Levy v. Mutual Life Insurance — 27 N.Y. St. Rep. 106

Majority

p. 106

Samuel Levy et al., App’lts, v. The Mutual Life Insurance Company, Resp’t.

(Supreme Court, General Term, First Department,

Filed November 7, 1889.)

Headnote

Insurance companies—Injunction—Pleading.

Where the complaint alleged that plaintiffs were policy holders in de- • fendant, that it was engaged in erecting a building in excess of its authority by its charter, and was thereby exposed to an action by the attorney general for its dissolution, but it did not appear that any special injury from these acts would result to plaintiffs or any other person, nor that these acts would diminish defendant’s ability to meet its engagements, nor that plaintiffs apprehended any inability upon the part of defendant to pay their policies from its assets, Held, that no cause of action to restrain such acts was stated

Appeal from a judgment sustaining a demurrer to the plaintiff’s complaint and directing the complaint to be dismissed.

James A. Dennison, for app’lts; Robert Sewell, for resp’t.

It appears by the complaint that two policies of life insurance were issued by the defendant upon the life of Samuel Levy for the benefit of his wife. They amounted together to the sum of $80,000. And as a ground of action it was alleged that the defendant, which was incorporated under an act of the legislature of this state, passed April 12, 1842, had purchásed land and was engaged in the erection of a building upon it as an addition to the building previously erected and owned by it, and that this was in excess of, or beyond, the authority conferred upon the company by its charter, and exposed it to an

p. 107

action by the attorney general for its dissolution. No special injury to either of the plaintiffs, or any other person taking insurance from the defendant as a mutual insurance company, was alleged or shown by the complaint.

It was not stated that the ability of the defendant to meet these, as well as all its other engagements, was or would be in any respect diminished or affected by the acquisition of the land or the erection of the building. But the sole peril to the plaintiffs was the possibility, or remote probability, that the attorney general, for this exercise of authority, might institute and maintain an action to dissolve the company and forfeit its corporate rights. But even if that should be done no allegation was made of any apprehended inability to pay the amount of its policies out of the assets of the company. And it did not appear, consequently, that either of the plaintiffs had been, or would be, in any respect subjected to an injur y requiring redress through an action on their part. And under this state of facts the case of Uhlman v. N. Y Life Ins. Co., 109 N. Y., 421 ; 16 N. Y. State Rep., 371, seems to be in principle a direct authority against the action.

The relief for which the plaintiffs applied by their complaint was, that the defendant, and its officers, should be enjoined and restrained from further purchasing real estate to enlarge or add to the building in which its principal office was situated. But no statement was made in the complaint that any intention existed to purchase or acquire such additional real estate. And in the absence of that allegation there was no reason for invoking the interposition of the court to prevent such a purchase. A further object of the complaint was to enjoin and restrain the defendant from erecting or making the additions proposed to its building and in process of erection. But no case was presented by the facts for this relief. For it appeared by the complaint that the company was already engaged in erecting and putting up the building. And no benefit whatever, either to the plaintiffs or to the company, would result from restraining its progress.

On the contrary it may well be inferred from what has been set forth in the complaint that such a restraint or interference would be not only an injury to the company, but might be to the plaintiffs themselves. A still further object of the action was a requirement that the directors of the company, who were not parties to it, should sell and dispose of the real estate which in this manner had been acquired. But a direction to make that sale and disposition has not been maintained by anything contained in the complaint. It does not appear that it could properly be made in the condition in which the work upon the land had been placed at the time of the commencement of the action. Or that such a sale could be made without detriment or injury to the defendant. Or that any loss, or prejudice whatever would result to the plaintiffs if it should not be made."

Whatever was done in the acquisition of this land and the commencement of the building is reasonably to be inferred to have been done by the officers or trustees of the company. If any misconduct has taken place it has been the misconduct of these

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persons. And the action should have been against them, if it could be maintained at all, for the vindication of any rights which had accrued to the plaintiff and the protection of the corporation itself. They, and they alone, are the wrong doers if a wrong has been perpetrated and the powers of the company have been exceeded. And as wrongdoers the action should have been for their restraint, and not that of the company, which apparently has no more than submitted to what these officers have, and are endeavoring to accomplish. The judgment in the action was right, and it should be affirmed, with costs.

Yak Brunt, P. J., and Brady, X, concur.