The herald., 1898-01-23
OFFICE OF THE HERALD.


at is not how much we write or say but
he truth of it, that produces desirable re-
suits"
After his warning and demand upon
the fire insurance companies, particulars
of which were given in this column sew
eral days ago. Insurance Commissioner
Clunie has turned his attention to the life
insurance companies doing business in
this state, with the result that several of
the largest concerns are already threaten
ing withdrawal. While ii is not probable
that they will carry such mcnaces into ex-
ecution. they are, according to an article in
the San Francisco Chronicle in very bad
humor in consequence of d hearing had
few days ago before the insurance COM
missioner as to the provisions of Section
400 OF the Civil Code, relating to insurance
reserves. Commissioner Clune reads 1t to
forbid the forfeiture of life insurance poll
cies. and, IL he is right the law certainly
confers on him the power to revoke the GER
tihcate of all the offending corporations.
The section was enacted In 1885, and soon
after Commissioner Clunie came into office
he sent an inquiry to the officers of the
various companies asking II they had
complied with the law.
Subsequent examination of their books
convinced him that they had not done so,
and he made demand upon them for lists
Of their policyholders. There was an out
burst of indignation. The companies as
serted that to obey would be to expose
their private business to their rivals. and
ultimately the order was withdrawn. The
purpose for which it was made, however,
was not abandoned. The commissioner
insisted that Section 450 of the Civil Code
required that after life insurance policy
had run three years. the holder was en-
4 titled at his option to have the reserve ac-
cumulated either applied to the payment
of future premiums or converted into a
1 full paid-up policy. Such has not been the
custom of life insurance companies. The
New York corporations which are the
largest, for instance, allowed no option
Their policies declare in effect that if at
the end of six months the suspended policy
holder neglects to apply for paid-up pol
fey his original policy should be declared
forfeited.
AS the result of the hearing Commits
sioner Clunle intimated that by the act of
1880 the legislature intended that in no
event should the insurance reserve be for
feited, but either be extended or transfer
red to paid-up policy, at the choice of the
insured. He added. however that recog-
nizing the ambiguity of the language of
the code. and the fact that his predeccs-
sors in office had passed 1t by so long
rather than apply the severe penalty of the
law until the naptiDp of the JpoicIatt,ra
he would make conditions which the life
insurance companies must either obey or
cease the transaction of business in Cali
forna.Y
Commissioner Clunie told the insurance
men that they would, therefore. have to
obey the law as he interpreted it or else
insert In their policies a stipulation for
either automatic extended or paid-up
insurance. and that all of the companies
must make good to every policy holder in
the state whose reserve has been forfeited
u paid-up insurance policy. 1t is this last
condition which is arouslng the special ire
of the life insurance companies, as the
transfer from the forfeited columns to the
paid-up policy columns of the forfeited re-
serves would amount to very consider
able amount.
+
The following important decision of the
United States supreme court Is OF interest
to stockholders in national banks and to
corporation stockholders generally:
The case of Stewart VS.. Hayden involved
the question as TO the liability of share
holder in a failed national bank in case
where the shareholder disposed of his
holding prior 10 the failure, but with evil
1as1n Of t1,nf f,;1 IA,
the bank. 1t appeared that the Capital
National Bank of Lincoln Nebraska went
into the hands of the respondent as re-
ceiver on January 49, 1898. The appellant
had been director of the bank for eight
years up to 1892 and was the owner of $50
shares of its stock. In December, 1892
he entered into a bargain for the purchase
Of certain real estate. agreeing to transfer
his bank stock in payment for this poperty.
The transfer was made on January s. 1898
twenty days before the bank failure was
announced. In making his assessment
against the shareholders the receiver of
the bank sought to include the appellant
in the list of those liable to depositors on
the ground that he was cognizant of the
} condition of the bank when he disposed of
his stock. The supreme court of the
United States, affirming the decisions of
the courts below. sustained the receiver
saying that it was evident that the appel
laHl hHeW VI lHe COHulllON OF Inc Dank ana
of the speculations in which its president
was engaged, and that it was not intended
that a shareholder should escape RESPONSE
bility in such case where his only inten-
tion in disposing of his stock was that of
evading liability in case of failure. Such
transfer, the court said, was clearly a
case of fraud.
+ +
Complete returns from Southern Ger
many show the exports to America in 1897
to have been $S6,5OSS19, against $34. 4.21O 1927 in
1896.
D r.. y y
Advance weekly reports of earnings, not
to mention Independent reports of good
trade and large business done in December
naturally prepared the way for very IA
vorable report on gross railroad earnings
for the closing month of last year and for
the entire calendar year 1897. OF course
nothing like the phenomenal gain of last
November was shown either in volume or
in percentage for the month of December
but the increase over a year ago was a
very respectable one, and with two excep-
tions. those of November and September
1897, was the heaviest reported in any
month last year.
Mortgages, $1,000 and Over
L. M. Grider ct al. to ]. r. vogel-
. Lots 119 and 12O j. Marion Brooks
sub wears. nor capt ooooo m