Court Opinion

ID: 7100080
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:14:55.628213+00
Date Added: 2024-06-11T16:13:22.832126
License: Public Domain

Day, J.
I. The defendant claims to be incorporated under the provisions of title 9, chapter 2 of the Code of 1873, sections 1091 to 1102 resjtecting corporations other than for pecuniary profit. Corporations for pecuniary profit, must cause their articles of incorporation to be recorded in the office of the recorder of deeds of the county where the principal place of business is to be, and within three months thereafter must cause their articles to be recorded in the office of the Secretary of State, and must publish for four weeks in some newspaper convenient to the principal place of business, a notice stating the name of the corporation, the nature of the business to be transacted, the amount of capital stock authorized, etc. Code, § § 1060, 1062 and 1064.
Corporations other than for pecuniary profit are required to record their articles of incorporation only in the office of the recorder of deeds of the county where the principal place of business is kept, and a newspaper publication is not requisite. Code, § 1092.
The petition alleged that a certificate signed by the incorporators was filed with the recorder of Wapello county, Iowa, and recorded, but that the same has at no time been elsewhere filed with any officer of the State. Still, we do not understand that this action is brought to test the corporate capacity of the defendant. Chapter 6, title 20 of the Code, provides the manner in which actions shall be brought to *131test corporate rights. See, also, section 1074. This action is brought upon relation of the auditor, not to test the corporate capacity of the defendant, but to close its business for an alleged failure to comply with the provisions of chapter 5, title 9 of the Code. For the purposes of this case it must be assumed that the defendant is legally organized as a corporation. We do not deem it necessary or proper to enter upon any consideration of the legality of the defendant’s organization.
II. It is claimed by the plaintiff that defendant is a life insurance company within the meaning of chapter 5, title 9 of the Code, and that it must comply with the provisions of section 1163 of that chapter. Whether the defendant comes under the provisions of that section, is the pivotal question in this case.
Section 1161 of chapter 5, provides: “Every company formed for the purpose of insuring the lives of individuals, whether organized under the laws of the State, or of any other State or foreign country, shall, before issuing any policies on lives within this State, comply with the conditions and restrictions of this chapter.”
Section 1162. provides that all the stock companies organized under the laws of this State shall have not less than one hundred thousand dollars of capital stock subscribed, twenty-five per cent of which shall be paid up and invested * * and deposited with the auditor' of State when he shall issue to the company a certificate, etc.
Section 1163 provides that companies organized in' this State, upon the mutual plan, shall, before issuing policies, have actual applications on at least two hundred and fifty individual lives for an average amount of one thousand dollars each, a list of which shall be filed with the auditor of State, and a deposit made with said auditor of an amount equal to three-fifths of the whole annual premiums on said applications, etc., when the .auditor shall issue a certificate.
Section 1160, which is found in chapter 4 of this title of *132the Code, is as follows: “Nothing in this chapter shall be so construed as to prevent any number of persons from making mutual pledges and giving valid obligations to each other for their own insurance from loss by fire or death, but such association of persons shall in no case insure any property not owned by one of their own number, and no life except that of their own members, nor shall the provisions of this chapter be applicable to such associations or companies. * .*. And such companies organized under this section shall pay the same fees for annual reports as are now paid by stock companies, but such association or companies shall receive no premiums nor make any dividends; but the word jn'emiums herein shall not be construed to mean policy and survey fees nor the necessary expenses of such companies.”
It would seem from an examination of the articles of incorporation and by-laws of the defendant, that it falls under the provisions of this section. The object of the defendant as declared in its articles of incorporation and by-laws is to afford financial aid and benefit to the families and benficiaries of deceased members, and assistance to the members personally in case of sickness or disability. The payment of membership fees, annual dues and assessments is required, but these are to be used in paying the actual expenses of the association, and the benefits on account of death or sickness. Even the permanent fund contemplated in article fifteen of the bylaws, from unused admission.fees, dues and assessments, must be used to pay the necessary expenses and benefits without assessment. The by-laws evidently contemplate that when there is enough permanent fund accumulated to pay a benefit, then no assessment shall be made. There is no possible way, without a violation of the articles of incorporation, that any fund can accumulate for peculation or division.
It is claimed, however, by the appellant, that section 1160 occurs in chapter á, and that it affords immunity only from the provisions of that chapter, and that section 1161 is found in chapter 6, and applies to every company formed for the *133purpose of insuring lives, and hence the defendant must comply with the provisions of chapter 5. Chapter 5 enumerates only two classes of companies, joint-stock companies and mth tual companies. It provides what each must do, before it is authorized to engage in business. Section 1160 authorizes'a company which does not fall under either designation. Now it could not have been the intention of the legislature, after authorizing such company in section 1160, to impose such restrictions in sections 1161, 1162, and 1163, as would render the organization impossible.
Sections 1161 to 1163 must not be so construed as to repeal section 1160. They are in jpari materia, and must be construed together, and must, if possible, be given force and effect. In order to do this, the word every must be limited to the stock and mutual companies referred to in the following sections. To construe it as applying to the companies authorized in sestion 1160, would prefer shadow to substance, and illustrate the maxim qui Imret in litera, hmret in eortice.
III. It seems to be insisted, however, that even section ■ 1160 of the Code does not exonerate the defendant from making annual report and paying the requisite fee thereon. This company was not organized until April, 1881. It was not required to make annual statement until January 1, 1882. Code, § § 1141 and 1167. This action was commenced on the 17th day of August, 1881, and was determined in the court below in September, 1881. It follows that the defendant could not have been in default in this respect when the action was commenced. The demurrer was properly sustained.
Affirmed. -