The Minneapolis journal., 1902-07-03
DON'T I: HAVE / TO PAY
Subscribers to Minneapolis F. and
M. Guaranty Fund Win.
BY THE SUPREME COURT
1t Upholds Decision of the Lower
Court-Eight Cases Dis
posed OF.

Minnesota's supreme court to-day su-
tanned, the lower court in the actlon
brought by the receivers Of the Mime
apolis Fire and Marine Insurance COM
pany to collect from the subscribers, TO
guaranty fund. AS result the ofh-
GERS are released from payment. The
syllabus says: r.- ..#
William s.. Dwinnell and John c. Sweet, as
d. Receivers of the Minneapolis Fire and Ma
rne Mutual Insurance Company, appellants,
vs. The Minneapolis Fire and Marine Mu-
tual Insurance Company ct al, defendants;
Frank Haywood, respondent.
FEst-The Mutual Fire Insurance company
Of Minneapolis was duly incorporated under
and pursuant to chapter IT'S, laws 1895, for
the purpose OF doing a general fire insurance
business the mutual plan. Thereafter an
attempt was made to change the character OF
the corporation by amendments to its ar
ticles to authorize and empower 1t to do
marine insurance business; but the statutes
on the subject were not complied with and
the company was never legally authorized to
Issue marine policies. In connection with the
attempted change in the character Of the cor
poration, the officers undertook to create and
provide a capital stock or guaranty fund;
and defendants in this action, for that pur-
pose, signed and delivered to the corpora
ton subscription contract whereby they
promised to pay to the company the sum set
opposite their names at such times and in
such amounts as might from time to time be
required by the company. Thereafter, for
the purpose of giving standing and credit to
the corporation, and inducing persons to take
Its policies, the officers thereof represented,
by public advertisements extensively circu-
lated, that 1t possessed capital or guaranty
fund. But it does not appear that any of the
present creditors of the concern were induced
thereby to insure their property with the
company; nor does it appear that the COM
pany actually engaged in a marine insurance
business or issued other than mutual poll
cies, payable, in case of loss, by assessments
upon policy holders in proportion to the
amount of insurance carried by each. The
company became insolvent, and this action
was brought by the. receivers to recover
against the subscribers to the guaranty fund
for the full amount subscribed. 1t is held:
First-That a mutual fire insurance COM
pany Is not authorized, as an incident to the
exercise Of the general powers and func-
ttons of such corporation, to create or pro-
vide a capital or guaranty fund; nor is such
power. conferred upon a mutual company
by chapter 176, laws 1885.
Second-A mutual fire and marine insur-
anee company may, under the provisions of
that statute, provide such fund in the man
her therein directed; but it is held in this
case that the complaint does not show that
the company in question was ever organized
40 a AAe1A iAAC SOAipduys VI IAdI IL pOoSSsSSu
or ever exercised, the power to issue marine
policies.
Third-A subscription to such a fund az
provided by the statute is in the nature OF
a loan or an agreement on the part of the
subcriber to advance to the company, from
time to time, money sufficient to enable it tc
pay current losses and expenses the same tc
be refunded to them subsequently with in
terest.
Fourth-That the facts pleaded in the com
plant do not estop defendants from disput-
ing their liabilities as subscribers to such
fund. >':@ {
Order affirmed. Brown, J.