Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1910-10-19
WINS IN
TAX SUIT AGAINST
PRUDENTIAL LIFE
CONTINUED from First Page,

NA'N loN bCCH SOihS Ohs dha -
that the act of 1907 was the result %
widespread agitation for the regula'
ton of life insurance companies. HI
also refers to the 1907 law as being
approved for the betterment of th'
companies and in line with public
policy. The text of Justice Minturn's
opinion follows:
Text of the DecigiOn.
"First-The act approved April 10
1907, entitled AN act to require an an
nual apportionment and accounting OF
surplus of life insurance companies,
did not create a new and distinct debt
or liability as between life insurance
companies and the State, so as to en-
title such companies to an exemption
from taxation upon surplus funds rep
%resenting the earnings and profits dis
tributable to deferred dividend policy
holders as a class.
"Second-The act approved April Is,
1907, was not intended 10 effect and
could not constitutionally effect any
change in the relative rights of in
surers and insured under existing poll
cies of insurance.; but vas intended to
effect an az portionment and segrega-
ton of the funds in which deferred
dividend policy-holders as a class were
entitled to participate under the terms
Of their policies.
"Third-The passage Of said act
neither effected nor was it intended to
effect any change IN the tax act of
1906.
"Fourth-The valuation of deferred
dividend policies In accordance with
the provisions of the tax act of 1906
by the commissioner of banking n
insurance for the purpose of exemption
from taxation must be held to incluse
as a factor in the estimate of valua-
ton the debt or liability arising from
the existence of the fund in the pos
session of the companies payable I'M
der the terms of their contracts Of IN
surance to deferred dividend policy
holders, as a class, and dealt with by
the Legislature In the act of 1907 only
for purposes of regulation and admin
istration.
Prior to the passage of the act
entitled An act to require al annual
a~pportionment and accounting of sur
plus of life insurance companies APP
proved April 15, 1907, domestic life in
surance companies Issuing what Is
termed In insurance nomenclature &C.
ferred dividend policies were under no
legal or contractural obligations to as
certain and apportion the share of
earnings of the ID which such
class of policy-holders would be entitled
to receive at any particular period dur-
ing the c~ontractura period specified In
the policy. except in cases where
srecifc allegations of fraud were pre-
sented in a bill in equity seeking an
accounting"
Justice Minturn cited two cases
against the New York Life insurance
Company and one against the Foul
table, pointing out that the precise
character In which these companies
held their surplus Accommodations was
left in some douLr by The judicial de-
cisions. Thus, for example. II was held
that no trust relationship existed be-
tween the contracting parties in New
York and New Hampshire. The same
result was reached In Massachusetts
while in Wisconsin the opposite view,
prevailed.
"Such latter view, continues .Justjce
Minturn Seems also to have been the
view of the learned and distinguished
founder of the corporation
cLife Insurance and Other Subiects
by Hon. John r. Dryden).
"In 1907 as a resuIt of a n,,blic
policy which was evolved ouite gem
erallv throrghout the States as tho
sequence of q wtdasnread asitation for
the regulation of the business ne life
insurance n was sought 10 Nx and de-
terrnine tbe nahili+v of tho con,nanias
TO tbe ar stated ner,ods
under this fo,n, of in-suranca and 10
eompel annortionment Of dividends TO