Opinion
Argued February 25, 1953
Decided April 23, 1953
Appeal from the Supreme Court, Appellate Division, First Department, GREENBERG, J.
Osmond K. Fraenkel and Arthur Kinoy for appellant. Milton H. Friedman, Thomas Russell Jones and Robert Silk for interveners-appellants. Paul W. Williams, Special Counsel ( James B. Henry, Jr., of counsel), for petitioner-respondent.
As we read section 511 (e) of the Insurance Law, the term "hazardous", contrary to the assertion of the Superintendent of Insurance, encompasses only dangers financial in nature. In our view, however, the record supports the conclusion that further operation of the I.W.O. would prove "hazardous" in a financial sense.
Be that as it may, though, there can be no question that the I.W.O.'s continued course of political action, involving as it did financing Communist Party organizers and publications, disseminating Party literature, and supporting Communist policies and candidates for public office, violates the I.W.O. charter as well as laws of this state and, therefore, permits liquidation under section 511 (f). These activities, carried on for almost two decades with the active support of the membership, were unauthorized by the Order's charter and, perhaps, even contravened its express provisions. Indeed, its failure to include a true and complete statement of its "purposes", as well as "the mode and manner in which its corporate powers are * * * exercised", offends against the demands of paragraphs (c) and (d) of subdivision 3 of section 463 of the Insurance Law. Moreover, as noted, its political activities involve, in the language of section 671 of the Penal Law, a use of "money or property * * * for, or in aid of, any corporation * * * or other association organized or maintained for political purposes, or for * * * any candidate for political office * * * or for any political purpose whatever," and, as a consequence, violate that provision as well. So dominant was the I.W.O.'s allegiance to its unlawful purpose that, in reality, the Order "wasted and perverted the privileges conferred by [its] charter, abused its powers, and * * * substituted [illegal action] for the conduct which the State had a right to expect and require." ( People v. North Riv. Sugar Refining Co., 121 N.Y. 582, 623.) The abuses noted undoubtedly warranted liquidation of the I.W.O. under applicable provisions of the Insurance Law.
As for the contention advanced by appellants-interveners, the International Workers Order Policyholders Protective Committee, that liquidation would cause undue hardship to the many members who cannot otherwise secure insurance protection, it is sufficient to note that counsel for the Insurance Department, authorized to do so by the Superintendent of Insurance, gave assurance upon the argument before us that arrangements have been made for the reinsurance of "all [I.W.O.] policyholders", that there are "companies prepared to issue insurance on the same basis as those insured now enjoy" and that "every member of the I.W.O. will be insured on substantially the same contract" as he now has.
The order of the Appellate Division should be affirmed, with costs.
LEWIS, CONWAY, DESMOND, DYE, FULD and FROESSEL, JJ., concur; LOUGHRAN, Ch. J., deceased.
Order affirmed.