certainconditions,one of which is to file with the Board,ofInsuranceCommissioner8 a copy of its "charteror articleaof incorporation" (Art: 48608-u).
Article 4860a-8 is here quoted in full:
"Any public or privatecorporation,board or aeeociationin this state or elsewheremay make application,enter into agreementsfor and hold poli- cies in any such mutual insurancecompany. Any officer,stockholder, trust- ee, or legal representative of any such corporation,board, associationor estatemay be recognizedas acting for or on its behalf for the purposeof such membership,but shall not be personallyliableupon such contractof insuranceby reason of acting in such representative capacity. The right of any corporationorganized.under the laws of this state to participateas a member of any such mutual insurancecompanyIS hereby declaredto be inci- . dentalto the purposefor which such corporationis organizedand as much grantedas the right8and powera expresslyconferred." Hon. E. G. Moseley,page 5, (O-924)
The next article, 48608-9,reads as followe:
"Everymember of the companyshall be entitledto one vote, or to a nuder of votes based upon the insurancein force,the number of policies he.Ld,or the amount of premiumpaid, as may be providedin the by-lava."
The Legislaturehas provideda means wherebyany S$ock hsurance Company may become a Mutual Company"Ownedand controlled"by its policyholders.See Art. 4871a,Vernon'sAnnotatedStatutes;Acts 1931, Forty-eecondLegislature, Ch. 118, p. 200.
In Cooley'sBriefs on the Law of Insurance,(1905)Vol. I, pp. 51-52,It is said:
"MutualCompaniesordinarilypossessno capitalstock,but are made up of al.1the policyholderswho take the place of the stockholdersin an ordin- ary corporation,and act throughagenciesselectedby themselves.* * *
"While,in a stock company,a stockholderis not necessarilyinsured, and one insuredby the companysustainsno relationtheretoexceptthat of contract,it is a distinguishingfeatureof a mutual companythat one insuringthereinbecomesa member of the association. * + *
"The membersand stockholdersof a mutual insurancecompanyare there- fore identicallythe same. That is to say, a stockholderof a mutual insur- ance companyis simplyone~*ho,hasii.paidinto the,capitalof.the companyby way of premium,and who;is:.responsiblefor its losses to that extent,and who is entitled,when such premiumsshall have accumulatedto a largersum than is requiredto pay the losses,to pro rata divisionthereofas profits; * ,** and it would seem that the fundamentalprincipleof a mutual insurance comparqis that the companyin no case can insurepropertynot owned by one of its own members." (Citingauthorities).
In the supplementto the same work (lqlq),Vol. 6, p. 9, the same pro- nouncement is made in brief language:
"Mutualcompanieshave no capitalstock,the policyholders takingthe place of the stockholdersin an ordinarycorporation,and the cash paid in and premiumnotes constitutethe companies'assets."
From Ruling Case Law, (14 R. C. L. 847, $12) we quote the following:
"As regardsrightsand remedies,the policyholdersin a mutual insur- ance companyare stock holdersthereinthe same as owners of stock in a stock corporation, there being no charterprovisionto the contrary. Their interestsare two-fold: They are both ineurersand insured. In respectto the former,they are bound to share in the losses and entitledto share in the profitsof the businewa,on the basis of a partnership,except so far as the charteror policy contractprovidesotherwise. Each member to the Bon. E. G. Moseley,page 6, (O-924)
extentof hie premiumnote insure8every other member who was such when he became a member,or became and continuedto be euch dtiring hia membership and he, in turn, is insuredby every other member to the