New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-05-03
WANTS SHARE OF SURPLUS.
POLICY-HOLDER SUES THE EQUITABLE
LIFE ASSURANCE SOCIETY.
APPELLATE DIVISION. IN REVERSING AC-
TIoN OF LOWER COURT. DISMISS
ING THE CASE, HOLDS HE HAS
CAUSE OF ACTIoN-OFFI-

TON OF A LOWER COURT. DISMISS
ING THE CASE. HOLDS HE HAS
CAUSE OF ACTION-OFFI-
GALS NOT WORRIED.
The immense surplus OF the Equitable Life
Assurance Society has often awakened covetous
feelings. In 1896 It was S43,OO0,000. 1t is moro
now; but even at that figure Emil Greet thought
he would like slice OF It. He was policy
holder in the company. and figured out that II
the surplus were divided equally among them
all his share would be S7,OS7 49, He asked the
company for II. and ala not get It, So he sued
for IT.
Judge DAILY, at Special Term, threw his case
out of court last spring. The Appellate Division
of the Supreme Court in Brooklyn yesterday
reversed Judge Days decision.
To a reporter for The Tribune S. S. McCurdy,
of the Equitable, said jokngy, last evening
that he fully expected his companys surplus
would remain intact for some time to come
He added seriously, that the decision given yes
terday a technicality. and did not touch
the merits Of the case at all. Years might
elapse before the case reached final judgment.
WHAT PLAINTIFFS COUNSEL SAY.
Dickinson W. Richards, Of Richards & Heald
counsel for Greet. said: This decision Is OF
great interest policy holders in life-nsurance
companies. Mr. Greet the holder of
fifteen-year non-tontine endowment policy in the
Equitable. This policy matured in May. 1891
| and at the end Of the preceding year the COM
pany had declared net surplus Of upward OF
S43, 900 600 In addition to all profits which 1t
had declared as dividends. The plaintiff claims
that under his policy. considered in the light of
the charter of the society, he is entitled to his
! share of the whole surplus, and not simply to
| share of such portions Of the companys profits
as II may choose to declare in the shape Of dv-
dends.
THE Equitable on the other hand claims that
it's directors have power to determine how much
Of its profits are to be distributed in the shape
| of dividends among its policy holders and that
the policy holders are bound by it's decision. The
case was first argued last spring before Judge
| DAILY, at Special Term and he sustained the de-
fendants demurrer. His decision has been re-
versed by the Appellate Division, Judge Wood
ward delivering the prevailing opinion, which
was concurred in by Judges Cullen and Hatch.
In his decision Judge Woodward said, among
other things:
The charter of the defendant provides that the
| insurance business Of the company shall be con-
Quoted upon the mutual plan. and that the ON &
GERS of the company within sixty days from me me
| expiration of the first five years, and within the
| first sixty days OF every subsequent period OF tve
fairs of he company which shall exhibit its assets
| and liabilities both present and conungenI anu
also the net surplus after deducting a sufficient
amount to cover all outstanding risks and other OBJ
legations Each policy holder shall be credited with
an equitable share of the said surplus.
The policy under which the plaintiff claims WAS WAS
written for 5000 and 1t contains sba be ' en
titled to participate in the distribution OF the sur
Us Of ns s9ces % such principles and
methods may from time to time be adoptea9 oy
sni and mebods m are hereby "a tilted and accepted by
! and for every person VINO snali nave Vi ei'i'" any
When this policy became due, in 1897, the com
pany paid the face Of the policy ogsther ,rma w1ra
Of the society The plaintiff now b brings iss an "a scUs Ts
him under the provisions Of his contract that he
shall participate in the net surplus OF the od1, qe
fendan The defendant demuTs to tn tns sa,e Pfacs
sufficient 10 constitute cause of action ana ron
! the interlocutory Judgment entered III oehdlI VI
| the defendant appeal comes 10 this court
LACK OF FACTS NOT SHOWN.
All ~ the facts stated must for the purposes OF
| this appeal be deemed be admitted by the
demurrer. and careful examination OF the peau-
| ings fails to disclose to this court any lack Vi
! facts necessary 10 constitute cause Oh acuo''
II ,s urged on behalf of the defendant that the
| ,aintiN has forfeited his right to insist upon an
enu,tatIa distribution Of all the surplus, BY the the
nrovision in the policy that the distributor Si. %
Be made accordng to SUCH prmcPdgS b Padonted by This
society for such distribution which principles ana a
We Ue' ara unable 10 concur in the conclusion ~,
| T'be Contract was drawn by the deIenoaht; am -.
| "a therefore to be construed most favoraDN ~
~ Is 'n,aIntiT where this construction does no vo-
lence TO the letter OF the contract me nc comnanv
were to- be Conducted upon the mutual 2iahId 29YIdends
stockholders were limited TO semi, re he
Of 3ls per cent. and each poncy of the profts of
credited with equitable snare Oh fne en amount
sufficient TO meet all of the obligations Oh dhe 20 saw
! many The company cannot now Do nsaiL ne Lant this
thafy g has by mere jugglery OF words ieP ,na nl
promise in form. only 10 uelea. ued "d,,r,ng IFS con-
The contract IS that ms rs porticipate in the dis
trbution of the surplus OF tins socleiy, IN which
part Of the surplus put ety the baVng stipulated
a system OF distribution, from "Ier a,, ~ bas now
cluded 1t hardly in position } 10 s' for its own
credit twothrds of declared surplus M anG dyisne shS
II is fulfilling in good faith Us conTaet oy u'"Ne
| the remainder with the policy
THE sOCTETY's DISCRETION.
That the society has large discretion In deter
| mining the amount OF the surplus 'ia' - ~
iale, Increase it's reserved fund for the security
| - 1,s roIicv holders or that it may deduct much
80 man at present to contingent liabili-
| tics Is not disputed The company may take an
stene which are demanded by wise ana pruuelss
management to insure the @ pro'1p' np the business:
but when it has once determined What tne inptiT
is 1t must under its contraSI " not S og portion
90 the fund but OF all of Il. That Is the essence
Of mutual insurance contract tne % pOcy ~ bet I,
! actually costs reasonable allowance oeing maze
for the use OF the capital and talent employed IN
! Concedng the facts stated in the pleadings, the
| plaintiff is entitled to Judgment and we conclude
| from should be reversed and the demurrer over
ruled. with costs
A DISSENTING OPINION.
Judge Goodrich wrote dissenting opinion.
| I'm which he said in part:
| mfr hat the