The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1879-10-19
death CLAIMS DEDARRED.
Important Decision of the
Court of Appeals.
POLICY HOLDERS AND RECEIVERS EXPECTATIONS
What Is Left" Of the Sc
curity's Funds.
EARLY SETTLEMENTS PROMISED.

@FNNSb IL GEiVGiNtS tsOV"S-~'
The long looked for decision of the Court OF APP
peals of this State directing how the funds now in
the hands of the receivers of life insurance companies
shall BIO distributed has at length been handed down.
and is said that policy holders will receive
what is due them. The decision is . very important
one discouraging to few. but pleasing to thou
sands At the time the principal life companies be-
came insolvent there were large sums due for
death claims and many receivers favored these
claims having preference all others. Decisions
for and against this preference have been made
by courts this State and in New Jersey The Court
of Appeals has decided to bar out these claims and
creditors In regard to this point the opinion writ
ten by Judge Earle folows:-
The claim is made that the death claims which
matured before the dissolution OF tho company
unmatured policies, and think this claim
properly disallowed by the reterce. Upon the as
sumption. which We have shown to be proper one.
that holders of such policies creditors of the
company, this claim has no basis to rest on. No
decision has been made that can find giving
tho preference claimed. The death claimants have
no clam legal or equitable, upon the funds OF tho
company, and without such lien they can have no
preferences. II is the rule OF the statute. ~
corporation when it becomes insolvent shall share
in its III proportion to their claims "a r. S. At.
u.
one claim is matured gives it no preference
others matured. There is nothing in tho nature
OF lie insurance that gives the preference. One who
has paid his money to carry his policy to maturity
has better right or greater equity than another
who has paid his mo money ,t to carry policy
policy has paid his money not to make
fund to pay death claims. but for insurance
upon his own lite. He expects the benefit OF the
money he has paid. either py receiving the amount
insured ut the maturity OF his policy or damages
tor the breach the company fails to carry his policy
To- utur, IN he extent such a IN
the footing. legal and equitable. with every
other creditor. The opinion OF Chancellor Runyon.
in the case OF Vanatta The New Jersey Mutual
Life Insurance Company. with q copy OF which We
have been furnished, is not in point as that was
mutual company in the charter OF which the holders
OF running poicies we're liable to assessment to
pay death losses.
The above, while rendered in the case of 'sThe
People VS.. The Security Life Company" affects
every company. it being considered the test case.
Many policy holders have claimed that portion of
their premiums should be refunded before general
distribution OF the funds were made. On this point
the decision is:-
It is claimed upon the part of some Of the holders
of unmatured policies that they entitled to have
refunded to them pro rata portion OF the premiums
paid by them before tho out OF the assets of
any other creditors and this claim il based upon the
following provisions of the Revised Statutes u Il. s..
47O, section 75):-"f there shall BIO any open and
poration which in the nature Of assurances
contingent engagements OF any kind tho receiver
with the consent OF the party 0OlulQg Sucl
ensaaemept cancel and discharge the same by re-
funding to such party the premium or consideration
paid thereon by such corporation or SO much thereof
as shall be In the same proportion to the time which
shall remain of any risk assumed by such engage
ment AZ the whole premium bore to the whole
term of such risk and upon such amount being paid
by such receiver to the person holding or being tho
legal owner OF such engagement, 1t shall be deemed
cancelled and discharged against such receivers
Section 1.-THE receivers shall retain, out of the
moneys in their hands. sufficient amount to pay
the sums which they are hereinbefore authorized to
and Jfqo1so
any open or subsisting engagements." This claim
has been disallowed by the Court below. and.
nv he sct OF 1853 the corporations organized un
der it made subject to such provisions of tho
Revised Statutes as were applicable and the sections
above cited not applicable to life insurance
companies. They can apply only to fire and marine
other assurances having definite term to run.
III the case Of running or matured life policy. the
time which shall remain Of the risk cannot be
known. If these sections apply, then the unjust
suit will follow. that the has paid
upon one of these policies the less he will
receive, and the who has paid the least and has
the longest expectation OF fe will receive the most.
These sections applicable only to where
the is indemnity for some certain time
against some risk. and in such the amount
paid for the indemnity may be apportioned If the
risk has been carried half Of tho time. half of the
premium has been earned, and the nearer the risk
mas oeen san the ss h
policy has become to the assured. and
under these sections. therefore. less would
have to be refunded. But life insurance is not an
indemnity against any risk but absolute engage
meut TO nav sum certain at the end of definite or
indefinite time. In such the policy becomes
more valuable it's end approached, and any such
settlement could be made under these sections
would be quito absurd. But the claim Ia made.
the part of some Of the appellants. that the holders
of unmatured policies not creditors but partners
in the COMPANY and therefore. not entitled to share
in the assets until after Of the death claims.
and Of others, creditors.
The Court argues this point at great length. de-
Gliding that the money paid to an insurance
company At belongs to the institution. and the
novel claim Of partnership is not Sustained by any
authority.
Many minor matters incidental to the closing up
Of the receiverships referred to and settled by
this decision. Az the receivers have oil intimated
their Willingness and ability to settle up
the above decision rendered q reporter of the
HERALD yesterday. waited upon the receiver of tho
tails OF the Office. said no thought they would DO
able to settle up everything and close the Office
in about sixty days He could make n dividend ut
once but there several cases in the courts in
which the decision of the referee to claims had
been disputed. The first referee, Mr.. Walker had
barred 3 100 claims. believing that the holders
were not entitled to receive anything. Judge West.
brook then appointed Cunning s. Bedford referee
with the express instructions to consider every
claim found upon the books and to admit all those
which had boon decided invalid by Walker 1t Is
these latter claims that I'm court. Mr.. Hurd
believed that these would not proceed farther
and what little there is will be paid within
two months.
The Following is the financial condition OF the CON-
pany:-
,s.t.- nr-f 90