Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1879-06-13

REPORT OF THE EXAMINING COMMITTEE
To the Policy Holders Of the Champlain Mutual Fire
Insurance Company:
Al meeting of the policy holders of said COM
pany, held Burlington on the 10th day OF April.
ls,9 resolution was passed as follows: THAT a
committee of three policy holders, or members OF the
company. he appointed 10 inquire into the legal
status OF the company as TO whether the assess
ment which certain Individuals have assumed to
make as directors of the company, is legal assess
ment and enforceable against the members SO as
sessed as 10 the debts and assets of the company
and of what they consist IN detail and rs 10 the
method OF calling legal meeting OF the company.
And that this committee he authorized TO employ
competent counsel and an accountant In said mat
tiers, and TO make report at meeting TO be called
The undersigned were appointed such committee
and having attended 10 the duties imposed, report
follows:
We frst consulted with Judge Prout, and obtain
ed his written opinion upon the legal questions i'll
yOveL In the investigation We were appointed
10 make which is hereto appended. As soon as
this was obtained, we met at Burlington, on the
18th day of April and proceeded with the investga
ton of the affairs of the company, and IFS Official
management from ii organization TO the present
time, having employed Mr.. +. L. Temple of Rut-
land. an able and experienced insurance account
ant, to aid us in the examination of the books and
papers OF the company, and 10 prepare the fnan-
cial statement which Is made part hereof.
The company commenced business in the Sum-
mer of ls.3 mainly under the management OF gen
tlemen residing in Burlington. The company Kept
a complete set of books which show all its transac-
tons from first to last, and very careful inspec
ton satisfied us fully that the hooks are accurate
and present correct statement OF all receipts and
disbursements.
The statement hereto annexed shows what these
have been, together with the present liabilities and
assets of the company. In view Of the depression
of business generally since this company was or
gained. and as compared with the experience of
other ms urance companies during the same period,
the business of this company was reasonably pros
porous and successful until September, 1877. Its
assessments had not Till that time averaged much
II any more than those of other and older COM
panies in the State. An assessment of Az per cent
was made on the LIST of September, lsii, which was
losses 10 thai time, except two which the company
was contesting rs fraudulent. From September,
1871, 10 January, 1879, this company suffered very
heavy losses, will appear by reference TO the last
report of the Directors dated March 5, 1879, which
was sent TO all policy holders.
We investigated the character of the risks upon
which these losses occurred, and found they were,
on the whole. fair average risks. many OF them be-
ing upon property on which other conservative
had issued policies, and which suffered
with the Champlain in the losses These heavy
losses required that the business of the company be
pushed with great yigor IN order 10 Increase the in
come but instead of that there more or less dis
sension in the management, and no successful eff
fort was made Ia a,Nanc the business OF the COM
pany. Mr.. L. W. Peck and Mr.. Sayles W. Nichols, |
who had been respectively President and Secretary
Of the company from the organization, rendered |
their designations In February, 1878 Al the annual
meeting OF the policy holders in March, 1878, Board
IF Directors elected, but they were unable for
some time 10 ind any suitable person TO accept the
Presidency. Some effort was made to borrow $10,- |
100 TO meet the pressing demands, but that failed
An assessment of 6& per cent was laid In Septem-
Der, ISIS hut this too small TO pay outstanding
demands even If collected, and only about co per
.ent of il was collected. The receipt given for this
framed to lead policy holders to
he conclusion that II paid at least ali the losses
stated on the back OF the receipt but II fell short OF
his TO the amount of between s. 900 and IS 600.
losses continued 10 occur and demands against the
company TO increase. The Directors had frequent
md numerous meetings, but, failing TO devise any
'ther remedy for the emergency finally in Decem-
,er decided TO suspend business, and laid an
nent OF 70 per cent TO pay OF liabilities and ex-
penses o! closing up the company.
The managing oflicers made in some instances
THAT proved 10 be injudicious expenditures but we
10 NOT md that there has been on the whole extrav
gance IN the management. The officers, or some
4 them, seemed to avoid responsibility as the COM
ANY became involved, and manifested no such de-
nee of energy as the emergency and welfare of the
ompany demanded Judging from the class Of bust
less that this company had and from the expert
nee OF other mutual companies during the same
'er.Od, We think that with a united aud strong
management the company would have passed the
rlsis. Under these circumstances the debts have
ccruei. and the lol.cy holders are holden 10 pay
helm We have sought able counsel, and
ave enIrayorcd 10 slate to them the exact
acts an behalf OF the policy holders and nave
eceiyed the aiyice hereto appended The
financial statement hereto shows what the debts
re, and thai an assessment OF 10 per cent, II pad
TGaiptiy, will hquidate them, unless We are in
rror as TO those matters wherein we have been
bllged 10 make estimates Litigation and delay
I'LL increase expenses, and proportionately the
required. The charter of the company
u strong one, and makes all buildings insured.
nd lands on which they stand, pledge in the
ature Of a mortgage, TO secure the payment of
ssessmenis The present officers Of the company
re legal Officers, Notwithstanding they have not |
led bonds.
The financial statement hereto shows frst, the
ecepts, expenditures, assets and liabilities from
he organization of the company 10 March I, ISIS
soOnd, the same TO April 49, lsl9 According 10 the
gal opinion hereto, IN which we concur, the policy
Olders could make no successful defence TO an
ssessIneni sufficient 10 pay the debts, including
agtimaie expenses of the company II is plain, |
erefore, that 1t would he for the best interests of
Obey holders tnat such assessment be made and
and al once, and the business of the company
losed without litigation, AMI before further ex-
enses accrue.
One item OF liabilities is s9.9 due directors for
tending meetings. Several of the directors have
formed US that they will waive their part of this
lain. and we think they all should and will. With
his saving and probable discounts from claims on
nadIusted losses, we think a 10 per cent assess
lent VIII pay debts and expenses of settlement II
o. otherwise. In respect To the printed
latenent issued in September, ISIS and pur- ,
ortlng 10 he statement by the directors,
e md that the ,lgures therein were substan- |
ally correct. 50 far they went. but a full |
nancial statement OF the company 1t was incom-
lee, IN that il did not rs We understand IT, state
he unadJusied Liabilities of the company, notwith-
landing notice of some or all of them had then
cen received, The term - ali losses therein being
My the losses that had been adjusted, and for 4
Inch orders On the Treasurer had been given and
ntered.
II there had been such default uu the pant OF the
Ulcers of the COMPANY or any of them as 10 make
re advised by counsel and consider extremely
OubtfuD. IL would be no reason for delay IN clos
X up the other matters Of the company. such
ability would lie no defence To the policy holders |
)r the debts VI the company, AMI We think II would
G unwise 10 eonilnae expenses and increase LA
llities 10y delay pending conirsEersy with the
lrecors, even II they are liable, when such con- |
oversy can be hal just well after the other
laiters are settled, and the debts of the company
aid.
The resolution under which We have made this
lNestigaiiOn directed Us 10 cause a call Of "A meet
" OF The policy holders " be made, 10 which
luuld make our report.
The Charter and Bylaws OF the eoiBpany Provide I
iat special meeting OF the policy holders may he
allied 10y the directors. We have therefore re-
nested the directors to call meeting To which
ay formally make report, and they inform Us that
ley Will call meeting 10 be held at Burlington,
nne 70, lisp !: was our purpose TO have the report
rinted and distributed ~ ~ policy holders Us soon
possible, but they have furnished as with no ! .
inds with which TO do II, and We therefore are
Iliged 10 resort 10 the newspapers 10 publish this
.pori, W order TO bring II within reach OF the
Dlicy- hnders VI the earliest practicable moment.
Respectfully shhII!ited,
W. q. VEAZEf, }
HIRAM ATKINS, Committee. {
X. +. PARKER,
Iuils tha