Savannah morning news. [volume] (Savannah) 1868-1887, 1883-05-31

The Southern Mutual Insurance Com
pany and Its Reserve Funds.

The Southern Mutual Insurance Com
pany and Its Reserve Funds.
An important ease has been called in
Clarke Superior Court in Athens. 1t in
volved the disposition annually of quite a
large amount of money, and contained
some interesting points of law. 1t was
also remarkable in that it originated out
of the petition of a corporation to the
courts for direction as to the expenditure
of the interest upon a heavy surplus
fund. and was mainly a friendly suit in
which attorneys were employed on
both sides for the purpose of test
ing the case in all its merits.
Over a year ago the Southern Mutual In
surance Company. of Athens, Ga, filed
in the Superior Court of Clarke county a
bill asking advice as to the disposition OF
the interest upon their reserve fund. This
fund has. by virtue OF exceptional pros
peritv and fine management, grown into
something over a million dollars, and the
annual interest amounts to about one
hundred thousand dollars. For several
years the officers. through the board Of
directors, were instructed to apply this
interest towards the payment OF dlyl-
dends, and for three years or more the
Ompan paid enormous dividends
sometimes as much as 50 per cent.
Finally some doubt arose in the
minds Of the directory as TO the
propriety of such a schedule. and
prominent officers of the company
differed over the manne of dispOslng OF
this money. The question was asked
whether present policy holders were enti-
tied to the interest Of this fund, or whether
every mar who had ever insured in the
company had an interest in it in proper
ton as the amount he had paid for insu-
rance had contributed towards the swell
of this reserve fund. The question then
arose. to whom does this money belong?
If the interest on the reserve fund be added
to the principal, i'll the course of time
there will be a reserve u so large as to
be unmanageable.
The difficulties of determining these
points were twO-fOld. First, there are
absolutely no presidents to guide, such a
case being unparalleled in the history of
corporations. Second, the charter ana
the bylaws of the company made no pro-
vision for any such contingency, as it was
not a~pprehended that the surplus fund
would ever become so large. To bring the
matter properly before the courts for adju-
dicatiOn, and develop all the points at
issue, the Southern Mutualhave employed
Messrs. Pope Barrow. CObbs and Erwin,
of Athens, and N. j. Hammond, of At
lanta, to represent the present ~stOckhold-
ers, while Messrs. jackson and Lumpkin,
of Atlanta, and Carlton and Lumpkin, of
Athens, will carry the side of the old
stockholders. If the court holds that
every man who was insured in the COM
pany in the past is entitled to his share Of
the profits, a still more complicated ques-
ton will arise, who will find out how
much he is entitled to. A contrary de-
cisiOn would continue the dis%pensatiOn
of tho anfarCgf nG hnfora I'm aHnnnnf nf
the unusual character of the case. it eX-
cites general attention in Georgia, the
Southern Mutual carrying risks in every
section of the State. 1t is being tried be-
fore Hon. n. l.. Hutchins, Judge Of the
Western Circuit.-AuguStd Chronicle.