Case Name: The State ex rel. the Attorney-General v. The Mutual Protection Association of Ohio
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1875-12
Citations: 26 Ohio St. 19
Docket Number: 
Parties: The State ex rel. the Attorney-General v. The Mutual Protection Association of Ohio.
Judges: McIlvaine, C. J., Welch, Rex, and Gilmore, JJ., concurred.
Reporter: Ohio State Reports, New Service
Volume: 26
Pages: 19–24

Head Matter:
DECEMBER TERM, 1875.
The State ex rel. the Attorney-General v. The Mutual Protection Association of Ohio.
1. Associations of persons incorporated under the act of April 20, 1872 (69 Ohio 1. 82), “for the purpose of mutual protection and relief of its members, and for the payment of stipulated sums of money to the families or heirs of deceased members,” are not subject to the laws of this state relating to life insurance companies.
.2. Whatever may have been the effect of the original act in 'connection with the laws of the state regulating life insurance, the amendatory act of February 8,1875, excepts from the operation of such laws associations formed before as well as those formed since the amendment.
3. A corporation organized under the original act, against which an information in the nature of quo warranto was pending at the time of the passage of the amendatory act, is entitled, in such suit, to the benefit of the amendment.
Information in the nature of quo warranto.
The information, filed September 25,1874, charges that the defendant, on the 27th of February, 1874, became a corporation of this state, under and by virtue of 'the act entitled “ an act supplementary to an act entitled 11 an act to provide for the creation and regulation of incorporated companies in the State of Ohio, passed May 1, 1852;’” and that, as such corporation, it has misused its corporate authority, franchises, and privileges, and unlawfully assumed and usurped certain franchises and privileges not granted to it by law, to wit:
That it has been making and pretending to make insurance upon the lives of individuals in said state upon the mutual plan.
That it has been holding itself out to the public as, and pretending and assuming to be, a general mutual life insurance company of this state, authorized to do and transact a general business of life insurance therein.
That it has established a central insurance office at Nor-walk, Ohio ; appointed and employed a president and secretary to conduct the business thereof; a medical board to pass finally upon applications for insurance; medical examiners to examine applicants; general and special agents to extend and promote its general business of life insurance, solicit risks, etc.; and such other officers and agents as are needed in the conduct of such a business.
That it has issued policies of insurance whereby it has agreed to pay the representatives of the insured, at the death of the latter, stipulated sums of money; for which policies it has charged and received large sums of money, to wit, |-for each one, and obligated the policy-holders to pay to it large sums of money, to wit, $- each, annually thereafter during their lives respectively.
That it has established local agencies at divers places in the state by means of which to effect life insurance as afore said, and through them has sought and obtained applications for, and issued policies of, life insurance, and received and contracted to receive money therefor as aforesaid; all without warrant of law. And said defendant has done, and is still doing and assuming to do, all and singular the things aforesaid without complying with any of the provisions of the laws of this state relating to life or other insurance.
The plea of the defendant admits that it is a corporation .duly formed under the act of April 20, 1872, as set out in ■the information, and avers that it is exercising and assuming to exercise the faculties, liberties, and franchises conferred by said act and none other.
It admits that it has established an office at Norwalk, Ohio; employed a president and secretary to conduct the business thereof; a medical board to pass finally upon the .applications of persons desiring to become members of said association;' medical examiners to examine applicants for membership in said association, and general and special .agents to lay before the public and individuals the advantages of membership in said association, and to receive applications therefor, and such other officers and agents as are needed therefor; and avers that it has full authority for so doing under the statute under which it is incorporated.
It disclaims being, or assuming to be, a life insurance company, or to carry on the business of life insurance, as charged in the information.
On the contrary, it avers that it is engaged exclusively in the business and carrying out the purpose contemplated and authorized by the statute under which it is formed. That it issues certificates of xpembership to the several persons becoming members of the association, stating therein the kind of benefit and protection the member is entitled to receive by virtue of his membership, and the obligation and promise of all other members to contifibute x-atably thereto. That this defendant simply acts as- the agent of the members of the association to receive their contribu tions and appropriate and apply them to the objects of the association. That said contributions are not receivable or collectible until the conditions arise entitling a member or his legal representatives to have and receive the same; and that this defendant is paid therefor a small sum to defray the expense of collecting and disbursing the said contributions for protection, relief, and otherwise.
To this plea there was no replication. There is an agreed statement of facts filed in the case, which it is not deemed necessary to notice, as the only question decided by the court is whether the defendant in the management of its business is governed by the statutes regulating life insurance companies and the business of life insurance.
John Little, attorney-general, for relator.
W. JBL. TVest, for defendant.

Opinion:
"White, J.
It is conceded that the defendant was duly incorporated under the act of April 20, 1872. 69 Ohio L. 82. Such associations are declared by the act to be authorized " for the purpose of mutual protection and relief of their members, and for the payment of stipulated sums of money to the families or heirs of deceased members of such associations."
By section 3 of the act it is declared that the corporators, their associates, successors, and assigns, shall " be deemed a body corporate with succession, and shall have power to receive money, either by voluntary donation or contribution, or to collect the same by assessment on its members; and to distribute, invest, and appropriate the same in such manner as such association may deem proper, with power to sue and be sued, plead and be impleaded, defend and be defended, contract and be contracted with, acquire and convey at pleasure all such real and personal estate as may be necessary and convenient to cany into effect the objects of such association ; . . . and to do all needful acts to carry into effect the objects for which it was created, in such manner and for such purpose as may be prescribed by the rules and regula tions of the association, not inconsistent with the laws of the state and the purposes of the association."
On the 3d of February, 1875, an amendatory and supplementary act was passed. 72 Ohio L. 23,2.4. By that act it was " provided, that the aggregate sums stipulated to be paid to the family or heirs of any member at his decease, shall in no case exceed seven thousand dollars; nor shall any assessment, on account of the death of any member, be made against any surviving member, exceeding one-fifth of one per centum, stipulated to be paid to such survivor at his decease."
The original section 3 was repealed and substantially reenacted with the above proviso.
The amendatory act also declares, "that all rights accrued, and all associations formed under the original act, shall survive and be subject to, and governed only by the provisions of said original act as hereby amended, and in no manner subject to the laws of this state relating to life insurance companies."
The only question we regard as before us in this case, is, whether the defendant in carrying on its business is subject to the statutes of this state relating to life insurance and life insurance companies.
The attorney-general contends that the defendant is engaged in the business of- life insurance, by undertaking to insure the lives of its members; and that, consequently, it is subject to the act of April 27, 1872, regulating " insurance companies doing an insurance business in this state " (69 Ohio L. 150), and the act of March 12,1872, establishing an insurance department in this state (Id. 32); and that having failed to comply with these acts, it is guilty of the usurpations charged against it in the information.
On the other hand* it is contended for the defendant that these acts do not apply to corporations organized, as the^ defendant was, under the act of April 20,1872.
How this might have been before the passage of the amendatory act of February 3, 1875, it is unnecessary to decide. For whatever may have been the effect of the original act, in connection with the laws of this state relating to life insurance, the amendatory act expressly excepts from the operation of such laws, associations formed before as well as those formed since the amendment.
As between the state and corporations already organized under the original act of April 20, 1872, it was competent for the legislature to relieve them from the effect of the acts relating to life insurance companies. If, therefore, such corporations were subject to these acts, they were, by the amendatory act of February 3, 1875, excepted from their operation; and we see no reason why the defendant is not entitled, in this suit, to the benefit of that act to the same extent as other like corporations against which proceedings have not been instituted.
Judgment for the defendant.
McIlvaine, C. J., Welch, Rex, and Gilmore, JJ., concurred.