Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1910-06-30
Attorney for Stockholders Pre-
sents Clients Case for $16,-
100000 of Surplus.
DECISION EXPECTED
WITHIN A FEW DAYS
Counsel Contends That Company
Has No Right to Give Cash
to Policy-holders.

Argument in the suit brought by
Leon F. Blanchard against the Pru-
Dental Insurance Company to compel
It to distribute more than $16000,o00 Of
its surplus fund among the stockhold-
ers instead of the policy-holders. as the
fore Vice. Chancellor Howell in Chan
Gerry chambers today and will continue
tomorrow. If more time is needed, go
the vice-chancellor informed the coun-
sci. they will probably get 1t some time
next week. At the same time it is ex-
pected that the vice-chancellor will
have his decision ready before next
month is over.
Whatever way that decision goes,
however, 1t is more than likely that 1t
will be appealed, and SO the many
stockholders interested, and the numer-
Gus policy-holders also interested, will
probably have to wait long time be-
fore they will know just what will be
done with the more than $16.OO0 900 at
stake.
:. Suit Started by Blanchard.
Leon F. Blanchard started the suit,
end those who afterwards joined him in
It were William w. Blanchard, Emiline
C. Blanchard, Effie B. Walter Cora NJ
Macon, Margaret B. Blanchard. Fannie
E. Lake. Elmer Clifton .Searles. John
Illingworth. Percy G.. Hart, Edith II.
Krementz, Elmer Clifton Searles. in
trust for Harold N. Searles; Eleanor
Haines. William H. Barnett, Eva Lew
erich Brooks and William B. Grinnell.
The number of shares held by the orig
3nal complainant is 725, while the total
of the others is 7,975.G4, making grand
total Of s.70O.64 shares.
John r. Hardin; who. together with
former Attorney General Robert H.
McCarter. appears for the complain
ants, opened the argument, which will
be chiefly opposed by Richard v. Lin
danbury and former United States
Senator John c. 6pooner, of Wisconsin.
WHO represented the Prudential people.
Former Senator Dryden Present.
Former United States Senator John
+. Dryden, president Of the company;
John X. Gore, its actuary. who was the
star witness of the proceedings for
the company, and other of its higher
officers were among those that were on
hand to hear the argument.
After saying that the complainants
held more than 20 per cent. of the cap
ital stock of the company, Mr.. Hardin
referred to it's enormous growth, say
ing that in 1908 It's insurance in force
was s., ,446,1 ,178,S66, which later was in
creased to a total of 81. 703, ,447, 1856. Then
he told of its Incorporation under a
special charter and said that the shares
are declared to be personal property
and the charter Of the company i'm
poses no restraint as to dividend
rights.
Is Stock Company.
"This company" he insisted, "is a
stock company and not mutual COM
pany. There is wide difference be-
tween the capital stock of an insur-
ance company and that of an ordinary
manufacturing or trading company.
The fund of an insurance company is
its premium receipts and until that
becomes insufficient no call may be
made on the stock. The capital stock
of an insurance company Is only a
guarantee fund to be resorted to when
necessary For the insurance company
business 1t is only an Idle fund offering
no hope OF gain for the company. 1t
is not like the fund Of an ordinary
company. It is a guarantee fund. as
1 have said, and this distinction is
well recognized in the books.
II Not a Trading Fund.
eThis same difference in respect to
the capital of an insurance company"
Mr.. Hardin went on, land a trolley
company was recognized by Actuary
Wolf when he was on the Witness
stand during the hearing of the testi-
mony taken in this case. The fund re-
ferred to is a guarantee fund to be
maintained at all times. and is not a
trading fund"
Mr. Hardin added:
"The primary fund rnQusstionably
belongs in gross to the Insurance. COM
pany. and there can be no question
raised as to the ownership Of the fund.
The surplus belongs to tho company as
completely as the fund in gross, unless
there Is q contract right to share 1t.
Insurance has been conducted for many
years by companies organized either on
the stock or mutual plan. The stock
plan puts the ownership OF the company
It it's stockholders. and under that plan
all the gain of business belongs to the
(Contfnued ON Second Pnge.)