Clifton v. School District No. 14 of Russellville
| Decision Date | 03 February 1936 |
| Docket Number | 4-4228 |
| Citation | 90 S.W.2d 508,192 Ark. 140 |
| Parties | CLIFTON v. SCHOOL DISTRICT NO. 14 OF RUSSELLVILLE |
| Court | Arkansas Supreme Court |
Appeal from Pope Chancery Court; J. B. Ward, Chancellor; affirmed.
Suit by J. A. Clifton against School District No. 14 of Russellville and others. From an adverse decree plaintiff has appealed.
Decree affirmed.
Joe D. Shepherd, for appellant.
Robert Bailey and Eugene Quay, for appellees.
Pat Mehaffy and Carl E. Bailey and Walter L Pope, amici curiae.
The question involved on this appeal is whether school districts in this State may buy fire and tornado insurance on the buildings and property in the district in foreign mutual insurance companies authorized to do business in this State.
Specific statutory authority for insuring public property in mutual insurance companies was conferred on any public or private corporation, board, or association, by § 8 of act 652 of the Acts of 1919, which section is § 6026 of Crawford & Moses' Digest, and is as follows:
Appellant contends that this section only attempts to authorize the purchase of insurance in domestic mutual corporations, and confers no authority to purchase insurance in foreign mutual insurance companies, but this contention is without force when read in connection with § 16 of said act, incorporated as § 6066 of Crawford & Moses' Digest, which is as follows: "Any mutual insurance company organized outside of this State, and authorized to transact the business of insurance on the mutual plan in any State, district or territory, shall be admitted and licensed to transact the kinds of insurance authorized by its charter or articles to the extent, and with the powers and privileges specified in this act, and when it shall be solvent under this act, and shall have complied with the following requirements."
This suit was brought by appellant, a taxpayer, to restrain appellee from buying insurance to protect its property from loss by fire and tornado from Pennsylvania Lumbermen's Mutual Fire Insurance Company, a foreign corporation doing business in this State under permit, and which operates its business under the mutual system without capital stock.
We think act 652 of the Acts of 1919 confers authority upon school districts to buy fire and tornado insurance in foreign as well as domestic mutual companies when foreign mutual companies have complied with all requirements exacted of them in order to write the kind of insurance authorized by their respective charters and articles. The record in this case reflects that Pennsylvania Lumbermen's Mutual Fire Insurance Company has met all such requirements.
Appellants contend, however, that the statutes quoted above authorizing the acceptance by school districts of policies in mutual companies makes school districts members of a private corporation and lends their credit to such corporations in violation of § 5 of article 12, and § 1 of article 16 of the Constitution of 1874, which reads as follows:
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