National Mutual Fire Insurance Co. v. Yeomans

8 R.I. 25

• Court: Supreme Court of Rhode Island
• Decided: March 6, 1864
• Status: Published

Opinion

Ames, O. J.

Tbe main questions raised by tbis record are questions of evidence, merely. To say, in a suit by a mutual insurance company against one of its members, tbe company being a corporation de facto, at least, whose corporate existence is acknowledged by tbe action and contract of tbe defendant, and wbicb is permitted to act as a corporation by tbe legislature whose charter it affects to wield, that tbe due organization and right of tbe company to act under its charter, is, in tbe absence of proof to tbe contrary, to be presumed, is far within tbe line both of principle and precedent; and tbe only question bas been, whether tbe defendant is not estopped to deny it, thus incidentally, for tbe purpose of avoiding an obligation into wbicb be bas deliberately entered, and upon tbe faith of wbicb others have become co-insurer and co-insured with him. If, upon such a ground, be could avoid payment of bis assessments, — tbe fund to wbicb those members who have sustained losses by fire must look for their indemnity, — it would be very much like permitting him to practise a fraud upon them. It would be very difficult to contravene, upon principle, tbe decision of tbe Supreme Court of Massachusetts, in Appleton Mutual Fire Insurance Co. v. Jesser, 5 Allen, 446, that tbe lawfulness of tbe organization of a corporation de facto, for mutual insurance, cannot be impeached, collaterally, in an action to recover an assessment. At least, tbe learned judge, who tried tbis case below, did not err in bolding, that, in tbe absence of proof to tbe contrary, it was to be presumed, that tbe plaintiffs bad done all those things- under their charter, wbicb were required to enable them to act as a corporation for mutual insurance, and that tbe fact that tbe minute book of tbe corporate proceedings did not affirmatively show that these requisites bad been complied with, did not con trol this presumption. The fact that this book did not contain evidence that, before the issuing of any policy, the sum of $1,000,000 had been subscribed to be insured, did not even tend to prove that such subscription had not been made. It is not the place in which we should expect to find such a subscription and was properly excluded as proving by what was not in it, that no such subscription had been made. The subscription probably preceded the organization, as the basis upon which the corporation was entitled to insure.

Another exception presented to us is, that the judge who tried this cause did not, though requested, instruct the jury, that, because, of four policies issued by the plaintiffs during the period in which the defendant effected his policies with them, two bore endorsed a written agreement signed by the secretary of the company, and two signed by the brokers who procured them, that the holders of those policies were not to be liable to assessment, the assessments upon the defendant’s policies were void. When the bill of exceptions finds that these agreements were wholly unauthorized by the board of directors and were repudiated by them; that the policy holders were assessed, notwithstanding the agreements, and paid their assessments, as others, and that the assessments sought of the defendant were not all affected in amount by this irregular conduct on the part * of the secretary and of the brokers, it would be difficult to find a reason why the agreements should release the defendant from an obligation expressly assumed by him, unless upon the logic that a wrong attempted and repented of by one, sanctions a similar wrong persisted in by another.

The remaining exceptions turn upon the 23d article of the by-laws of this mutual insurance company, which is alleged to be illegal and oppressive, and, as construed in praotice, unequal and unjust. Whatever may be the merits of ten per cent, per month upon unpaid assessments, as a means of inducing their prompt payment, the 8th section of the charter, * which gives to the company an action to recover them, if they shall remain unpaid thirty days after demand, prescribes, as we read it, that their amount is to be recovered in such action, — which, of course, includes simple interest. The by-law, cannot, in this particular, add to the rule of damages thus fixed by the charter; and we shall do entire justice to both parties, by allowing the verdict to stand, on condition that the plaintiffs release, upon the record, the excess of the verdict over the proper amount of the same, thus ascertained. This will take away from the defendant all canse of complaint, since it will place him upon the footing of those most favored by the company in the exercise of the discretion that they seem to have assumed,_ as to the enforcement of the penalty of this by-law. Upon tbe above release, let judgment below be affirmed, and tbe clerk issue execution for the balance thereof, with costs.

* Sbc. 8. If any member of said corporation, or the legal representatives of any member, shall neglect or refuse to pay the amount which may be assessed upon Ms or their policy or policies of insurance, for the space of tMrty days after demand shall have been made for payment of tbe same, in tbe manner tbe said corporation shall appoint, he or they shall be liable to tbe suit of tbe corporation therefor, in an action of the case in any court of competent jurisdiction; and the said corporation, having obtained judgment and execution for the amount, may, at their election, cause said execution to be levied upon the estate or property, .whereon, by this act, they may have a lien for the same; and the officer having said execution, shall proceed to satisfy the same by the sale and conveyance of said estate or property, in the same manner as is provided by law in case of attachment of similar property or estate, on mense process or execution; and the owner or owners thereof, shall have the right of redeeming the same within one year, by paying to the purchaser or purchasers thereof, the amount of said execution and costs, with interest on the same at the rate of twelve per cent.