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About 1852 some proceedings were taken against the Co. by a Mr. Van Sandau, a policy-holder, with a view to compel the Directors to distribute amongst the parti. policyholders a larger proportion of the profits of the Co. than they (the Directors) had thought it expedient to do. The proceedings (known as Van Sandau v. Gurney) never came to any issue; but the Directors appear to have taken the subject into consideration, with a view to some modification of the provisions of the deed.
By special resolution of a General Court, held 7th May, 1856, an alteration was made in the method of distributing the profits of the Life branch. Four-fifths were appropriated to parti. policies. The remaining fifth to the shareholders.
In 1865 the Co. took over the Fire businesses of the following offices:-1. District Fire (Birmingham); 2. Hants. Sussex and Dorset (Gosport); 3. Sheffield Fire. These were simple trans.; the Alliance having purchased the goodwill in each case.
At the close of 1868 the Co. had Life ins. contracts in force amounting to £3,173,983; and its Life reserved fund was £943,000-exclusive of paid-up cap. of £550,000. The Fire fund stood at about £200,000, making total funds £1,600,000 invested, and yielding int. at an average rate exceeding 4 p.c. The general features of the Co. are liberal. Its management sound and economic. Expenses of management less than 8 p.c. on Life income, and only I p.c. of Life reserve fund.
A remarkable circumstance occurred several years since in this Co. A German nobleman, who had been ins. in the office for a considerable sum, but for a few years only, died, and by his will directed his executors to give a discharge to the Co. on receiving a return of the prems. he had paid and 3 p.c. int. added. The Directors of the Co. were naturally surprised, but complied with the directions of the will; indeed, they could hardly have obtained a proper discharge for any larger sum. The motives for such a unique determination afford play for the imagination. The same life was ins. in the London Life and Metropolitan, the policies were of longer date, but the same directions applied also to them. From every point of view the Alliance F. and L. must be considered one of the most solid ins. inst. we have in this country.
ALLIANCE FIRE AND LIFE AND MARINE INS. Co. (IRELAND).-This Co. was founded in Dublin in 1825, and carried on bus. until it had lost all its cap. and about £20,000 in add., when it closed its doors, about the year 1836. It paid for Marine policy stamps in the year just named £364 4s. 3d, which was small. The amount of its Fire duty we cannot ascertain, as at the period the duties of the Irish F. offices were all lumped in one sum. Its policies are said to have been trans. to North of Ireland, but we do not find a Co. bearing such a title.
ALLIANCE MARINE ASSU. Co., founded in Lond. in 1825, with an authorized cap. of £5,000,000, in 50,000 shares of £100. The directors were to be at liberty to lay out any portion of the profits in purchasing shares of the Co. for the benefit of the shareholders, or in augmenting the deposited cap. of the Co. until the whole £5,000,000 be paid up (cap. since reduced, 1840).
The existence of this Co. is due to circumstances which we have already explained under hist. of Alliance, etc., F. and L.; and the original prosp. of this Co. contained the following:
Pursuant to an original understanding and arrangement, the board of direction will have full power to adopt the Marine bus. heretofore transacted by the Alliance, etc., Life and Fire Assu. Co.; and also that transacted by Mr. N. M. Rothschild for the account and on the responsibility of the Co. The bus. of the Co. will consist in the assu. of British and foreign property against all usual Marine risks, and in lending money upon bottomry and respondentia.
The D. of Sett. of the Co., after giving power to the Board to grant ins., etc., on such terms and regulations as the Board should think fit, imposed this limitation (clause 51):
Save that no assu. of ships, or goods and merchandises at sea shall at any time hereafter be effected by any country or foreign agent of the Co., or by any committee or board estab. abroad or in any provincial city or town in Gt. Brit. or Ireland, nor in any other place nor in any other manner than at the head office of the Co.
This clause was modified in 1850, and the Directors were allowed agencies "under such limitations and restrictions as they might think necessary."
Clause 70 provided that portions of the profits should from time to time be applied to paying up the uncalled cap. of the Co. until the whole £5,000,000 of cap. became paid up. Clause 71 gave the directors power to buy up the shares of the Co.
A special Act of Parl. was obtained in 1825, 6 Geo. IV. c. ccii., "An Act for enabling the Alliance Marine Assu. Co. to sue and be sued in the name of the Chairman for the time being, or of any other member of the Co." The act obtained the Royal Assent the 6th July, 1825. The D. of Sett. of the Co. was set forth in extenso in a schedule to the Act, and was declared by sec. 4 of the Act to be irrevocable. Any member might sue the Chairman for money due from Co., and the Chairman might sue other members for their proportions. The Co. was not to be incorp, by the Act.
In 1834 the Co. obtained another special Act, 4 & 5 Wm. IV. c. xxxiv., "An Act to repeal an Act passed in the 6th year of the reign of his late Majesty King Geo. IV., intituled, etc., and for granting certain powers to the said Co. instead thereof. This Act recited : And whereas certain of the enactments and provisions of the said recital act have been found
defective and inconvenient, and it is expedient the said recital act should be repealed, and more effectual powers and provisions granted and enacted for the regulation of the said Co. instead thereof.
The D. of Sett. was not this time made any part of the Act, and it could therefore be altered from time to time as might seem expedient without reference to Parl. There was nothing other than the ordinary clauses in this new Act.
In 1840 the cap. of the Co. was reduced to £1,000,000, in 10,000 shares of £100; £25 per share being paid up. That is, each proprietor had I new share for each 5 former shares. This was a very prudent step. The new shares were for a time called "Consolidated shares."
ALLIN, GEORGE.-Manager of London and Westminster Plate-Glass; was formerly district man, for Brit. Empire Mut. at St. Alban's, for which Co. he transacted a considerable bus. retired in 1867, and for a short period represented the Gresham as agency superintendent. ALLISION, the running of one vessel against another.
ALLOCATION OF PROFITS.-The distributing rateably, and placing to the credit of the various policy-holders of the parti. class the proportion of profits to which they are severally entitled. In law the word has several significations.
ALLOPATHY.-A term recently invented to describe the ordinary system of medical practice in opposition to Homœopathy.
ALL OTHER PERILS, LOSSES, AND MISFORTUNES.-The policy of Marine Ins. generally in use in Gt. Brit., after enumerating the particular risk insured against, contains these words, "and of all other perils, losses, and misfortunes that have or shall come to the hurt, detriment, or damage of the said goods and merchandises, and ship, etc., or any part thereof."
The terms of this clause are so comprehensive that they might be supposed to embrace every species of mishap not already particularized to which property at sea can be subjected. This, however, is not the case. The foundation of marine ins., as already stated, must be accident; and the "perils, losses, and misfortunes," above referred to, only include such as arise from similar causes, and are of like kind with those previously mentioned. It has been held that this general indemnification includes the risk of loss by land-carriage, when specified in the policy; damage to a ship heeled over by the wind in a graving dock; loss of dollars jettisoned from a vessel in imminent danger of capture, to prevent their falling into the hands of the adversary; loss by one British ship firing upon and sinking another on the supposition that she was an enemy's vessel, etc. But while the clause is efficacious to cover these and parallel instances of loss, it will not extend to the admission of casualties, which are excluded from the contract by the memorandum at the foot of the pol., only the general limitations of the underwriter's liability prescribed by law and custom.-Hopkins; Arnould; McArthur. ALL-WORLD POLICIES.-See WHOLE-WORLD POLICIES.
ALLOTMENT INS.-A new species of ins. arose out of the mania for allotments in various enterprises during the South Sea period in 1720, which, for the want of any better title, we designate Allotment Ins. Its application may be seen from the following advertisement in Daily Courant, 6th June, 1720:
Whereas a subs. has been privately taken on a roll of parchment by gentlemen concerned in the cotton manufacture of Lancashire for £2,000,000 for the making of English callicoes. This is to give notice, that printed sealed tickets of assurance of subscription will be delivered to the gentlemen subs. this day at to a.m., at the Ship Tavern, behind the Royal Exchange in Threadneedle St.-N.B. No tickets will be delivered to any but the subs. in person.
The subs. being so assured would become a property capable of being dealt with. This seems to have been the idea.
ALLOTMENT, LETTER OF. See LETTER OF ALLOTMENT.
ALLOTTEE, a person to whom land under an Inclosure Act, or shares in a public undertaking, are allotted.
ALLOWANCE, a deduction, an average payment, a portion. In commerce this word bears several technical meanings, a knowledge of which may be very essential in the adjustment of losses under Marine ins. policies.
ALLY. A power in alliance with us.
ALMA LIFE INS. Co.-A scheme projected in 1854 very soon after the famous battle of the Alma. The battle was a fact, and a brilliant one. The Co. was but a name. Its connexions merged into the Clarence.
ALPHABET LETTERS.-A scheme of ins. under the title of "Alphabet Letters" was instituted in Lond. in 1711, with a view to evade the Gambling Act of the preceding year. We shall give some account of these schemes under head of GAMBLING INS.
ALPHA REVERSIONARY INVESTMENT SO. LIM. projected in 1871, with an authorized cap. of £100,000, in 10,000 shares of 10. The objects of the asso. are the purchasing of reversions, life ins. policies, and for granting loans thereon. Mr. Wm. Young, M.A., is the promoter of the Co. The scheme has some good features.
ALPHA UNITED Life Investment Co. -This Co. was projected in 1845, but it never got beyond the stage of prov. regis.
ALTERATION IN ARTICLES OF ASSOCIATION.-Every co. regis. under the Cos. Act, 1862, may by "special resolution" of a general meeting alter its regulations as contained in its
art. of asso.; but it cannot thereby enlarge the scope of its bus. beyond the objects in the orig. memorandum of asso.
ALTERATION IN NAME OF Co.-Any co. regis. under Cos. Act, 1862, may, with the sanction of a "special resolution" of the co., and with the approval of the Board of Trade, alter or change the name of the co. ALTERATION OF POLICY, VOYAGE, OR RISK.-Whenever it may be requisite to make any alteration, erasement, addition, or interlineation in a policy after it has been underwritten, it ought to be done with caution and accuracy, and a mutually clear understanding between the parties. For otherwise, if it varies at all from the insured's order, or the insurer's entry, disagreements of moment may arise, and be sometimes troublesome to adjust; yet such alterations are very often made by brokers in a manner so very loose and hasty, and with so little attention of the underwriters, that the nature of the risk originally described in the policy, is sometimes, by the introduction or erasement of a single word, or monosyllable only (without any alteration of the prem.), rendered entirely different from what is understood, or perceived by the underwriters, till the subsequent effect of it in some unfavourable event opens their eyes.-Weskett, 1781. The same may be said at the present time, although nearly a century of litigation has since passed. ALTERATIONS IN STRUCTURE OR USE OF BUILDINGS (F. INS.).—The subject of alterations, after the date of the policy, in the structure or use of the buildings, either as regards the trades carried on, or the goods deposited in them, has been of all others the most fruitful of disputes between the assurers and the assured. In the decided cases the question has generally turned upon the construction of the conditions, and the F. offices, tutored by experience, certainly endeavour to guard themselves in every possible manner against unanticipated hazards. In spite, however, of the ingenuity of their advisers, cases must occasionally arise to which no condition is applicable, and the question remains for solution, how far an alteration, not expressly forbidden, affects the contract.-Bunyon, Law of Fire Ins.
Managers, surveyors, agents, and assessors of F. offices, all require to bring their attention to bear very closely upon this subject.
It may be useful to give a brief digest of several decisions before the U.S. Courts on points coming under this head :
In the case of Curry v. Commonwealth Ins. Co., tried in 1830, it was held that an alteration or enlargement of a building will not avoid the pol. unless the risk be thereby increased-which must be determined by the jury. In the case of Jones Manufacturing Co. v. Manufacturers Mut. Ins. Co., tried in 1851, where there had been an alteration of the stove and smoke pipe, the Judge instructed the jury that if the alteration increased the risk, the pol. would be void. On appeal it was held that this instruction was correct. In the case of Padleford v. Providence Mut. Ins. Co., tried in 1855, where under a provision in the charter of the Co. against “alterations by the act of the proprietor without add. prem.," etc., it was held that an alteration made by a tenant without the consent or authority of the proprietor, would not avoid the policy; and it was a question for the jury to determine how far the proprietor had authorized the alteration made by the tenant.-Digest of Fire Ins. Decisions, 2nd ed. INCREASE OF RISK.] [WARRANTY.]
ALTRINCHAM CATTLE PLAGUE INS. ASSO. was founded at Nutsford, in Cheshire, in 1865, the liability of the members being limited by guarantee.
AMADOR, M. RISUENO D', a French writer, who in 1837 pub. a memoir, in which he endeavoured to apply the doctrine of prob. to measure the law of disease. Violent discussions took place upon the subject at that period; whether it has since made any progress we cannot learn.
AMALFITAN [AMALPHITAN] CODE OR TABLE.-A collection of Sea Laws compiled about A.D. 1063. It consists of the laws on maritime subjects, which were or had been in force in countries bordering on the Mediterranean; and probably on account of their being collected into one regular system, it was for a long time received as authority in those countries.
Anderson says that the city of Amalfi was about the year 1020 so famous for its merchants and ships, that the Caliph of Egypt granted its inhabitants a safe conduct to enable them to trade freely in his dominions. They also obtained other distinguished privileges. The city itself is said to have been founded by a party of Roman emigrants about the year A.D. 350. Hardly a trace of its former greatness now remains.
Their new code appears to have superseded in a great measure the ancient Rhodian Law. Its authority was acknowledged by all the states of Italy during several centuries. The High Court of Admiralty of Amalfi even obtained authority and sanction as a tribunal of nations. This code was ultimately itself superseded by the CONSOLATO DEL MARE. [MARINE INS.] AMALGAMATE. To mix or incorporate.-Richardson. To mix so as to make a compound.-Webster. To form a union, combine with something different.-Smart.
V.C. Wood remarked in the case of the Empire and City and County: "It is difficult to say what the word amalg. means. I have not the least conception of what the full legal effect of the word is. We do not find it in any law dictionary, or expounded by any competent authority; it seems to be a process of annihilation or extinction, rather than anything else." This is the dictum of a very learned and clear-sighted man, but requires to be qualified to this extent, that none but amalg. producing disastrous consequences, or illegally or defectively carried out, were likely to come before him.
We venture to submit this definition: To amalg. is to fuse the interests of two or more bodies theretofore distinct and separate, so as that they, by the process, become one. AMALGAMATION: Act of amalgamating; state of being amalgamated.-Worcester. The union of the businesses of two or more ins. cos.-Ins. Agent. A remedy when the supply of offices exceeds the demand.-Hand-Book of Assu.
All ins. asso. that are not strictly mut. in their constitution are necessarily composed of two classes of persons-1. Shareholders; 2. Policy-holders. A complete amalg. of two or more offices, other than mut., must therefore comprehend a fusion of the interests of each of these classes, with the interests of the same class in each of the asso. forming the subject of amalg. Very few of such cases have occurred; very few could possibly arise.
Certainly two or more purely mut. asso. may perfect an amalg. to the extent that from a given day each and every member of the two or more asso. should have equal rights, benefits, and advantages, from one common fund, provided by the amalg. asso. But even to carry out such an arrangement, on an equitable basis, each of the amalg. asso. must contribute its just proportion to such common fund, as determined by a valuation of all the ins. contracts of each; and the rates of prem. to be paid from the date of amalg. must be equal (unless any difference shall have been taken into account in valuing the contribution to the general fund), and the conditions of the policies uniform. We venture to think but few such cases have arisen in practice.
But an amalg. may be either partial or complete. A complete amalg, may arise under the conditions we have named in mut. asso. It would be possible also for two or more proprietary offices to be so circumstanced as to justify the term amalg. to be applied to their union. But the chances are much further removed by the fact that the share and policy-holders must each, and in each co., have their rights and interests equitably adjusted and provided for. Wherever and whenever the interest of both share and policyholders are not regarded, the amalg, is only partial.
Partial amalg. may be said to be the rule-complete ones the exception. It almost always happens that one set of shareholders are either bought out, or left out of the arrangement. If a Life Co. falls into difficulties, the shareholders, as a rule, know and feel that the sacrifice must be with them; the policy-holders must be provided for at the expense of that sacrifice. It may even be that the interests of the shareholders, who seem to be the victims, may not have been disregarded in the arrangement. The sacrifice of past payments for the avoidance of future ones may have embodied the quid pro quo; and the arrangement may be equitable and desirable, although it is no longer an amalg. In many cases the interests of the shareholders on one side are bought out by a cash payment. The transaction then assumes the nature or transfer of the ins. contracts from the selling to the purchasing co. It is not strictly an amalg. But if the purchase consideration be paid in shares of the purchasing co., then it may become a complete amalg., because all the interests will be pro rata on the common funds.
Another set of circumstances have next to be regarded, viz., that many ins. asso. have no legal powers in their existing constitutions for any such purpose. Most asso. have
power to purchase a bus, or businesses; very many have no power whatever to sell their own. We shall therefore proceed to a consideration of the legal conditions involved in an amalg, or a transfer of the bus. of an ins. asso.
We have directed our preceding observations mainly to amalg. of Life Asso. There have been very few real amalg. between Marine, Fire, or Accident Ins. Offices. In all cases of yearly or short-term contracts, it is usually a trans. of bus. only, for a consideration paid down or extended over a term of years.
In all cases of amalg. or trans. the question of goodwill enters more or less into account. [GOODWILL.]
The earliest attempts at amalg. were made during the years 1719 and 1720-South-sea period-when several of the projected MARINE Ins. Asso. merged into each other, by way of amalg. their forces in the competition then going on to obtain charters of incorp. There had been something of the same process carried on by the Birth and Marriage Ins. Offices between 1709 and 1712; but these were not asso. at all. They were simply offices opened and kept by individuals at their own risk and for their own advantage.
Some further definition of terms seems to become necessary at this point. An amalg. appears to imply, as we have already said, a union of two or more estab. offices. Projects, before they have assumed tangible shape and form, may "merge" into each other; the weaker ones becoming "absorbed " in the stronger.
By the General Law an amalg. cannot be effected without the aid of Parl. Each co. has its distinct name, its separate cap., and separate creditors, and no act of a majority, however large, can compel à minority, though it consists of only one shareholder, to enter into obligations inconsistent with the separate status of the co. to which it belongs. statute law has of late years been gradually aiming at a modification of this principle.
The Joint Stock Cos. Act, 1857, 20 & 21 Vict. c. 14, which, however, did not apply to Ins. Asso., in sec. 17 recognized the principle of amalg. without making use of the term. The Cos. Act of 1862 extends the principles to all Asso. which shall become regis. under it hence it includes Ins. Asso. The following are the clauses relating to amalg. :
SEC. 161.-Where any co. is proposed to be or is in the course of being wound up altogether volun
tarily, and the whole or a portion of its bus. or property is proposed to be transferred or sold to another co., the liq. of the first-mentioned co. may, with the sanction of a special resolution of the co. by whom they were appointed, conferring either a general authority on the liq., or an authority in respect of any particular arrangement, receive in compensation or part compensation for such transfer or sale shares, policies or other like interests in such other co., for the purpose of distribution amongst the members of the co. being wound up, or may enter into any other arrangement whereby the members of the co. being wound up may, in lieu of receiving cash, shares, policies, or other like interests, or in addition thereto, participate in the profits of or receive any other benefit from the purchasing co.; and any sale made or arrangement entered into by the liq. in pursuance of this sec. shall be binding on the members of the co. being wound up: subject to this proviso, that if any member of the co. being wound up, who has not voted in favour of the special resolution passed by the co. of which he is a member, at either of the meetings held for passing the same, expresses his dissent from any such special resolution in writing addressed to the liq. or one of them, and left at the registered office of the co. not later than seven days after the date of the meeting at which such special resolution was passed, such dissentient member may require the liq. to do one of the following things as the liq. may prefer: that is to say, either to abstain from carrying such resolution into effect, or to purchase the interest held by such dissentient member at a price to be determined in manner hereinafter mentioned, such purchase-money to be paid before the co. is dissolved, and to be raised by the liq. in such manner as may be determined by special resolution: No special resolution shall be deemed invalid for the purposes of this section by reason that it is passed antecedently to or concurrently with any resolution for winding up the co. or for appointing liquidators; but if an order be made within a year for winding up the co. by or subject to the supervision of the court, such resolution shall not be of any validity unless it is sanctioned by the court.
SEC. 162.-The price to be paid for the purchase of the interest of any dissentient member may be determined by agreement, but if the parties dispute about the same, such dispute shall be settled by arbitration, and for the purposes of such arbitration the provisions of the "Cos. Clauses Consolidation Act, 1845," with respect to the settlement of disputes by arbitration, shall be incorp. with this Act; and in the construction of such provisions this Act shall be deemed to be the special Act, and the co. shall mean that which is being wound up; and any appointment by the said incorp. provisions, directed to be made under the hand of the secretary, or any two of the directors, may be made under the hand of the liq., if only one, or of any two or more of the liquidators, if more than one.
It will be seen that these sections only apply to the cos. being liquidated voluntarily. If two cos. therefore desire to amalg., one at least must place itself in voluntary liq.; and if from any cause it afterwards passes into a winding-up under the Court, all that has been done must receive the sanction of the Court, or it will be void. [VOLUNTARY WINDING-UP.]
The clauses, as we have pointed out, only apply to asso. regis. under the Cos. Act, 1862, and as a large majority of ins, asso. are so constituted that they cannot regis. under that Act, except for the purpose of winding-up, the facilities for amalg. are not much extended by its aid, except in the mode we shall proceed to point out. Sec. 180 of the Act defines what cos. may register under it. [LEGISLATION for INS. Asso.]
The method by which an amalg. can be carried out as the law now stands, between two cos. regis., or capable of being regis., under the Cos. Act, 1862, is as follows: Suppose Co. A. and Co. B. are desirous of amalg. ; they register under the Act, and Co. A. passes special resolutions containing not merely a declaration that the Co. is to be wound up, but stating the very arrangements that have been entered into with Co. B. The liq. will then proceed to wind up Co. A. If any member dissents, he must be dealt with under the clauses already quoted; and the arrangements may then be completed--subject to certain special requirements of the Life Assu. Cos. Act, 1870, of which we shall hereafter speak.
In the case here put, Co. B. is supposed to be legally capable of purchasing the property of Co. A., by virtue of the provisions of its own constitution. If that be not the case, a further step is taken. A third co. is formed, having powers to purchase the property of each of the orig. Cos. A. and B. The orig. cos. proceed to pass special resolutions dissolving themselves, and declaring the terms on which their members engage to become members of the new co. ; and as soon as the dissolution of the orig. cos. is completed, their members, as a matter of course, become members of the new co. This process has in several cases been adopted with success.
The question immediately suggests itself: why adopt this indirect method of effecting what might be done directly, by enacting that cos. should be at liberty to amalg. with the sanction of special resolutions of their members? The answer, from a legal point of view, is, that if an alteration in the separate status of a co. were permitted without compelling the co. to dissolve itself, creditors would constantly be defrauded, and members be entrapped into arrangements possibly detrimental to their interests. The Act, by interposing the necessity of a dissolution, provides for the payment of creditors before amalg. can be effected, whilst it enables a shareholder, who dissents from the opinion of the majority, to retire from the co., and to receive the market value of his shares.-Thring.
The author believes that the most successful amalgamations have been those in which the requisite powers have been assumed on both sides, and the arrangements carried out with such completeness that all parties have been bound by acquiescence, the shareholders in the amalg. co. by the acceptance of new shares, or at least dividends, from the purchasing co., and the policy-holders by paying their prems. to the latter, and either accepting new policies, or having their old ones endorsed, with a memorandum of the transfer. -Bunyon.
It will be observed that in describing the legal process of amalg. we have dealt mainly with the position of shareholders. We have next to approach the more extended, and, in the case of ins. asso., the far more important interests of the policy-holders.