The Memphis appeal. [volume] (Memphis, Tenn.) 1886-1890, 1889-02-03

Mr.. Aston Boyd and othercomplainants
in the Arlington and Citizens Insurance
Companies case called at Tue APPEAL Of
flee last night to state that the facts as to
the Chanccllors decision, which is in writ
ing, have been misreprescnted. They
further stated that in no part OF the opinion
is 1t stated that the action OF the minority
caused any damage to the company, and
while the Chancellor thought. the minor
ity had in the heat Of the conflict magni-
fed their grievances vet perfect honesty
OF purpose and good filth was freely ac-
corded them.
These gentlemen cmphatcally denied
tina. the decision OF the learned Chancellor
entirely exoneaicd the officers Of the two
companies in their manner of conducting
the business Of the Arlington Insurance
Company, aud in support Of this they ex-
bibiied portion Of the opinion Of the
court, which is in these words
''ln my Judgment, the practice OF maxi
ing contracts OF reinsurance with the Citi-
zen's Insurance Company, while the exc
Cutiyc officers OF both companies who
make the contracts are the same in both,
is both dangerous and vicious, and II the
= proper steps had been taken 10 correct this
evil before the institution Of the suit,
think | should have perpctually enjoined
this course oi business. IL is entirely inn
proper that m any contract the same
agents should represent both parties TO
the contract, and II X only necessary TO
read the opinion Of the court in the New
York Central Insurance Company against
the National Protection Insurance Com
pany Fourteenth New York Report, page
so 20 see that the Arlington Insurance
Company has assumed a pcrious rcspon-
sibiliiy in making contracts OF reinsurance
with the Citizens Company, rs shown by
the record. In that case Stevens, being
the secretary and director Of the plaintiff
company. made the contract OF reinsur.
ance, being also an agent OF the defendant
company. Chief Justice DEMO, in the
opinion OF the court, says Il think the
Supreme Court was right in the opinion
that the contract Of insurance was invalid,
orthe reasons which have been mentioned.
IL has been settled by long course OF adj
Indication In the Courts OF Equity that a
trustee or agent OF one person cannot
make valid contract respecting the sub
iect matter b. which the trust or agency
when he has personal interest His
constituent, ID Is said. il entitled 10 have
all his skill aud Judgment employed in his
service, but II lac is, himself the other
party 20 the contract, the utmost which
could be expected from a very honest
man would be the ordinary fairness OF an
umpire II II not necessary Tor party
seeking 20 avoid a contract ON this ground
10 show that an improper advantage has
been gained over him. IL Is at his option
IL Nltss fruf
sprctiye OF any proof Of actual fraud, etc.
III was held that the contract Of rcinsur.
ancc was not binding ON the defendant
comnany, because stevens was the agent
'oi that company and also the Secretary
and Director OF the rcinsured company.
TO lr sure II il were shown that the com.
pany rcinsuring knew aud approved OF the
Transaction, ca1o Of liability might be
made out Hut hy changes OF officers OF
stockholdcrs in this ease the entire line OF
REINSURANCE might be defeated 10 the ruin
oil the Arlington Company. Under suct
circumstances this course Of business
ought not 10 be persisted IN while the Off
Gers OF the two companies remain th'
same. and take IL that upon further con
Alteration the managers and slockholden
OF the companies will not assume the groa
responsibility aud incur the obvious per
lis oi continuing TINS puslhcn1 lh tllc Pitn
ent shape Il u not only iraught will
dangers, but IL places the officers them
selves in an improper and suspicious aiii
tudc."
The only reason given by the learne'
Chancellor for not pcrpetually cnioinin
the Citizens Company from rcinsurng ih
risks Of the Arlington, was that IN la
opinion the complainants should have
arsi demanded of the olicprs of the com
pany 10 institute suit 10 correct thi
evil. and failure ~ 10 do, rendered III
Court powcrlcss 10 act at the suit OF Tia
Stockholders.
The complainauis contend that the Ia,
does not require a man 20 perform an I'LL
act, wherefore "a the Arlington was und,
the control Of the wrongloer, II woul
have been idle 10 demand OF them to u
s,iiuie proceedings for the purpose OF co
reciing wrongs OF which they themsely'