Kelley v. Bender

22 Ohio C.C. 144

• Court: Ohio Circuit Courts
• Decided: January 15, 1901
• Status: Published

Opinion

Makvin, J.

But one question is raised in this case, and that arises upon the sustaining by the trial court of the demurrer to the petition of the plaintiff. That question is as to whether the trustees of a life insurance company organized under the act of the general assembly, passed April 25, 18’9’8, sections 3631-24, Revised Statutes, ct seq., and found in 93 O. L., 343, are personally liable for a death loss upon a policy issued by the company while they were in office as such trustees.

It is urged that they are so liable because, it is said, that such an insurance company is a corporation not for profit and that, therefore, the provisions of section 3261, Revised Statutes, apply.

This sections reads:

“The trustees of a corporation created for a purpose other than profit, shall be personally liable for all debts of the corporation by them contracted.”

The act under which the company was organized, of which these defendants are trustees, provides for the organization of a life insurance company without any capital stock, and that its business shall be managed by a board of trustees.

In section 3 of this act, 93 O. L., 343 (Revised Statutes., sec. 3631-26), this provision is made:

Such companies “shall be subject only to the provisions of this act, excepting that the provisions of chapter 8, title 3, part one, and of chapter 10, title 2, part 2, of the Revised Statutes, shall be applicable so far as the same are not' inconsistent with the provisions of this act.”

As section 3261 is not found either in the act under which this corporation is organized or in that portion of the statutes which is mentioned in the section above quoted from, it would seem to follow that it has no application to this corporation; but it is urged that even if this be so, it still applies to the trustees of such corporation.

Doubtless section 3261 was enacted because of the.provisions in our state constitution, article 13, section 3, which reads:

“Dues from corporations shall be secured by such individual liability of the stockholders, and other means, as may be prescribed by law; but, in all cases, each stockholder shall be liable, over and above the stock by him or her owned, and any amount unpaid thereon, to a further sum, at least equal in amount to such stock.”

"Since corporations not for profit, are authorized to be organized without any capital stock, the legislature found it necessary, in order to comply with this mandate of the constitution, to make provisions for the protection of the creditors of such corporation and hence enacted section 3261, Revised Statutes.

The statute under which this corporation is organized, makes provision in section 2, 93 O. L., 343 (Bates Revised Statutes, section 3621-25), for the protection of policy-holders, in these words:

“Every corporation incorporating or reincorporating under the provisions of this act, shall deposit with the superintendent of insurance in such securities as are required by law to be deposited by insurance companies, the sum of five thousand dollars within one year after the date of such incorporation or reincorporation, and such incorporation shall each year thereafter, upon filing its annual statement, deposit in like securities with the superintendent of insurance, the sum of two thousand dollars on each million of insurance in force for the last calendar year, as shown by its said annual statement, until the sum of one hundred thousand dollars shall have been deposited. The securities deposited with the insurance department pursuant to this section shall be held by the superintendent in trust for the benefit and protection of and as ’security for the policy-holders of such corporation, their legal representatives and béneficiaries.”

By section 6 of the act 93 O. L., 343 [Bates Revised Statutes, section 3631-29], a reserve fund is also provided.

We think it clear that it was not the intention of the legislature, that the’ trustees of such a corporation should be personally liable for payment of the policies, but'that the policyholders and the beneficiaries under such policies, must trust to the companies and the protection afforded them under the provisions of the act itself.

To say that the. corporations are subject only to the provisions of'this act and’the' statutes which this act provides such corporations shall be subject to, and yet that’ the trustees of such corporations are subject to the provisions’ of other statutes, would seem to be very technical. To' hold otherwise, would be practically to make the act wholly inoperative, for it can hardly be conceived that any man not hopelessly insolvent, could be found to act as trustee for any such corporation if he were to be held personally liable for all losses under policies issued by the corporation.

F. E. Stevens, for Plaintiff in Error. Bentley & Vickery, for Defendant in Error.