Court Opinion

ID: 6961342
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:46:07.793447+00
Date Added: 2024-06-11T16:08:27.104392
License: Public Domain

Mr. Justice Sheldon, dissenting: The general Insurance law of this State, which came in force July 1, 1869, contains the following sections: “Sec. 16. The trustees and corporators of any company organized under this act shall be severally liable for all debts or responsibilities of such company, to the amount by him or them subscribed, until the whole amount of the capital of such company shall have been paid in, and" a certificate thereof recorded, as hereinbefore provided. ” “Sec. 19. All insurance companies heretofore organized in the State of Illinois, and now doing business in this State, are hereby brought under all the provisions of this act, except that their capitals may continue of the amounts and character named in and authorized by their respective charters, during the existing term of such charters, and the investments of the capital and assets of such companies may remain the same as prescribed by their charters, anything in this act to the contrary notwithstanding; and such companies shall also be entitled to all the privileges and powers granted by said charters.” Rev. Stat. 1874, pp. 595-6. The ground of the claim of the individual liability of the defendant for this debt against the company is, that the whole amount of the capital of the company has not been paid in, and a certificate thereof recorded, according to said section 16 of the general Insurance law. The claim of the liability is not under the charter of the company; there is no pretence that defendant has not paid his subscription for stock; but the claim is rested on this provision in section 16, and the provision in section 19, of the general Insurance law, which was passed subsequently to the charter and the organization of the company. On account of a reservation contained in an amendment to the charter, there is no question made by counsel as to the power of the legislature to impose this individual liability by this subsequent general Insurance law, if “corporators” is to be construed as including stockholders; but the question is, whether it has done so. Section 16, of the general Insurance law, is a provision in reference to insurance companies which should thereafter be organized under that general Insurance act. Section 19 of the act brings all insurance companies theretofore organized in the State, and doing business, under all the provisions of such general Insurance act, except that their capitals might continue of the amounts and character named and authorized by their charters; that the investments of the capital and assets of such companies might remain the same as prescribed by their charters, anything in the act to the contrary notwithstanding; and that such companies should he entitled to all the privileges and powers granted by them charters. It is thus only in certain respects • that already organized insurance companies are brought under the provisions of the general Insurance law, and the inquiry here. is, whether in this respect of this provision of the law in section 16, the Germania Insurance Company has been brought under the general Insurance law. It has not—as is explicitly declared by said section 19—if thereby there would be interference with its capital continuing of the character authorized by its charter, with the investments of its capital and assets remaining the same as prescribed by its charter, or with the privileges or powers granted by its charter. The charter is to be looked at, as it is made a public act, and the declaration makes it a part thereof. The charter of the company provides, that when the corporators and their associates shall have subscribed $100,000, and shall have paid in $10,000, and shall have secured the stock not paid in by certain enumerated securities, and have chosen certain directors and officers, the company shall be deemed fully organized, and enjoy the powers conferred by the charter. 'Ah the declaration avers that the corporation was organized under and by virtue of its charter, and had been in operation long prior to the passage of the general Insurance law, it may be assumed that these conditions of the charter, as to the amount of stock to be paid in, and the giving of the required securities for the stock not paid in, had been complied with, the presumption to be indulged being, that the company was rightfully organized and rightfully doing business. It being taken, then, that the required amount of stock had been paid in, and that the residue of the stock not paid in had been secured in the prescribed manner, the company had a franchise to do the business of fire, marine and life insurance. The securities for the stock not paid in formed a part of the capital stock of the company,—constituted a feature of the character of its capital. It was to all substantial intent and purpose an investment of the capital and assets of the company. It was, in effect, the same as if the subscriptions had been paid in and the money then invested in such securities, and, in my view, comes within the exceptions in said section 19 of the general Insurance law, as to bringing already organized companies under its provisions; that the capital of any such company might continue of the character authorized by its charter, and that the investment of its capital and assets might remain the same as prescribed by its charter. This would seem to be language framed with a view to just such a case as here presented. It was also a privilege to the company to hold and retain these securities as they were, and so the case may also be regarded as within the last and more general exception of the section, that the company should be entitled to all the privileges and powers granted by its charter. There is every reason why there should have been exception of such cases. These assets of the company, its unpaid subscriptions, were secured by satisfactory securities, as is to be presumed. To what end should they have been required to be immediately collected in ? It could not be for the purpose of having the money kept in hand, for the general Insurance law itself authorizes the companies to be formed under it to invest their capital and assets in securities. By such collection, securities which were satisfactory would have been forced to be collected in, in order, as the general Insurance law authorizes to be done, to reinvest the proceeds in securities again. No such idle purpose could be attributed to the legislature, and the necessity of any such action was guarded against by the exceptions named. Further, this provision in section 16 has no proper application to insurance companies already organized and doing business. It relates to insurance companies to be thereafter organized under that general’ Insurance law. The act made it a preliminary and a prerequisite to the commencement of business and issuing policies, by any company, that the whole amount of the capital of the company should have been paid in, and a certificate thereof from the proper officer be obtained and filed, the 10th section of the act providing, “which, [cerifícate] on being filed in the office of the clerk of the county where the company is to be located, shall be their authority to commence business and issue policies; ” and the 16th section, under which the liability here is claimed, provides that until the whole amount of the capital of any company organized under, that act shall have been paid in, the trustees and corporators of the company shall be liable for all debts or responsibilities of the company to the amount by them subscribed. But this company, by its charter, was authorized to commence business when $10,000 should have been actually paid in on the stock subscribed, and the residue of the subscriptions secured as by the act provided. Under this authority of its charter it was already, when the general Insurance law was passed, and for a long time before had been, rightfully doing business. This provision in section 16, in relation to something to be done by insurance companies thereafter to be formed as an authority for them to commence business, would not properly apply to preexisting companies which were already, and for a long time before had been, rightfully doing business. The latter needed no authority to commence business and issue policies. They already had it. But it was future companies, thereafter to be organized under the law, that were required to have such authority to commence business and issue policies, and until they obtained it the trustees and corporators were made subject to this liability imposed by this 16th section of the act. ; To repeat, in short: Previously organized companies, under special charters, are in some respects brought under the provisions of the general Insurance law. The bringing them under such provisions is done entirely by the 19th section of the act;, but this section carefully enumerates certain exceptions where such former companies shall not be brought under the provisions of the act. It does seem to me that the case of this insurance company, with the special provision of its charter for the investment of the unpaid portion of subscriptions in certain enumerated securities, comes within these exceptions upon any fair reading of language. To apply, here, the provision in section 16 of the act, and make the stockholders in this company liable for the debts of the company to the amount of then' subscriptions, until the whole amount of subscribed stock of the company shall have been actually paid in, in money, and a certificate thereof obtained and recorded, as provided by the act, would, as I conceive, be in contravention of such exceptions that the capitals of such previously organized companies “may continue of the amounts and character named in and authorized by their respective charters, and the investments of the capital and assets of such eom-panies may remain the same as prescribed by their charters, anything in this act to the contrary notwithstanding; and such companies shall also be entitled to all the privileges and powers granted by said charters. ” And it would seem, further, as before said, that this provision as to the whole amount of capital being paid in, and a certificate thereof being obtained and recorded, which is made the authority for commencing business and issuing policies, is, in its nature, not properly applicable to preexisting companies doing business under authority of law theretofore granted. These, as I regard, are reasons sufficient, without looking further, for sustaining the demurrer to the declaration. There is no previous case of contrary import in this court which should have any binding force as a precedent. In the case of Butler v. Walker, 80 Ill. 345, in denying the application for a rehearing, there was express reservation made that the grounds of the decision in that case might be reexaminable in any subsequent ease of the kind that should come before the court. The special provisions of the charter of the insurance company there, in respect of the authority for the taking of securities for the unpaid portion of its subscribed stock, were not at all considered or brought to the attention of the court in that case. Subsequent cases,'until the present, but followed Butler v. Walker, there having been no raising or consideration of the questions- in this case discussed. Not until now has there been a presentation or consideration of these questions.