Ins. Com'r v. Provident Aid Soc.

• Decision Date: 28 December 1896
• Citation: 36 A. 627,89 Me. 413
• Parties: INSURANCE COM'R v. PROVIDENT AID SOC. et al.
• Court: Maine Supreme Court

36 A. 627

89 Me. 413

INSURANCE COM'R

v. PROVIDENT AID SOC. et al.

Supreme Judicial Court of Maine.

Dec. 28, 1896.

(Official.)

Report from supreme judicial court, Cumberland county.

Bill by the insurance commissioner against the Provident Aid Society for an injunction and a receiver. There was a hearing on bill and answer, and a decree appointing a receiver and master. The Bay State Association filed various claims to the funds in suit. Submitted on report Recommitted to the master.

L. C. Cornish, for receiver.

Clarence Hale, for Bay State Benefit Ass'n.

R. I. Thompson, for Provident Aid Soc.

STROUT, J. When this bill was filed, October 18, 1895, the defendant company had on deposit with the state treasurer securities of the par value of $7,000, and on deposit in Portland Trust Company $3,051.60, and an unliquidated balance in the hands of B. N. Johnson. All of these funds belonged to the mortuary fund of the society, and were charged with a trust for the security of its certificate holders.

In August 1895, and before the filing of this bill, the Provident Aid made a contract with the Bay Stat; Beneficiary Association of Massachusetts, by the terms of which the Provident Aid undertook to transfer to the Bay State all its risks and all of its funds, including the mortuary fund, and the Bay State agreed to assume the liability of the Provident Ald." upon its outstanding certificates then in force, and reinsure its members. This contract was approved by a two-thirds vote of those present and voting at a meeting of the insured in the Provident Aid, called to consider the same, on July 30, 1895, in accordance with section 5 of chapter 237 of the Laws of 1889. Thirty-eight voted to approve the contract, and six voted against it. Although the contract bound the Bay State to reinsure all members of the Provident Aid who so desired, it became a contract only with such members as consented to the change and accepted the liability of the Bay State in lieu of that of the Provident Aid. Those holding certificates in the Provident Aid, and not electing to accept the contract with the Bay State, had the right to retain their certificates in the Provident Aid, and rely upon its liability. The master has found that 855 members of the Provident Aid accepted insurance in the Bay State, and paid to it the assessment due October 1, 1895, and that 617 members of the Provident Aid did not accept insurance in the Bay State, nor pay the assessment due October 1, 1895...