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THE GREEN BAG

against the latter. Both parties have ex plicitly denied the truth of these charges. More recently Mr. Hyde and the other beneficiaries under the trust deed created by the late Henry B. Hyde, have instituted a suit for the removal of Mr. Alexander as one of the trustees of the estate. Although the Society is admittedly in a strong and solvent condition, and abun dantly able to discharge all its obligations, charges of financial wrong-doing have been made against some of its officers. The principal of these charges are that excessive salaries have been paid to its officers; that both Mr. Alexander and Mr. Hyde have been interested in underwriting portions of proposed issues of certain securities of the same kind and issue as securities subse quently purchased by the Society from the banking houses which issued them, and that the Society bore the expense of a large public dinner given to Monsieur Cambon, the former French Ambassador, in the names of Senator Depew and Mr. Hyde. The main question raised by the proposed changes in the constitution of the Society relates to the power of the state, or of the board of directors of the corporation under authority delegated by the state (New York Insurance Law §52), to change the method of electing the directors of the Society, so as to vest in the policy-holders the right to nominate a majority of the board. It should be first observed that in the case of the Equitable, or any other purely stock insurance company, the relation of the policy-holders to the corporation is simply that of persons who have entered into con tracts by which the company agrees, on the happening of some future event, to pay to them, or to the beneficiaries named in the policy, certain sums of money. These sums may or may not include dividends from the surplus profits of the corporation.,If the agreement is to pay dividends, the person with whom the company has contracted is known as a "participating policy-holder," and the amount to be paid upon his policy

will depend, to some extent, upon the suc cess with which the company's business is carried on. If, on the other hand, the policy is a "non -participating policy," the agreement is to pay simply a fixed sum of money. In neither case, however, is the policy-holder in any sense a member of the corporation.1 Nor is there any relation of trustee and ccstui que trust between the company and its policy-holders.2 The proposition made by the amended charter is to confer upon this class of per sons, who until the maturity of their pol icies, conditioned upon their continuing to make regular payments of premiums, are not even creditors of the Society, the right of controlling, or at least electing persons who are to control the management of the Society and its business, and to take this right of election away from the members of the corporation, who now — as is cus tomarily the case in all stock companies — are in the possession of and exercise it. It is of course familiar that the charter of a corporation constitutes a contract between the state and the company; 3 between the state and the stock-holders;4 and between the company and the stock-holders.5 Against the right to change the charter as against the dissent of any stock-holder are cited the provision of §10 of Article i of the Federal Constitution forbidding any state to "pass any • • . law impairing the obligation of contracts," and the provision of the Fourteenth Amendment: "Nor shall any state deprive any person of life, liberty, 1 People v. Security Life Ins. Co.. 78 N.Y., I 14, 122.

1 Bewley v. Equitable Life, 61 How. Pr., 344; Pierce v. Equitable Life, 145 Mass., 56; Hunton v. Equitable Life, 45 Fed. Rep., 661; Everson v. Equitable Life, 68 Fed. Rep., 258, affd. 71 Fed. Rep., 570. 1 Dartmouth College v. Woodward, 4 Wheat. Wilmington Railroad Co. v. Reid, 13 Wall., 264.

1 Clearwater v. Meredith, i Wall., 25.