The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1895-07-24

that the underwriters OF the SOutn
and North American Lloyds "depos-
tied $500 each, and that those of the
New York and Chicago "deposited'
$500 each. There are thirty of the
former aud thirty-eight of the latter ;
so that together they may be suppos-
ed to have, along with their maxi
mum liability put up in bread and
butter cash a total of $26,400. IF we
assume, which would be quite gener-
Gus, that the twenty-five of the Bank
ers' and Merchants alsoput up $500
each the entire total must be allowed
to be S37, 400,
Granting, now-and this is very
generous concession-that the three
Lloyds together have this last named
sum in actual cash or its equivalent,
and that they have it beyond all eX-
isting liability, whether for lossess or
tor unearned premiums, we are able
TO Judge somewhat as to the prudence
of the three in jointly writing lines of
$50, 900 each on single risks. This is
what, from their representations, we
understand that they do. In other
words, if we are correct in this under
standing, they stake very nearly the
whole of their actual capital using
the latter word in its ordinary sense
against the chance of the destruction
by fire of one building or one stock OF
goods. And, besides, they write on
cargoes and hulls, taking freely the
hazards of the rivers and canals and
the great lakes and the ocean.
No insurance company that we
know of would think of being thus
venturesome. The law which governs
insurance companies and from whose
restraints the Lloyds proclaim them
selves free, would not permit such
recklessness in an insurance company
Real capital, engaged in the busi-
ness of genuine insurance, has to be
cautious; caution is the price OF Its
preservation. Fabulous millions know
no fear.
The Book of Iloyds sets forth, and
we presume truly, the limitation
clauses in the policies OF the South
American and the New York and
Boston. It is likely that the same
clauses are in the Bankers and Mer-
chants policies. There are two OF
these clauses. The first it is not neces-
sary to quote further than to say that II
declares the liability Of each under
writer to be several and not joint. and
limits it to the sum subscribed by
each underwater upon the particular
policy. The second clause reaus
thus
"Second.-Ifby by reason of fires sew
eral risks insured under policies issued
pursuant to the said power of attor-
neys are involved in such fires, no
one of the underwriters hereon shall
upon such policies collectively become
liable for more than five times the
maximum amount which under the
said power of attorney the said Whip
pie & Co. shall be authorized to sub
scribe for each of said underwriters
Oh any one policy, and all policy
holders who shall sustain loss or
damage from such fires shall be en-
titled to recover as against each under
writer only that portion of the ad-
iusted claim on each policy which
the aggregate of such claims shall
bear to the total liability Of each
underwater, as thus limited
Now, the "maXimum amount
which the attorneys are authorized to
write for all of the underwriters on
any one policy is $4,000; and the
maximum which they are so author
lied to write for each of said under
writers is, in the case of the South
and North American, one-thirtieth,
and in the case of the New York and
Chicago, one thirty-eighth of that sum.
In the former case this would be
1888. 33, and in the latter S213. 6o.
Five times the former sum is 81 ,666.66,
and five times the latter sum is 81 1868,
40. These two sums respectively con-
stitute the limit of liability according
to the policy. And yet it is represent
ed in the advertisement and 1T is
given forth through the Book OF
Lloyds that the maximum" or "con-
flagration liability" of each under
writer is in the one case $1,000 and in
the other $4,000; and multiples of
these sums are claimed as "capital" or
as leash assets for protection of policy
holders"
Such gross discrepancies would be
impossible, in an insurance company.
But in Lloyds they are as natural as
a brass dog-collar in restaurant mince
pie.
And when it becomes necessary for
a policyholder to sue OH one of these
policies, what is there to sue? For
the purpose of being sued-which is
to say for the purpose of enforcing a
iability-there is no such thing as
Lloyds. The law does not recognize
it. There are, simply, thirty-eight or
thirty or twenty-five separate and dis
tinct individuals. They are scattered
from Central America to Montana:
Some of them can be got at, and
others of them are inaccessible.
Yes, but here are the attorneys, right
here in New York. And the policy
stipulates that service on these attor-
news shall bind the underwriters.
1t may he that such service would be
valid, but it will take a judicial decis-
ion in an actual case to settle that ques
ton. And we do not believe that a
mans estate out in Montana or Mime
sofa or in Nicaragua could he made to
respond to a judgment obtained
through service of process on New
York attorneys constituted as these
are.
But suppose that the policy stipula
ton as to service of process be valid
how about the collection of judg-
ment, the visible and tangible assets OF
the Lloyds failing? When recourse
must be had upon individual liability
this "capital' that figures in the ad-
vertisement-how will the judgment
creditor fare in that event? Well,
some oftheindividual underwriters will
be found to have available assets and
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