77 Md. 566 | Md. | 1893
delivered the opinion of the Court.
The questions in this appeal arise in the distribution of the assets of the Baltimore and Ohio Employes Relief Association. The association was incorporated by the Act of 1882, chap. 358, mainly for the purpose of affording relief to such employes of the railroad company as might become members, in case of sickness, accident, old age and death.
The powers of relief were by its charter, confided to a committee of management, consisting of ten persons, one of whom was the President of the Baltimore- and Ohio Railroad Company, four to be appointed by the president of said company, and five to be elected annually by the members of the association. This committee was empowered by the charter to adopt such constitution and by-laws and regulations as may be deemed proper and necessary to accomplish the objects of the association, with power “from time to time, to alter, amend, or repeal any provision of the constitution, bylaws, and regulations.”
Under this Act, the relief association was formed for the purpose of relieving the necessities of its members in case of sickness, accident and death, but no provision was made by the constitution or by-laws for the relief of its members in case of old age or other infirmities. To promote these objects of the association, and to in
First, as to assets belonging to the Association. Shortly after its organization and the adoption of a constitution and by-laws providing for the relief of its members in case of sickness, accident, and death, it was deemed advisable by the railroad company and the Committee of management that a pension feature should be added to the relief feature, the object of which was to provide for the support and maintenance of such members as were by reason of old age no longer able to remain in the active service of the railroad company. And in furtherance of this object, the railroad company agreed to appropriate twenty-five thousand dollars annually to the pension feature, provided the relief association would agree to pay its own operating expenses, which amounted, as we have said, to at least twenty-five thousand dollars annually, thereby releasing the railroad company from its obligation to pay the same. This offer of the railroad company was on the 15th July, 1884, accepted by the committee of management; and from that time, until the dissolution of the association, a period of five years, the railroad company paid twenty-five thousand dollars annually to the pension fund, and the association paid its own operating expenses, out of
The Court below being of opinion, that the comihittee; of management had no power to make the agreement, whereby the r'ailroad company was released from its obligation to pay the operating expenses of the relief association, decreed that the auditor should treat as part of' the gross assets of the association, all sums paid by it for operating expenses from the date of said agreement till its dissolution in 1889. In other words, the Court held that the committee had no power to make an agreement with the railroad company, the effect of which was to charge the payment of the operating expenses upon the relief fund of the association, thereby releasing the railroad company from its obligation to pay such ex-, penses. This relief fund was contributed by the members of the association for the purposes of relief in case of sickness, accident, and death; and the constitution provided that it should be used exclusively for these and for no other purposes. And, such being the case, the committee of management could not, it is clear, make any agreement the effect of which was to appropriate part of this fund for other and different purposes. This power they could not exercise under the general powers belonging to a committee of management or a board of directors. Burke vs. Smith, 16 Wall., 395; Railway Company vs. Allerton, 18 Wall., 235.
The committee was authorized by the Act of incorporation and by the constitution of the association to alter and amend the constitution at any time it might deem proper, to accomplish the objects for which the association was incorporated. And though in the formation of the relief association no provision was made in the constitution or by-laws for the support of such employes as might be unable by reason of old age to earn the means of support, yet, as this was one of the objects for which
It seems to us, therefore, that the Court was right in saying, that all sums paid by the association for its operating expenses from 1st October, 1884, to the time of its dissolution must he considered as part of the gross assets of the association.
We come now to the only question, in regard to which it seems to us there can be any real contention.
And the several cases relied on by the appellees, instead of supporting, are, it seems to us, so far as they are applicable, all against their contention. In Mayer vs. Attorney-General, 32 New Jersey Equity, 813, the Court held that in the distribution of the assets of an insolvent mutual life insurance company, the holders of policies matured by death, and the holders of endowment policies, where the risk had terminated by the attainment of the age specified, were to be treated as preferred creditors, and for the reason that by the maturity of these policies, the status of the policy holders had been changed. Their relation to the company, said the Court, was the same as the relation of a creditor to a firm, the payment of whose claim is to be preferred to the claim of a member of the firm. But where the risk or endowment had not terminated at the date of the insolvency of the company,- — that is, where the policy holder had not attained the specified age, — such policies were not to be treated as matured or preferred claims, even though all the premiums had been paid, because “such policies were continuing risks, as much so,” say the Court, “in nature, though not in degree, as ordinary policies covering the full period of life.”
And in Commonwealth vs. Massachusetts Ins. Co., 119 Mass., 45, it was decided that a mutual insurance company, is not liable for any loss which occurs after the appointment of the receiver and the judicial sequestration of its property, and that, where prior losses absorb all the funds of the company, and it becomes necessary to make assessments upon its members, if the assess
The decision in Stamm vs. Northwestern Mut. Ben. Ass’n, 65 Michigan, 317, has not, it seems to us, any bearing upon the question now^before us. In that case the commissioner of insurance refused to license the association to continue business, and the point decided was that the board of trustees had no power to make assessments for the purpose of paying losses which occurred after the license to do business was refused.
And in Taylor vs. North Star Mut. Ins. Comp’y. 48 North Western Rep., 773, the question decided was that policies on which losses have not occurred, are not debts or fixed liabilities of the company, and that losses occurring after the appointment of a receiver to wind up the affairs of an insolvent mutual insurance company cannot be proved or allowed as claims against the company. These cases do not, it seems to us, support in any manner the contention of the appellees, and we do not see on what principle the right of a member to claim benefits for a disability that occurred before the dissolution of the association can be held to cease or terminate with its dissolution. The appellant is, therefore, in our opinion, entitled and ought to have been allowed credit for the payment of all benefits due for accidents and sickness occurring prior to the dissolution up to the time of the auditor’s account; and the auditor should have further allowed a sum sufficient to meet in the future any of these claims that may still exist, to be held and paid out by the appellant until all such claims have been paid. Eor these reasons, the decree will be affirmed in part and reversed in part, and the cause remanded.
Decree reversed in part, and affirmed in part, and cause remanded.