3 Mo. App. 262 | Mo. Ct. App. | 1877
delivered the opinion of the court.
This was a proceeding under the act for the incorporation and regulation of life assurance companies (Acts 1869, p. 26; Wag. Stat. 738), instituted by the superintendent of the Insurance Department to restrain the respondent from doing further business as a life insurance company, and to Avind up its affairs. On December 17, 1876, the appellant filed his petition in the court below, in which he averred that on December 15, 1873, the Mound City Life Insurance Company, a corporation incorporated under the laws of this State, entered into a pretended contract of reinsurance, by which, in consideration of a pretended assignment to it of the assets of respondent, it agreed to reinsure the risks of the respondent; and appellant annexed a copy of the contract and made it part of his petition. The appellant further averred that, having good reason to suspect that the
The respondent, in its answer, admits the contract with the Mound City Life Insurance Company; says that the respondent has no knowledge or information sufficient to form a belief as to whether the appellant had good or any reason to suspect that the affairs of the respondent were in an unsound condition ; admits that many suits are pending against the company for premiums, and denies that its assets are being so rapidly diminished as to render its further proceedings hazardous to the public or to its policy-holders. The answer then sets up that, under powers in its charter expressed, and being in 1873 prohibited by order of the court below,
The plaintiff filed a motion for judgment upon these pleadings, which motion the court overruled. The court then dismissed the petition ; whereupon the appellant filed a motion to set aside the order of dismissal, on the ground that the court erred in dismissing the case, and that, in any event, the plaintiff was entitled to amend his petition.
The contract annexed to the petition provides, in substance, that the St. Louis Mound City Life Insurance Company reinsures all outstanding risks of the St. Louis Mutual Life Insurance Company, and guarantees their prompt payment to the policy-holders, and assumes all liabilities of every kind of the St. Louis Mutual Life Insurance Company, and agrees that policy-holders and creditors may enforce their demands against the reinsuring company precisely as they might have done against the company originally liable ; and covenants to indemnify the St. Louis Mutual Life against any demands whatsoever existing at the date of the agreement. The reinsuring company is to issue to the stockholders of the original company stock of the reinsuring com
The first question which arises in this case is whether the court below had jurisdiction of the proceeding against this respondent. If it had not, the court was authorized to dismiss at any stage of the case. This question involves the inquiry whether the defendant is subject to the provisions of the act for the incorporation and regulation of life insurance companies; and especially of the 41st section of that act. The respondent contends that, as it exercises its powers by virtue of a special charter (Acts 1861, p. 158), it is exempt from the provisions of the general act. But it is clear, from the language of the general law, that the Legislature intended that some of its provisions should apply as well to life insurance companies incorporated under special acts as to those organized under the general law. Secs. 19, 20, 22, 41. There can be no question as to the intention; nor can there be any question as to the power of the Legislature to make the provisions of the 41st section applicable to companies in the situation of the respondent. The provisions in question are general regulations for the protection and security of the citizen, made by the Legislature in the exercise of its powers of supervision and superintendence, and in no way impair the obligation of a contract. Curtis v. Whitney, 13 Wall. 68; Ochiltree v. Railroad Co., 21 Wall. 249; The State v. Matthews, 44 Mo. 523; The State ex rel. v. King, 44 Mo. 283.
What averments, then, are necessary to be made under the 41st section in order to bring the case within the statute ? Respondent contends that the petition does not show that the respondent was doing business, at the time of the filing of the petition, within the terms of the act; nay, more, that the petition, by its language and by the contract made part of it, shows that the respondent had ceased to do busi
Moreover, the argument that the act does not apply because the company is doing no new business virtually begs the question. The payment of new premiums by which policies are kept alive, and the payment of new death losses by which policies are discharged, is not business which has ever been done before; and it is business of life insurance, and such as life insurance companies especially do. There would certainly be some scope for the operation of a writ of injunction which should restrain a company so acting from ‘ ‘ further proceeding with its business.”
But it is said the petition does not contain even any general averment to the effect that the respondent was, at the date of the filing of the petition, doiug the business described in the 1st section of the act; that it does not even aver that the respondent was doing any business as a life insurance company. The petition is, indeed, singularly
The contract, or the material part of it, is given above. By it the respondent agrees to sell, transfer, and deliver all its property and assets to the Mound City Life Insurance Company, and the latter, on its ¡3art, agrees to reinsure, and states that it does reinsux-e, all the risks of the respondent, and fux'ther agrees to pay all its debts and liabilities. It would seem that it was the inteixtion of the parties that all the business as well as all the assets of the respondent should be turixed over to the Mound City Company. The respondent wished to get xid of every possible obligation, present or-contingent, and substitute the Mound City for itself; and for this purpose was willing to turn over all its property. Perfectly cox’rect motives may have actuated the directors ; and they may have thought they were making an arrangement highly beneficial for policy-holders as well as for-the stockholders. But the question of the legal right to make such a contract, and by it to bind the policyholders, is another matter. The law does not compel a person to be benefited against his will. He may resist the attempts of those who have contracted with him to-
The general rule is that the officers of a corporation cannot, against the wishes of a minority of the stockholders, convey away the entire property which is essential to carry on the business of the company. There are some exceptions to this rule, in cases of private corporations of a strictly', business character, in the management of which neither the State nor the public has any direct interest. Buford v. Keokuk Northern Line Packet Co., ante, p. 159; Treadwell v Salisbury Mfg. Co., 7 Gray, 404. Theseexceptions, how
But still stronger reasons present themselves against the validity of this-transfer. The State has an interest in the matter. It has adopted a line of policy which is plainly expressed in the acts of the Legislature. A department of insurance has been created, and a chief officer of that department appointed who represents the State in matters within the scope of his duties as prescribed by the acts. Various regulations are made for the good of the public and the protection of the citizen. In this respect life insurance companies stand in a position different from that of ordinary corporations. The Legislature has said, in effect, that, owing to peculiarities either in their character or their management, life insurance companies must be subject to a constant supervision and to many restrictions. This effectually excludes them from that class of corporations which have the power, in itself exceptional in its nature, to sell or transfer all' their property, under certain circumstances, against the will of the minority of their stockholders. Such a power would contravene, not only particular provisions of these acts, but their intent and purport. It would be impossible for the superintendent of insurance to properly exercise the powers vested in him if an insurance company, subject to the provisions of these acts, could, at the will of its stockholders and against the wishes of any of its policy-holders, turn over all its assets to another company, either under
As it was apparent that the court below had jurisdiction of the subject-matter, the particular proceeding, and the defendant, if the court thought that the allegations of the pleadings, instead of being, as they should be, clear and direct, were either defective or argumentative and ambiguous, it should have permitted the appellant to amend and to conform his petition to well-established rules. On the motion for judgment the facts were before the court, and it was error to dismiss the proceeding at once, or before the plaintiff had had an opportunity to amend.
The judgment of the court below, dismissing the petition, is reversed, and the case remanded to be proceeded with in accordance with this opinion.