New-York tribune., 1899-06-08
THE GREEFF CASE ARGUED.
ARGUMENTS REGARDING DIVISION OF
EQUITABLE SURPLUS.
WILLIAM p. HoRNBLOwER's PLEA FOR THE
coMPANY-BorH SIDES SUBMIT BRIEFS
TO APPELLATE COURT.
IBY TELEGRAPH TO THE TnBuxE.l

IBY TELEGRAPH TO THE TRiBuNEl
Saratoga " Y June This morning. before
.hA Court Of Appeals. Chief Justice Parker pre-
s,d,ns appeared William B. Hornblower and
CHARLES b Alexander. OF New-York counsel for
.,a Foutaole Life Assurance Society appellants.
.,a Dickinson w. Richards. also of NewYork
c,,v counsel for Emil Greer respondent.
The Equitable company seeks reversal OF a de-
.,s,on Of the Appellate Division OF the Supreme
court given May 2. reversing the decision OF
Iusuce Joseph F. DAILY. sustaining demurrer en-
tered by the Equitable Life TO the complaint OF
Emil Green
Emil Green the complainant in the action TO
which the Equitable Life demurs. insured his life
IN that society on May 2. 1882 selecting form OF
noljcv STYLED the endc wment policy. non-tontins.
maturing in fifteen years. In 1897 the policy ma
tured and the society paid in the month OF June
"a Mr. Greef the sum of s23.sS2 Mr.. Greer stipu-
lated with the society at that time that his ac
ceptance of this amount should no. prejudice any
claim for a further proportion Of the surplus. II
ne should bring suit.
In September. 1897. Emil Greeh brought suit
oeanst the society setting forth in his complaint
that the society, by the terms Of the contract or
roucv agreed 10 distribute It's surplus among the
nolicy holders and that the society showed by It's
REPORTS each and every year when his apporuon-
r,ent OF the surplus made retained IN It's pos
session large sum- and that, had the amount 30
retained been distributed he would have received
about 81 900 To this suit the Equitable demurred.
stating that the complaint did not contain cause
OF action. Upon this question OF law the Equltaoe
Life comes 10 the Court OF Appeals
MR. HoRNBLOWER's ARGUMENT.
Mr. Hornblover said ''In one sense OF the word the
assets Of a Hfe-nsurance company. over and above
its liza bilities are surplus The value OF corpora
tions assets and above its strictly legal iabi-
ties technically surplus. II does not follow how
ever that this amount is d!stributa0le by way OF
dividends Under and by its charter, under and by
the methods and principles Of transactng the ons-
ness Of insuring lives II is incumbent upon the
directors OF all nfe-insurance companies to reserve
q portion of this so-called surplus of the amount
left over after the computation Of the strictly legal
liabilities as a fund TO provide against certain
contingencies which might arise and 90 arise in the
course Of years This fund is established for the
safety and protection Of all policy holders Any
directors who would dissipate nil the surplus in
dividends and leave stripped OF this element Of
safety and protection the army OF eo go policy hold
ers should be indicted for malfeasanoe In Office.
The so-caHed surplus Is in fact. contingent
reserve composed Of two elements. One part OF IT
Is a small amount reserved for the purpose Of
safety TO provide for losses by Investments shrink
age in values, shrnkase in the interest-earning
value Of assets increased mortality by famine.
pestlence and war: and the other and greater part
the accumulated profits dividends on tontine poll
cies which were annually distributed such poll
e.es matured"
COMPUTATION OF SURPLUS.
Furthermore Mr. Hornblower argued that the
EQUITABLE Life had outstanding 81 900 Of
insurance and over s2S000.0o OF assets, but that
these policies which were in one sense liability.
were TO be computed upon an actuarial basis as
authorized by the Insurance Department. He said
that these tables assumed that the companies were
able 20 invest their premiums and assets at per
cent compound interest The sum Of money, which,
so computed represented the liability OF the COM
pany was set down the liability for outstanding
insurance BY this deduction Of the liability. per-
haps 5000 co. from the assets. the surplus or ex-
cess Of assets was determined: but II the society
could not earn per cent then there would have TO
be readtustment and diminution Of the 30
NJ Hornbiower then pointed out TO the Court
that the Legislature. foreseeng just such suits had
panies which shall in any sense interfere with the
system OF corporate management must be insii-
tuted in the name Of the people and by the pubic
prosecutor the Attorney-General Of the State
- FORMER DECISION CRITICISED.
with considerable spirit Mr.. Hornolower comment
ed upon the 'handiwork or brainwork" OF the
learned Justice Of the Appellate Division who had
written the opinion for having CLASSIFIED under one
head the methods and principles OF transacting the
business of insuring lives with that Of a grocer
running a corner grocery by what right" asked
Mr Hornblower. dare the learned Justice Say Of
the Attorney General that the right OF this respond
ent to bring such an action as provided by the
statute must depend upon the will or caprice Of
the Attorney -GeneralT
- Dickinson w Richards. for the respondent. Emil
eree based his contention mainly upon two points:
tTst. that the society in annually declaring It's
surplus surplus profits, made itself liable 10 his
client under the terms OF the policy contract to
divide among the policy:holders all Of the surplus
so declared. and second that the law barring q
po,icy-hol TO bring suit except through the At
torney- General was unconstitutional
Mr. Dickinson asked by Justice Dennis
o'Bren how. he would dispose Of the 8 900 Of
surplus which existed the time Mr. Green was
insured. Mr.. Dickinson replied that the policy:
holders. whose policies had matured, had accepted
settlements and consequently It reverted 10 the
policy holders who succeeded them.
Mr.. Dickinson oOntended that an accounting might
rot be necessary He accepted the figures the
Equi;able's books correct. and before the issue
OF Facts 20 trial. he would ask for an exam
ination Of the books by accountants who would
doubtless verify the published figures OF the EQut-
able society. His contention to the eject that
his client entitled 10 trial by jury OF the
question whether his client entitled to further
and additional dividends not, and that his client
barred by act which was unconsttu-
tional.
Both sides submitted briefs