HOLTZOFF, District Judge.
The question presented in this case is whether a person who has borrowed money from a District of Columbia insurance company is eligible to become a member of the board of directors or an officer of the company while the loan is outstanding. The answer depends on the construction of one of the provisions of the Code of the District of Columbia relating to insurance companies.
The facts out of which this question arises are few and undisputed. On April 12th, 1962 plaintiff Acacia Mutual Life Insurance Company made a loan of $288,000, secured by a mortgage on an office building in the District of Columbia, to a number of persons, including the plaintiff Karl W. Corby. The loan was for 21 years. On March 21, 1967, five years later, while the loan was still outstanding but in current condition, the plaintiff Corby was elected a member of the board of directors of Acacia. The question is whether he was eligible to election to that office.
The Superintendent of Insurance of the District of Columbia has indicated that in his opinion plaintiff Corby is not eligible to fill the office of director in the light of the foregoing circumstances and has indicated that he would consider withdrawing necessary annual certificates from Acacia if the situation continues. Acacia takes the position that the statutory prohibition bars a director or an officer from borrowing money from his insurance company, but does not relate to or include situations where a person who has borrowed money from the insurance company later becomes a director or an officer while the loan is still outstanding.
This action was brought by the two plaintiffs against the Superintendent of Insurance for a declaratory judgment and is before the Court at this time on cross-motions for summary judgment. The Corporation Counsel, who represents the defendant, with commendable candor, concedes that there is a justiciable controversy in view of the possible sanctions that may be applied to the insurance company and the serious consequences that may result from them.
The answer to the question or the solution of the problem here presented depends on the construction of the applicable statute, which is found in D.C. Code, Title 35, Section 530. It reads as follows:
"No director or officer of any company doing business in the District shall receive any money or valuable thing for negotiating, procuring, recommending, or aiding in any purchase by or sale to such company of any property, or any loan from such company, nor be pecuniarily interested, either as principal, coprincipal, agent, or beneficiary, in any such purchase, sale, or loan, nor shall the financial obligation of any such director or officer be guaranteed by such company in any capacity: Provided, That nothing herein contained shall prevent any such director or officer from receiving a fee for appraising property for said company or for serving on any committee that passes on the investments of said company: Provided further, That nothing herein contained shall prevent a life insurance company from making a loan upon a policy held therein by a director not in excess of the net value thereof. Any person violating any provision of this section shall be guilty of a misdemeanor."