The Topeka state journal., 1897-11-22
M'NALL WINS.
Judge Foster Refuses to Grant
the Injunction
Asked by the Travellers Ins. Co.
to Prevent Examination
Of It's Affairs by the Commits
siOner of Insurance.
SCORES BOTH PARTIES
The Court, While Denying the
Injunction Asked For,
Says Some Hard Things of Nc
Nall and His Examinations.
THE COMPANY ALSO
Saws Some Hard Things of Nc
Nall and His Examinations.
THE COMPANY ALSO
Comes In For Some Criticisms
of Its Acts.
New York Life Withdraws All
Its Suits.

United States District Judge Foster
today refused to give the Travellers In
surance company an injunction against
Insurance Commissioner McNan to pre-
vent him from making an examination
OF the books of the company. While
the result is a victory for Commissioner
NcNaI there is a tinge of defeat in 1t
for him for Judge Foster uses strong
language in speaking of the eXamina-
tions of insurance companies made at
the instance of Commissioner NIcNaL
Judge Foster says that there is no
doubt that the examinations have been
superficial and the charges exOrbitant
but he says that he would not be justi-
fed in granting an injunction on the
ground that the Travellers feared the
examination to be made of their COM
Pany would be superficial and the
charges exorbitant-
After the decision had been read
Judge Horton gave notice Of appeal for
the insurance company.
Following is the opinion in full:
THE statutes of Kansas makes it the
duty of the superintendent of insurance
whenever he snail have good reason to
suspect the correctness Of any annual
statement of any insurance company or
that the affairs of any company are i'll
an unsOund cOnditiOn,tO make or cause
an examination to be made into the al
fairs of such company. There must of
necessity be allowed to a ministerial
officer a liberal discretion when he is re
quired to do an official act, upon GER
tain contingency be made 60 appear, or
when the officer believes, or has good
reason to believe, the existence of GER
tain facts which give him authority to
do the official act; and if he is acting in
good faith, and not in a manner clearly
indicating oppression in office or abuse
of discretion, the courts will not inter-
fere.
Tt is charged by the complainant
that the defendant. Webb McNall in the
proposed examination of cOmplainant's
affairs is acting in bad faith, and for
personal reasons; that he has no reason
to suspect the correctness of its an
nual statement or that its affairs are in
an unSOund condition. and in support of
these averments it has offered in evil
dence affidaVits showing the character
of examinations recently made by the
defendant of other insurance compa-
MES.
1T seems evident from the testimony
that the examinations that have been
made We're OF superficial character,
and of little or no benefit to any one;
and it is further apparent that the
charges for services and expenses of
his agents making the examination
have been eNtOrtIOnate; and yet the
question remains whether this is a Suf-
flcient reason for the court to interfere
and restrain the defendant from max
ing an investigation of the complain
ants affairs It surely can't be offered
as an objection by the complainant that
the defendant proposed examination
would be superficial and of little value.
It has doubtless the right to complain
of any extOrtiOnate charge for services
made against it and clearly has the
right TO refuse payment of such de-
mand. 1t may be urged with much
reason that the insurance companies
are not in a position to resist the pay
ment of an unjust demand for services
OF this kind.
IN paragraph 1924 of the general
statutes. we find the following prOvis-
ion: Whenever it shall appear to the
superintendent OF insurance from the
report of the person appointed by him
or other satisfactory evidence that the
affairs OF any company, partnership or
association are in an unsOund cOndi-
tiOn, he shall revoke the authority
granted to such company to do bUsi-
ness in this state
1T is quite likely that the insurance
companies which have submitted to the
excessive charges for services of this
kind, have done 50 under the apprehen-
sion that a refusal might result in the
defendant S reVOklng their authority to
do business in the state. Certain it
is that this power might be abused by
an INSCRIPTIONS officer, and yet it is
not apparent that such apprehended
danger iustifies the complainant in
seeking the aid of a court of equity to
restrain the defendant from proceed
ingS to make an tigatiOn, provided
grounds exist which Justify an eXami-
nation. The conduct of the defendant
as shown by the evidence in this and
0lAeI cases before the court. mas Deen
so indefensible and repugnant to the
mind Of every right thinking man. that
IT is difficult to give him credit for an
honest purpose in his proposed exami-
nation, and yet we have to observe and
follow the rule of law whiclF may be
cited as a precedent for an honest. con-
Scientious incumbent of the Office. 1t
cannot be said that there is an entire
absence of evidence to justify the pro-
posed examination by the defendant. in
as much as certain real estate of the
complainant in this state, is listed at
q price largely in excess of it's value
and there is an absence of any state
ment of any defauIted interest on
loans; and allowing to the defendant
the presumption of good faith. in some
degree if possible, it may we'll be said
that there is some reason to suspect
the correctness of the complainant's
statement.
IN view of the facts in the case and
the discretion which ought to be vested
in ministerial officer performing such
duties and the rule of law applica BILE
IL