, 1881-02-06
THEY MUST PAY.
.
BAD News for the Stockholders OF
the Republic Lite, r
But Good Tidings for the Policy-Hold'
ers in the Concern.

ers in the Concern.
An Interesting Decision from the su"
preme Court
r.ha decision Of the Supreme Court Just fled
| at Ottawa il the case Of S. D. Ward, Receiver
| Of the Republic Life-1nsurance Company,
| against J. Y. Farwen and others Is one OF great
| and widespread interest. This was. In Short
| bill to enforce the liability Of the stockholders
t OF the Republic Life Insurance Company. Inc
! latter WIS incorporated in 1863 under speclnI
charter, first with u capital stock OF $5oo.0oo,
which was soon I'D to S., ,00o,O00. In 1871
| the Auditor Of State filed petition to wind up
its affairs, which resulted in the appointment or
q Receiver, g. D. Ward, and the issuance Ut an
| injunction preventing the Company fro"
transacting auy business. Subsequently Ward
! flied u bill, finding the Companys assets iusuih-
| cicut to meet it liabilities, for the
| purpose OF making an assessment of
t 60 per cent un the stockholders, anu
| also to upset certain scaling arrangements. by
| which tile Company Ind taken up stock On
which - per cent had been paia ah1 ssueu I,nf ,u
| The Circuit Court dismissed the Dill. ahu ine
Appellate and Supreme Courts affirmed that DE-
| cIsion 4 rehearng was then obtatned III Tue Ut
! ter Court, aud lust week an elaborate opinion
| was filed reversing the furincr opinion,
After rehearsiug the facts at some length, tho
| Court said ono OF the must important ques nons
in the case was tho cottstltutionalty OF the aot
Of 1874. under which the Receiver was appoint
ed, and which was strongly denied BY the stocl~
| paired the obligation Of the contract between
the Suite and the Company. That part az Of the
act in question OH which the validity Of the pro-
ceediug BY the Auditor mainly. depended pre-
| yldcd '.that If the Auditor of State, on ex-
in Of any sr of ta
that =. its condition IS such as to render its
further continuance in business hazardous to
uestaon s to juase Of any Circuit Court q this
State TO issue an Injunction re5tri:nlng such
Company, in Whole Or in part, from further pro
SHALL be discretionary with such Judge either to
order Tor such company, upon such notice as
he nluy prescribe, to show cnuso why suid In
junction should not ISSUE. or to cause
herring to be had On complaint and answer Or
otherwise. as III orduary.proceedings IN equity,
before determining whether IN Injunction shall
be issued. He may in nll such cuses make such zen
and in case atter dH henFE a;s Of a
perpetuate such injunction, and make
ali such orders and DEGREES Us may
Dsobs Ss further ae
Whether 1ho Legislature had power to authorize
Of the lcompany on the grounds set forth in the
| petiI1or. Such u question had never YET been
expressly decided The grant of charter to II
| corporation. it was well settled, constituted
| contract between the State and the cOrporltors
Of the Company. nnd, rs consequence, the
! Legislature could not, when such right had not
| beeu reserved Ia the charter, eigeaft the
! SAME any new terms or provisions
WITHOUT TIE CONCURRENCE
and assent Ut the corporation. Certain terms
and conditions were. however, part Of oil such
| contracts. by implication. one OF which was, as
| much as though expressed, that such new cor
porntton should manage IT'S affairs so us not to
become dangerous or hazardous to the State or
! community In and with which It transacted its
business. While one Legislature could not bind
its successor. yet might, in The exercise Of its
witch the state would be bound to the same ex
tent IS individuals But atl such con.
in in the Exercise of its police power to adopt sueh
2T5 Us V for cons h
| tutional limitations, the rights OF all persons,
whether natural artificial, were subject TO
might deem necessary for the general welfare:
| and it a Fundamental crror To suppose
there vas any difference IN II shsr rsspeft be-
sons. Just Us a person by dissegarding the
rights Of Others might forfeit NOT only his
duetig its Affairs as to defeat the Objects Of It's
promoters aud the designs ut the Legislature in
creating it might forfeit its right to further
IN artificial being. The fact that the stockhold-
ers might be personally injured by such step
was no sufficient reason why it should not be
| amply warranted the conclusion that the Legis-
iature was authorized, III the proper exercise of
lations aud legislation as would eifectualIy pro-
| tect the community from losses aud Injury Incl
dent to public business conducted by corpo-
ration under i charter from this State, where
such business had becnme hazardous, and would
probably result in financial Distress and disap-
| puiuted hopes tn those who, in ignorance of its
condition, did business with it. The same
answer could also be made to the objection that
tic act changed the coutraet rights OF the Com
tered Into by it with Its polieyhollers prior to
THO passage Of the statu1e
fucto in its operation, and created new cause
Of forfeiture. not cxisttnP before. Such con-
on Of the
financial condition OF an Insurance company
was such thnt it could not make good Its losses,
to continue its business any longer. for to do SO
would be u palpable fraud on those doing busl"
s ac o It no d
follow courts we're without Dover to decree
dissolution. Moreover. Legislatures must be
complications us they arise. The statute then
only afforded IL new and highly appropriate
t remedy for reclafnln9 by the Stnte the rights
uud privileges conferred on companies by their
charters, where there bud been misuser or
manifest abuse Of them, aud such HI act the
Legislature was authorized TO pass. Still lanother,
anu u constitutional objection to the act, was
that it did not pruvide for triul by jury. But the
Constitution did not require that chuucory cases
should ba tried by u jury, and Courts of Equity,
it was we'll settled, might, except where there WIS
some statute TO the coptrary, If they thought
proper pass upon I'LL questions Of fact involved
iu Il controversy, without it jury. A suit to wind
up IL com pany's a1ars was not a mere statutory
legal action required to be prosecuted on the
equity side Of the Court which might, il the law
SO directed, be brought with equal convenience
and propr!ety On the law side; but, on the con-
trary, was both i'll Its procedure, nature, and ef-
| feet GQQituAiH BEtiQu, Such being ft3 Edlr.
ucter, there was NJ more necessity for jury In
1t than In any other chancery cnsc, and the act
could not for that reason be called uuconstItu-
tional- The next objecron to the act was that 1t
| DEPRIVED THE STOCKHOLDERS
Of their property, liberties, and franchises With
out due process Of law, There was force in
that objection, The act provided for u full
hearing on due notice. If the stUckhctdcrs were
not fully represented by the corporation ilself,
| they could be personally brought into court.
But on the other han.l the Court wAs not au~