Monumental Mutual Life Insurance v. Wilkinson

Schmucker, J., delivered the opinion of the Court. The appeal in this case was taken from two orders of Circuit Court No. 2, of Baltimore City, the first of which appointed receivers of the assets of the defendant corporation and the second refused to rescind their appointment. No appeal lies from the order refusing to rescind the appointment because it is not final in its nature, Hull v. Caughy, 66 Md. 104 , but, as sec. 25 of Art. 5 of the Code, authorizes an appeal from an order appointing receivers, we will consider the propriety of the passage of the order appointing them in the present case. The bill professes to have been filed under the authority conferred by sub-sec. 7 of sec. 122 of Art. 23 of the Code as re-enacted by ch. 388 of the Acts of 1902.

It is unnecessary to here insert that sub-section at length, it is sufficient to say that it embodies three provisions relating to the powers and duties of the Insurance Commissioner relevant to the present ³³ controversy, which, stated in their reverse order, are; (i) The Commissioner is empowered to institute through the Attorney-General or such attorney as he may select, suits and prosecutions for any violation of the provisions of the insurance laws of the State. (2) He is directed to institute appropriate proceedings according to law for the liquidation of the affairs of any insurance company of this State which shall “appear to him upon examination” to be insolvent or fraudulently conducted. (3) He is also directed whenever he has reason to believe that any insurance company is insolvent or fraudulently conducted to make complaint thereof to a Judge of the Circuit Court where the company or its agent is located and it is then made the duty of the Judge to appoint a commission to examine into the company’s affairs and if their report sustains the allegations of the complaint to at once close by injunction the affairs of the company. Other portions of sec. 122 authorize the Commissioner to make examination either in person or by his agents of insurance companies and requffe him "“once at least during his term of office” to thoroughly examine every such company organized under the laws of this State.

The substantial facts which called for the application of the provisions of this law to the present case are as follows : The appellee, the Insurance Commissioner of Maryland, filed the bill in Circuit Court No. 2, of Baltimore City, on October 10th, 1903, through counsel selected by the Attorney-General, alleging that the appellant was a life insurance company incorporated under the general laws of this State for the purpose of insuring lives on the annual, endowment or any other plan .and that it had deposited $100,000 in securities with the State Treasurer according to law in order to entitle it to issue insurance policies, that it had on October 19th, 1900, taken over the insurance business and assets of the Order of the Iron Hall of Baltimore City and had since then been conducting a life insurance business, many of the details of which are mentioned in the bill but need not be noticed here. The Commissioner then alleged in the bill that, having been in ³⁴ formed by his official actuary that the defendant’s liabilities were grossly in excess of its total resources, he felt it to be his duty to make complaint thereof to the Court in accordance with the provisions of sub-sec. 7 of sec. 122 of Art. 23 of the Code. He further averred in the bill that from his own investigation into the affairs of the defendant it appeared that it was conducting business upon an impracticable plan, that it had transcended the powers conferred on it by its charter and that it was insolvent. The prayer of the bill is for the appointment of a commission under sub-sec. 7 of sec. 122 to thoroughly examine the condition of the defendant and, if the charges of insolvency and abuse made in the bill should be sustained by the report of the commissioners, that the defendant’s business might be restrained by injunction and a receiver of its assets appointed and its affairs liquidated and wound up.

A copy of the defendant’s certificate of.incorporation and of its by-laws exhibiting its plan or scheme of operations, and also a copy of the actuary’s report to the Commissioner of the result of his examination into its condition appear among the exhibits filed with the bill. The defendant answered the bill on October 16th, 1903, insisting that it was an assessment company and not an ordinary life