(dissenting):
1 cannot agree in the prevailing opinion with my associates.
The charter and the policy form one contract, and resort must be had to both in order to ascertain what the contract of the policy really is. The charter (Art. 6) provides that the officers of the corporation shall cause a balance to be struck of the affairs of the corporation, which shall exhibit its assets and liabilities, both present-an d contingent, “ and also the net surplus after deducting a sufficient amount to cover all outstanding risks and other obligations. Each policyholder shall be credited with an equitable share .of the said surplus. Such equitable share, after being ascertained, shall be applied,” etc.
It will be observed that three things are recognized in this article,, viz., a “ net surplus,” “ an equitable share of the said surplus,” and the application of such “ equitable share after being ascertained.” The act of 1872 (Chap. 100) provided that the corporation might ascertain “ the proportion of surplus accruing to each policy,. * * * to distribute the proportion found to be equitable.” This-seems to contemplate something more than a mere mathematical calculation of the proportion of the surplus to be devoted to the-policies upon which it is to be applied, and to authorize the directors .of the society to decide how the net surplus is to be distributed,, how much is to be applied to policyholders, and how much is to be-reserved for the contingencies of insurance..
This is borne out by the language of the policy, which was issued subsequently to the act of 1872, when it says that the policy in question “ shall be entitled to participate in the distribution of the surplus of this society by way of increase to the amount insured,, according to such principles and methods as may from time to time *192be adopted by this society for such distribution, which principles and methods 'are hereby ratified and accepted by and for every person who shall have or claim any interest under, this contract.”
In general, only the directors of any corporation have the power to decide what amount or share of its earnings is to be applied in •dividends, and ! can see no different principle which limits the .authority of the directors of this society to decide what part of the net surplus is to be distributed to the policyholders at any particular period.
What necessity for ratification and acceptance of principles and methods of distribution would exist if only a mathematical division •of the entire surplus was intended % Indeed, the policy itself says that the holder shall participate in the “ distribution of the surplus,” mot in the surplus itself, and it was to this distribution and the prin■ciples and methods thereof that the polic refers as ratified and .accepted.
It is conceded in the prevailing opinion that the directors have a large discretion in determining the, amount of the surplus, and that they may largely increase the reserve and contingent funds. I eanmot see any greater exercise of discretion in doing this than in distributing only a part of the surplus to the policyholders and reserving the balance for the. protection of the policyholders, or that any •different result would be attained if, instead of calling the $43,000^000 .a surplus, it had been called contingent reserve.
The provisions of the charter, the policy and the law. of 1812, all Iseein to intend that the directors should have power to decide what part of the surplus should be distributed,, and ■ how it should’be •distributed to policyholders at stated periods. To hold otherwise would be to destroy the discretion conferred- upon the officers in •deciding what part of the surplus is necessary to . protect all policyiolders, present and future. I cannot believe that the policy of the law or a fair interpretation of the contract has any such result, ,and .1 think the interlocutory judgment should be affirmed.
Interlocutory judgment reversed and. judgment directed for plain- ■ tiff on demurrer, with costs, with leave to the defendant to withdraw demurrer and serve answer within twenty days, on payment ' of the costs of the dermirrér and of this appeal.