Opinion of the Court.

There seems to be no limit to the expansion of the "contributed capital" of the company, nor is it stipulated in the by-laws or charter of the company what rate of interest shall be paid on such contributions. As we understand, the interest on scrip given for dividends of profits is limited by the by-laws to not exceeding six per cent per annum, but no such limitation is fixed upon contributions to capital. It seems, also, that the company treats this indebtedness of the company as stock, for it is shown by said exhibit that the "total amount of the company's stock owned by the directors, at par value, (is) $67,902.50." The directors are holders, to that amount, of the interest-bearing receipts for premiums on policies of insurance "not yet issued," as may be fairly inferred. If it should be contended that this interest-bearing "capital" can be paid off by the accumulations of profit, (scrip,) it can not, as we have seen, be reduced below $200,000. Thus it will be seen, that as a mutual company the relator must remain burdened with the payment of interest upon this large sum of money, and which may be increased practically without limit. The persons making these contributions or advances are not required to be or become members of the corporation, bearing its burdens in common with its policyholders. Before the policyholders can participate in the earnings of the company, the contributors must receive their interest, which, as we have seen, is to be paid before the profits are ascertained or declared, and which are a fixed charge on the revenues of the company. The policyholder, in addition to the cost of carrying his risk upon the ordinary mutual plan, as contemplated in the organization of mutual insurance companies in this State, must pay such interest.

The conclusion seems irresistible, that, whatever else this corporation may be, it can not be said to be a corporation for insurance, organized and doing business on the mutual plan, as known and contemplated by the laws of this State, or having any resemblance thereto. By the laws of this State, there

Opinion of the Court.

is, in any event, contemplated the union of at least one hundred policyholders, and if the company is organized in or has an established agency in Chicago, not less than four hundred policyholders, in each mutual insurance company organized thereunder. The premiums, as we have seen in the former case, upon actual and bona fide applications for insurance in the company, must amount to $50,000, and in the latter, to $200,000, twenty per cent of which must be paid in, in cash, and the residue, in either case, represented by notes of solvent parties who are actual and bona fide applicants for insurance to an amount equaling the premiums represented by the cash paid in, and notes given to the company. The fund thus formed represents the capital of the company. The makers of these notes, representing the insurance under the policies of the company issued therefor, are members of the corporation, and mutually liable, to the amount represented by their notes, for the contracts and liabilities of the company. The aggregate of the policyholders are therefore, in a sense, the insurers of each policyholder. When a company thus organized begins business, it has a capital of $10,000 cash, paid in, and $40,000 in obligations of solvent members of the company, in one case, and $40,000 cash, paid in, and $160,000 in notes of solvent policyholders, or applicants for the same, in the other. Its capital is represented by actual insurance. It is free from debt, incapable of contracting liabilities such as that assumed by relator or any other, except in the legitimate business for which it is organized, and may, at any time, realize upon its unpaid capital. The premiums must be applied to the payment of legitimate expenses and losses, or accumulation of capital.

It is clearly apparent the relator company has not complied "with the requirements of the general insurance laws of this State governing fire *** insurance companies," nor is it "possessed of the amount of actual capital required of similar companies formed under the provisions" of the insurance

Opinion of the Court.

laws of this State. It is manifest that no domestic company organized upon the plan and basis of the relator company could be permitted to do business under the laws of this State. The policy of the State toward insurance companies organized under the laws of other States is neither narrow nor illiberal. They are placed upon the same footing and granted the same rights and privileges accorded those formed by citizens of the State, under its laws. The statutes of the State provide for the organization of companies upon each of the leading and recognized plans of insurance, and providing only such safeguards as in the legislative wisdom are necessary to promote the best interests of the company itself, and furnish adequate guaranties of safety and indemnity to policyholders. That this is clearly within the power and control of the legislature, as here exercised, is so manifest that no citation of authority is needful to sustain the position.

Where we hold, as we do, that before relator company is entitled to a license to do business in this State, it must, in respect of its organization and the security and indemnity it offers its policyholders, have complied with the general laws of the State, we are applying the same rule that would, of necessity, be applied to domestic corporations for like purposes. If the rule thus applied results in denying relator company the license it desires, it is because it has failed to comply with the law, and has, by its organization, mode of acquiring its capital, and failure to provide the capital required by laws of this State for a like company organized here, put itself outside of the domain of legitimate insurance companies, as recognized by the laws of this State.

We are of opinion that the application of the relator company for license to do business in this State was properly refused by the Auditor. The demurrer to the petition will therefore be sustained, and the petition dismissed.

Writ denied.

Syllabus.

THE PEOPLE ex rel. Leonidas Walker

v.

THE LOUISVILLE AND NASHVILLE RAILROAD COMPANY.

Filed at Mt. Vernon January 25, 1887.

1. RAILROADS-general power to make contracts. While it is true that railway corporations can only make such contracts as the legislature may authorize, yet when made within their powers, their contracts, in legal effect, are the same as like contracts made by natural persons under similar circumstances.

2.

SAME-consolidated companies to what rights, duties and obligations of the original companies they succeed. Where two railway companies consolidate, the original companies become extinct, and the new company thus formed succeeds to the ownership of the two roads, together with all other property, effects, rights and franchises held or enjoyed by either of the old companies, and also becomes subject to all the liabilities and burdens of such old companies, and each of them, which are imposed by law on such old companies.

3. So where a railroad company accepts a subscription or donation from a county upon certain conditions imposed by the vote of the people, and by its contract with the county board, made in pursuance of law, and afterwards consolidates with other railway companies under articles requiring the new company to perform such conditions, such original company, and each of the new companies, which, by means of the consolidation, succeed to the ownership of the original road, will thereby become bound to perform all the conditions so imposed by the contract with the county and by the vote of the people.

4. SAME of a contract to furnish passenger facilities at a particular point-obligation of consolidated company. Where a railway company, under a legal obligation to maintain a depot for passengers and freight within the limits of a town, and to stop all its passenger trains at such depot, whether express or otherwise, for the purpose of letting off and taking on passengers, consolidates with another railway company owing no such duty, the new company thereby formed becomes liable, and bound to assume and discharge such duty.

5.

SAME-contract by railroad company, whether a covenant running with the land—obligation resting upon purchasers. A contract of a railway company to perform certain conditions with a county making a subscription or donation in its aid in consideration thereof, is, however, merely a personal undertaking, and is not in the nature of a covenant running with land; and a purchaser of such company's road and property is under no personal obligation to perform such contract.

Brief for the Petitioner.

6. So a railway corporation which succeeds to the ownership of the property and franchises of another company by purchase under a decree of foreclosure against it and its lessee, will owe the county no duty not imposed by law, and will take the road and its property absolutely discharged from the contract between the county and the original railway company, as well as the conditions imposed by the vote of the people.

7. SAME of the right of a company to withhold proper facilities, or to abandon part of its road. A railway company is bound to construct its road to and from the several points named in its charter, and, when built, to run its trains over its entire line, in such a manner as to afford reasonable facilities for the prompt and efficient transaction of such legitimate business as may be offered to it on any and every part of its road; and this obligation is equally binding on its successors. No part of the road can be abandoned without rendering its franchises liable to forfeiture.

8. SAME-change of terminal points, or location of depot. After having once fixed the terminal points of its road, and located its depot in a town or city, a railway company has no power afterward ta change the same without legislative authority, but it will be held to

election.

9. SAME-duty to stop all passenger trains at county seat. Where a railroad is built to a town, as required by is charter, and a depot is established at the end of its line within such town, which is a county seat, the company operating such road will have no discretion as to which of its passenger trains shall stop there and which shall not, as it would have, within certain reasonable limitations, if such town was not a county seat, but all its passenger trains must stop at such place. It is not sufficient that all its trains may stop at a new depot located at a junction with another road, a quarter of a mile beyond the corporate limits of such town.

This is a petition filed in this court by the People, on the relation of the State's attorney of Hamilton county, against the Louisville and Nashville Railroad Company, for a mandamus, to compel such company to run all its passenger trains to the town of McLeansboro, and to stop there for the receiving and discharging of passengers. The facts of the case are sufficiently stated in the opinion of the court.

Mr. WILLIAM HAMILL, Mr. T. M. ECKLEY, and Mr. LEONIDAS WALKER, for the petitioner:

As the charter of the St. Louis road calls for a line running to McLeansboro, and the charter of the Evansville road calls for a line running from McLeansboro, the consolidated

4-120 ILL.