Year: 1867

opinion 70 ,ts correctness They have also examined
the recent statement Of the company and ind some Of t
so greatly In conflict with the hrst report s 70 the
strcest scrutiny into the affairs OF the company, not
only for the last year but for the precedng and until
such invest CATION made and the result thereof ascer
tanned, your committee would recommend great caution
the part OF the scrpholders In dealing with the
pany. In view Of these facts, your committee would
recommend the passage Of the following resoutions:-
the Affairs Of the company for tho last two years, and
also to employ person or persons 70 assist them
IN such examination ana That report thereon DO made


The resolution authorized the committee to
quest Insurance superintendent Barnes TO Investigate
the anairs OF the company .s


The following Is the opinion Of counsel referred to in
the report


Your letter asking my opinion as 70 rights and abIii-
ties Of scrphoders in the Sun Mutual Insurance Com
pany has been received This company inaugurated
by an act Of the Legislature OF this passed MAY o.
l BY the third section Of the act the corporation SO
created was declared TO possess the powers and prv
leges and be subject TO all the restrictions and lima
tons which are granted or imposed upon the United
Insurance Company SC BY reference TO the charter
or tho United Insurance Company passed May H. ls4O
VIII be seen that the company so formed was consti
tuted with powers adequate TO the transaction OF q
mutual insurance business The practical working OF such
business may be described as foows:-One hundred
merchants give notes for 900 each TO the company
during one year. making 800 000 Assume that these
premiums well earned by the company and the notes
se p my
terms Of the charter or this company, the trustees are
empowered 10 retain this $50 000 and issue certificates



tho scrip issued being subject TO the future losses of
the company The retained must be invested by
.ns COMPANY pursuant 70 the terms Of the charter II Il
aton h pursued The losses OF the year are In the first
10 be paid Of the earnings Of the year. ard
the pital reserved accumulat0n OF the coInpauy
be resorted 20 unless tine earnings 6f the
have been insufficient TO meet the losses OF the year
scriphoiders, and their right therein canno. be
divested without their censent except by opera
ton Of law Lei us suppose, however, that
nat knnp
the losses and expenditures In ouch contingency the
company by the seccnd section Of the amendaory
act OF 1874 passed March ~ sauhorzed to declare
pro deduction Of the amount of the outstanding
certificates think this act Is directory, and requires
the company provided they resort TO the expedent OF
declaring deduction scrip 10 make such deduction
pro rata upon all the outstanding scrip and havc no
doubt but that the company may under this clause call
In and cancel all their scrip should the losses far ex
ceed the earnings TO justify such Whether
the losses of company have exceeded their earnings In
equal To the amount Of the outstanding scrip,
is a question Of fact to be determined by an
examination into the condition Of the company.
If upon such an examination u s found that
there Temains any portion Of the accumulated
fund ] have no hesitation In saying that such
portion belongs, FRO rata, to the scrphoders, and
their right thereto cannot be taken by any resou
on the board declaring the scrip be cancelled II
will be necessary to examine the condition OF the Sun
Mutual Insurance Company in order TO determine this
fact and would suggest that person familiar with
marine insurance losses be employed by the committee
and that the examination TO be made should be thorough
and searching in every particular 1t is not necessary
for me- under the circumstances consider the ques
ton Of the perpeu,y Of the charter Of the Sun Com
pany at the present time for the that IT. upon in
vestgation the scrpholders are satisfied with the
duct OF the trustees they will have concern with the
future Of the company III upon the investigation 1t
should appear that there OF the company, to
compel them rescind the resolution cancelD2 the
scrip and renstatDg the scrpholdcr In such rights
he has been wropgfuy deprived or


The following document was then handed round for
the purpose Of obtaining the signatures Of the remaining
stockholders


NYw YoRx Jan. 10 1877.


The undersigned hoidcrs of Enu Mutual scrip, for the
of employing counsel and paying other Incidental
necessary ascertain the rights Of all scrip
holders agree to pay in the proportion 70 the OF
scrip held represented by them, the not
half OF per cent the same. TO be paid the
uittee. s tfFT