court brought BY holders of policies issued BY
the National Insurance Company, Whereon the
plaintiffs had not yet obtained Judgment when
suit WAS brought, and wherein the policies we're
issued before the date Of the guarantees, although
the loss or debt did not accrue until twenty-five
months later.
The Court asked it the facts were the sane IN
all suits under this guaranteo-the facts, that ls
to sgy, as to Judgments not being obtained;
First, because the guarantee, if good for any
thing could only apply to indebtedness existing
or outstanding against the National Insurance
Company at the date Of the contrnct.
Second, because there were no contracting
parties to the contract because there were no
parties to agTce to or enter On this guarantee,
and consequently the paper Fas nuda'a
pactun1.
guarantee, and consequently it waa invalid.
Fourth, because Judgment must be obtained
on the policy BET forth IN the declaration before
any canse Of action can exist on the guaranty.
The counsel argued at great length in support
of these points, extending, explaining, and in
sisting upon them, in view Of objections to their
eoundness, As to sDebts," he submitted that
in no event could the paper or guarantee extend
to future or accruing debts, and more especially
on policies issued BY the National Insur-
| ance Company, the matter being one
for adjustment BY the guarantors
Of the two companies as between the companies
only. For definition of Debt, he read Drake
| Benson Y. Campbell, 9Th Porter, ass. AS to
| ssContracts, he insisted there were no parties
| to this contract that the paper had no legal ex-
| istence, no legal character. As to CONSIDERS
tracts, Cd, on page 8 there cannot be deed
! without signing, scaling, and delivering; there
| is no contract if not under seal; there must be
| the consent Of two parties; there must also bo
q consideration.) 1t was asserted by the other
side that the State Auditor was party to the
contract; that ho WAS q legal trustee of the
| poicy-holders; but this could not be, as the
| State Auditor had no power to accept any such
paper this guaranty, OF, it he had accepted it,
give up again 5atntes OF 1s39 aS to 1nsn1 !o
|
powers vested In him in Law. AS to "Judg-
ment,'' tho plaintiff must proceed by showing
cause Of action; he must have Judgment Or
make such averments az would leave no possible
question rs to the debt Cpage IS, Chitty on
Gontracts); must prove there is fixed debt, that
there is no defence. As to mutuality, he read
Parsons on Contracts, page 1s, vol ;, defining
parole evidence, agreements in writing, requ1r-
ing consideration for promises to be stated !;
alse Easts Reports g. page "a vg aa1;s 3pdFoe deo;
| eious. and The decisions OF the French Courts,
laid it down that consideration must be e5.
| pressed, and the same was the fact as regards
most Of the American Courts. He quoted from
D. 160, New Hampshire Reports, vol. /, and p: "a
! Of vol. (withont consideration contract void)
The counsel concluded by saying he would sub
| NIT the authorities to his Honor. and that his
side insisted on all the points in the demurrer.
| Tbs counsel for the plaintiff said the brie1
period at his disposal before the court adjourned
| Is minutes) left him no opportunity to reply te
| The authorities quoted, and after conversation
it was agreed that the case should be passed fol
| one week.
fJync phnK MhTTEpc