New Britain herald., 1928-02-04
MUTUAL INSURANCE
 FOR SCHOOLS O. K.
(Continued From First Page)

sprinlklers in the schools and insur. ing under q mutual insurance plan In a statement which was issued for publication by special commit tee of underwriters several pointed statements were made at Committee man Day for his part in trying tc bring about mutual insurance. In one part of the letter the statement was made that Mir. Day was making a frantic effort to justify himself after the fire at the Israel Putnam school on Osgood avenue. The com- mittee consisted of w. c. Dunn, H. w. Hatch, F. H. Shield, G. A. Quig- ley and R. G. Wilbur.
 Corporation Counsel kirkham's opinoin follows:
 Mir. Louis w. Young
 Chairman of Special Committee School District
 New Britain, Conn.
 Dear Sir:
 Under the laws of the State of Connecticut, can see but one reason why it might be held that the school district has not the power to insure the school buildings in . mutual company. That is, that . municipal corporation has not the power. unless given it by tho legis- lature to 90 into the insurance business.
 "I have made as extensive an ex- animation of tho decisions of the courts in the various states of the union on the whole general subject as the time has permitted. The charters of the various mutuals diff fer. For example, in the case oi French VI. City of Millville. supreme court of New Jersey, points out that the city did not become an owner of the capital assets of the insur- ance company. but was entitled only to share in the profits of the business for the current year, in much the same way that an employe might contract for . bonus, payable out of the profits of the company for which he worked, without becoming there- by a member of the corporation.
 Probably the charter of the com- pany in which you propose to insure makes the policy holders members of the corporation. with power and authority to vote for officers and to receive their share of the prof,ts of the business during the time which they are members and making them liable for their proportionate share of the losseA but limiting the liabil. ity for losses to i've times tho amount of the premium.
 The school district is authorised and directed to provide and main. tain school buildings and this by im- plication authorizes 1t to insure the buildings against loss by fire. Mu- tual fire insurance companies have been chartered by our legislature and probably the history of insur- Ince in Connecticut would show that fire insurance companies were the first in the field. Our statutes recognize foreign mutuals and pro. vide means whereby they may do business in this state. We have . statute prescribing that mutual companies state in their policy the amount of assessment in which the members may become liable.
 Tt seems to mo that while the school district might be considered as 8 matter of form of going into tho insurance business, it is . mat ter of form only. but that tho trans action in spirit and in its essentials is simply that the school district is going into the business of getting its insurance on as favorable terms a possible.
 What the Connecticut courts would hold on a test case, do not know. think the chances are that they would hold that the contract that you propose making is not be- yond your powers. In the case of . loss, and you should be compelled to sue the insurance company to re- cover your damages. my opinion Is that the Connecticut courts would not hold that your contract was ul- tra wires, that is. beyond your power. and that you would be permitted to sue for your loss. Likewise in case of suit and the insurance company should claim that the contract was void. being beyond your powers. I think that . court would hold first that it was not beyond your pow CTS; and secondly, that the insur. ance company should not be permit ted to make their claim in view of the fact that they had accepted your premiums. In other words, that the company would be stopped from making any such claim.
 However, on this point there arc good authorities to the contrary. The supreme court of New Jersey has held that the city of Millville had the right to insure its said buildings in a mutual fire insurance company located in the city of Mill vile.
 "The supreme court. state of Texas has held that a city did not have the right to insure under the work mems compensation act on the mutual plan.
 'The supreme court of Idaho has held to the same effect in . fire in- surance matter.
 The attorney general of the stats