Opinion
March Term, 1898.
J. Rider Cady, for the appellant.
Walter H. Jaycox, for the respondent.
We know of no duty imposed by law upon the Superintendent of Insurance in regard to the subject-matter of this application, the performance of which is sought to be enforced by the writ of mandamus. Though this objection may have been waived by the appellant in the proceedings before the Special Term, we understand that he urges it on this appeal; and even were it now waived we should be unwilling to give effect to any concession of the parties and grant the writ of this court against a public officer to compel him to do that which no law makes it incumbent upon him to do.
In my opinion, neither the position taken by the appellant nor that maintained by the respondent, in regard to the statutory provisions as to the insolvency of mutual fire insurance companies, is correct. I think that section 41 of the Insurance Law (Laws of 1892, chap. 690) does not apply to the case of a mutual insurance company; neither does section 118 in its entirety. Otherwise, as substantially conceded by the learned counsel for the appellant on the argument, the capital stock of every mutual company would be impaired instantly upon its organization and before it had lost a dollar or spent a dollar. Under his claim the cash paid in and stock notes would constitute the capital stock of the company; but, as such notes and cash are only received in consideration of policies of insurance issued to the makers of the notes, the unearned premiums would have at once to be charged against that capital, and thus the capital be impaired to the extent of those premiums. I think the case of the relator and of all mutual corporations is covered by section 43. The difference in the language of these two sections makes this apparent. Section 41 provides for a case where it appears that the capital stock of an insurance company is impaired. Section 43 provides for a case where the assets or capital of a mutual insurance company is insufficient to justify its continuance in business. This makes the distinction between a company having "capital stock" and a company having only "assets or capital" clear. In the case of a mutual insurance company there can be no impairment of the capital stock within the statute. A perfect protection for the public is provided. Whenever the superintendent deems the assets of a company insufficient to justify its continuance in business, the Attorney-General can proceed against the corporation.
The report of the examiners in the main, and with the exception of certain small items, states the condition of the relator correctly. It has $20,214.17 cash assets and $79,247.07 capital stock notes with a total liability of $44,558.37. To the amount of the cash assets should probably be added an item of $4,879.85 for furniture, stationery, etc., and it may be another item of $1,710.99 for amount due from the Fire and Marine Lloyds. But the examiners were not compelled to do more than state the facts, and this they have done, except in the instances indicated. On these facts the superintendent is to proceed and determine whether the assets of the corporation, both cash and notes, over and above its liabilities, are insufficient to justify its continuance in business. This is the only determination to be made by the superintendent. There is no such thing as impairment of capital stock in the case.
But I by no means wish to be understood as holding that the relator or any mutual insurance company should be allowed to continue in business indefinitely, merely because it has some surplus of assets over liabilities. If that were so, with a net dollar to its credit it might assume obligations to which, if the business proved unfavorable, it would have no means to respond. The question is one for the superintendent to determine when the net assets are too small to justify the company in going on.
The final order appealed from should be reversed and application dismissed, but without costs.
All concurred.
Final order reversed and application for mandamus denied, without costs.