Savannah morning news. [volume] (Savannah) 1868-1887, 1884-06-13
rHE SOUTHERN MUruAL's PUN.

R0tcT -bO1oeFs-Ihe Ease to be Heard L
in Clarke Superior Court Next Week I
How the Fund Accumulated.
Last Tuesday the Supreme Court Of |
Georeia was called upon to decide case |
in equity from the Clarke Superior Court |
as to the division and reservation Of a
large fund which has been accumulated |
BY the Southern Mutual Insurance Com
pany at Athens since It was first char
tered. about thirty-eight years ago. The
total Of the amount In question Is said 70
be 1900, 000.- The report OF the decision
was published on Wednesday. but the
full text of it did not reach here until yes
terday. when a reporter Of the MORNING
NEWS called on T. H. Harden. agent Of
the company in this city, who remarked
ssThe Southern Mutual Insurance Com
pany was organized in 1876 and chartered
as a life, a marine and fire insur-
ance company, with the understanding
that the policy holders would share in the
accumulations after paying the losses and
expenses incident to the business Of the
company. The company ran along few
wears and the business demonstrated that
the life and marine departments Of the or
ganization were burden, rather than an
advantage. to all concerned inasmuch as
the losses in those departments absorbed
whatever profit was made in are insur-
ance. Hence the life and marine branches
were done away with, and since that time
the affairs of the company have been in
an exceedingly prosperous condition, with
large sums of money annually accumu-
latine to its credit in consequence OF
resolution adopted by the company which
provided that 10 per cent. OF its pronts
should constitute reserve fund. Inc
officials of the company naturally In
nuired. sto whom does the reserve fund
beloneY Some held that it was the prop
ertv Of the original policy holders, while
others maintained that 1t belonged not
only to the original holders, but TO all per-
sons who had ever held any OF its policies
and paid premium OF insurance thereon.
The company's Board of Directors lnstl-
tuted inquiries on every side, but could ma
no one to answer the question, and none
of the records of the courts in any part OF
the country contained any decision which
solved the problem. The directory then
deemed it proper to introduce the subject
formally to the State courts, and en-
ployed Hon. Pope Barrow and Col; s. 7.
| Thurm0nd for that purpose. They Sc
lected two representatives from the
original and two from the
| present policy holders TO repre-
| sent the two sets of policy holders as de-
fnndanta anA nrovAd th.,. a.. lie sets referred
to should be bound by the decree of the
| court. Each party defendant admitted
| the allegations of the bill, and claimed
| the surplus fund as we'll as the income
| arising therefrOm. When a judge was
| found who was not interested as policy
| holder, the case was called in Clarke Su-
; ;,;.;c Court at Athens, with Judge Sneed,
of Augusta, presiding"
"AoW, il seems to me-" continued Mr..
| Harden. esthat If the insurance company
| - 40 led for cornn Of the DOiiPV holders
| to bring suit against the corporation II
would have been better, for the reason that
| the amount due to such policy hold
or as his share could have been
| easily determined. AS for Illus
tratiop. suppose a cotton merchant In
| Savannah, about ten years ago, received
on commission bale or two OF the staple
| from farmer Jones, and while holding it
| had insured the same IN the Southern d u
| tual, and afterwards, when making up his
account with the farmer, had deducted
| the premium from the bill, the question
which the court would determine is
| whether the merchant or the farmer should
| be recognized as the policy holder
| and share in the division of the reserve
| fund. The Supreme Court the other day
| decided that a mutual insurance COM
pany, unless its charter otherwise pro-
| vides. is governed in the main by princi-
| pies of partnership law, and that those
| who have held, as well as those now
/ holding, policies and contributing by
| their premiums to this reserve fund are
| entitled to share in the distribution
of the same according to the amounts
contributed. The company went into the
courts for direction, and 1t cannot now
| saw who shall or shall not share in the
! fund. 1t must abide by the instructions
which a jury may recommend at the
| Clarke Superior Court, which cOnvenes
next Monday, the 10th inst, at Athens.
! That Jury will first have to determine
what portion of the 81, zoe, 900 the company
| shall be permitted to retain to meet its
running expenses and probable losses.
! Now the policies of insurance of the
Southern Mutual in Georgia represent
| $1S,O00,0 1000. The policies issued on prop
! erty by the company in the Savannah
| office amount to over $780, 900. Hence
| the question for the jury to determine
| first is, how much Of the 81 ,200,-
| 600 shall be allowed this COM
pany TO meet risks on lS,000,0 900. 1t
| is said that 100000 would be sufficient,
but | am inclined to doubt it. The
amount paid by the company last year
was about $164,000, and / think that
sum ranging from 100000 to 100000
should be allowed"
.sThe proceedings in the Clarke Supe-
rior Court promise to excite a great deal
of attention, thenW suggested the re-
porter.
Yes, sir. The officers of the COM
| pany at Athens will have to be heard as
we'll as the testimony of a number of their
agents and policy holders. A number of in
| surance experts will also be called in and
| their opinions given as to what amount
| constitutes a safe reserve. Then an officer
will have to be appointed by the court,
| to examine the cOmpany's books and
ascertain who have been policy hold
| ers during the past thirty-eight years.
| A good many of these holders are dead.
Their legal representatives will have to
| be found. In a number of cases many
who held policies left no administrators
| or executors and vet the heirs of the hol-
ders will be entitled to a share in the dis
tributiOn. Besides many holders have
moved out OF the State and it is probable
that by the time all the laims shall have
been ascertained and paid, the
company will have done enough business,
and will have accumulated so much
money that the amount to be distributed
in compliance with the direction Of the
court, will be fully made up"
''When there are so many policy hold
ers. each entitled to pro rata interest in
the distribution, how much will a person
who has paid small premiums for few
years only receivep
at is not likely that his pro
rata share will amount to much.
The other day party paid 60 cents
premium on insurance. His pro rata
share will not make him rich. The Board
of Directors, however, are anxious to have
each share distributed by direction of the
court, in order that the company may be
protected. For some time where an old
policy holder might have been expected to
pay 500 annually to the company, he has
really paid but $50, the other $50 having
been allowed him as his dividend, When
the distribution shall be made, his pro
rata share will be estimated on the basis
of $50, the other $50 having already been
awarded him as a dividend. A person
who annually pays $1,000 will receive as
his pro rata share twice as much as he
who pays $500, and so on, less the diyi-
dend.
A Card.
In consequence of the general stagna-