81 N.J.L. 416 | N.J. | 1911
The opinion of the court “was delivered by
The statement made by the Prudential Insurance Company of America to the taxing authorities of the city oí Newark shows that the sum of $14,(523,279.37 was apportioned by it to deferred dividend policies pursuant to the requirements of chapter 71 of the laws of 1907. Pamph. L., p. 132. The act referred to provides that “every domestic life insurance company doing business in this state, conducted on the mutual plan or in which policyholders are by the terms of their policies entitled to share in the profits or surplus shall, on all policies of life insurance heretofore or hereafter issued, under the conditions of which the distribution of surplus is deferred to a fixed or specified time and contingent upon the policy being in force and the insured living at that time, annually ascertain the amount of surplus to which all such policies as a separate class are entitled, and shall annually apportion to such policies as a class the amount of the surplus so ascertained, and carry the amount of such apportioned surplus, plus the actual interest earnings and accretions of such fund, as a distinct and separate liability to such class of policies oil and for which the same was accumulated, and no company or any of its officers shall be permitted to use any part of such appor
It is apparent, from a reading of this statute, in connection with the item in the company’s statement which has been cited, that this sum which has been apportioned to deferred dividend policies is a part of the profits or surplus made by the company in the conduct of its business; in other words, a part of its assets or propertjr. By setting aside this fund, in pursuance of the mandate of the act of 1907, the company has declared (and indeed their counsel expressly so state in their brief) that, by the terms of policies which it has written, the holders thereof are entitled'to share in its profits or surplus to the extent shown by the apportionment'. This being so, it is manifest that the liability to pay to the holders of these policies, or their beneficiaries, the sum so apportioned arises, not from the act of apportionment, but from the contract contained in the policies. The statute is based upon the existence of this fact. There is no suggestion in it of an attempt to create a liability not theretofore existing. On the contrary, it expressly deals with a liability created by the company itself to pay the holders of its policies, or their beneficiaries, a part of its surplus or profits, and requires that the amount of that liability shall be ascertained annually, and, after having been so ascertained, shall be set aside and carried, with its interest earnings and accretions, as a distinct and separate liability to these policies. Obviously, the single purpose of the statute is to make more certain the ability of the company to meet this liability to its policyholders when the time arrives for distribution among them or their beneficiaries of the share in the surplus or profits to which their policies entitle them.
The liability of the company to pay to its policyholders, or their beneficiaries, this fund, apportioned and segregated from its other assets, being created, not by the act of 1907, but by the contracts contained in the policies written by it, is it entitled to have the amount of this liability deducted from the total value of its property by virtue of the provision
If, then, the liability to pay to the policyholders of the company, or their beneficiaries, this $14,623,279.37 is a “liability on policies.” the taxing officers of the city of Newark were entirely right in refusing to allow its deduction in addition to the value of the company’s policies as computed by the commissioner of banking and insurance. That it was so considered by the legislature is manifest from the mandate of the act of 1907 that the amount of the surplus apportioned to deferred dividend policies shall be carried as a liability to such class of policies. That such is its character in fact we have no doubt. A liability on a policy is an obligation on the
It appears from the proofs in the cause that the commissioner of banking and insurance, in computing the value of the defendant company’s policies, did not take into account this fund apportioned to deferred dividend policies, and we are told that had this been done the total liability of the company upon its policies would have been increased by the amount of this fund. It is not clear to us how the mere setting aside and segregation of this fund from tire general mass of the company’s assets has operated to increase the amount of the company’s liability on its policies; but, conceding this to be the fact, we are, nevertheless, of opinion that the action of the Newark taxing officers in refusing to permit the deduction of this sum of money from the total value of the company’s property was in strict performance of the duty imposed upon them by the statute. The mandate of the legislature is that the taxing officers, in allowing a deduction to the company'for liability on its policies, shall take the value thereof as computed by the commissioner of banking and insurance. No supervisory power over that computation is vested in the taxing officers; they are bound to accept it as made. If the commissioner has erroneousty computed that value, either by the adoption of an erroneous principle, or by failing to take into consideration items which go to make it up, and his error results in injury to the company, the only remedy of the-aggrieved party, in the event of the refusal of the commissioner to correct his mistake, is by a direct attack upon the accuracy of the computation in the Supreme Court. So long as the commissioner’s computation stands it must be accepted as final by the taxing officers.
The judgment of the Supreme Court will be affirmed.
For reversal—Rone.