Pink v. A. A. A. Highway Express Inc
| Citation | 13 S.E.2d 337 |
| Decision Date | 16 January 1941 |
| Docket Number | No. 13549.,13549. |
| Parties | PINK, Superintendent of Insurance of New York. v. A. A. A. HIGHWAY EXPRESS, Inc., et al. |
| Court | Supreme Court of Georgia |
PINK, Superintendent of Insurance of New York.
v.
A. A. A. HIGHWAY EXPRESS, Inc., et al.
No. 13549.
Supreme Court of Georgia.
Jan. 16, 1941.
[13 S.E.2d 337]
Rehearing Denied Feb. 14, 1941.
[13 S.E.2d 338]1. Construing the amended petition as a whole most strongly against the pleader, the averment therein that "all the defendants were policy holders and members of the company during the year prior to November 10, 1937, " is held to be an averment that the defendants were members because they were policy holders.
2. When a court of the domicile of an insolvent mutual insurance corporation, having acquired jurisdiction thereof, proceeds according to the applicable statutes to determine the necessity for, and to fix by its decree, the amount of an assessment against those who became members of such corporation in accordance with the laws of the State under which it was organized, whether or not such decree is conclusive as to the necessity for and the amount of such assessment when asserted against policy holders who were non-residents of the domiciliary State, not personally served, and who did not personally appear therein, it is not necessary to decide.
3. Such a decree, as to policy holders who were not made parties to the original proceedings, was not conclusive on the question whether their relation to the corporation was such as to subject them to such liability.
4. If liable at all, the defendants are so only because their contracts constituted them members of the corporation. Whether or not these made them personally liable for the assessments will be determined by the law of this State when such liability is asserted against them in the courts of this State, in the absence of any showing that the contracts were entered into in some other State or were to be performed in some other State, and the law of such other State, if any, governing contracts of this character not being set forth.
5. Applying the law as found in our statutes and as expounded by our courts and in harmony with the principles of general law not in conflict therewith, it must be held that the mere acceptance of a policy of indemnity insurance issued for a stated premium, by a company that bears the name "mutual, " but is not shown to have a lodge system with ritualistic form of work and representative form of government, with a statement in the policy that by acceptance of the policy the insured agrees that it "embodies all agreements existing between himself and the company or any of its agents relating to this insurance, " does not make the policyholder a member liable to assessment in accordance with the laws of the State of the company's domicile, although on the back of the policy under the heading, "Notice to Policyholders, " there is printed a statement that "The contingent liability of the named insured under this policy shall be limited to one year from the expiration or cancellation hereof and shall not exceed the limits provided by the insurance law of the State of New York, or of the State in which the insured is domiciled and/or this policy is written, " there being in the face of the policy no reference to any contingent liability or assessment, or to any law providing for such. This is true notwithstanding the charter of the company provides that the members shall be the policyholders, that its by-laws provide that every member shall be liable to assessment, and that the insurance law of the State of the company's domicile contains a like provision.
6. The court did not err in sustaining the general demurrer.
Error from Superior Court, Fulton County; Paul S. Etheridge, Judge.
Suit by Louis H. Pink, Superintendent of Insurance of the State of New York, against the A. A. A. Highway Express, Incorporated, and about twenty-four other defendants, to collect from them assessments levied in the State of New York against all members of the Auto Mutual Indemnity Company, an insolvent insurance corporation. The general demurrer of each
[13 S.E.2d 339]defendant was sustained, and the plaintiff brings error.
Judgment affirmed.
This suit was brought by Louis H. Pink, superintendent of insurance of the State of New York, jointly against A. A. A. Highway Express, Inc., et al., the defendants being approximately twenty-five in number, seeking to collect from them assessments levied in New York against all members of Auto Mutual Indemnity Company, an insolvent insurance corporation, the defendants in this case being alleged to be such members. The defendants are residents of the State of Georgia, and one or more of them residents of Fulton County, where the suit was instituted. The allegations of the petition were substantially as follows: The Auto Cab Mutual Indemnity Co. was incorporated under article 10-B of the Insurance Law of the State of New York on May 26, 1932, as a mutual automobile casualty insurance company. With approval of the insurance department of the State of New York, its name was changed on February 21, 1933, to Auto Mutual Indemnity Company, and is hereinafter referred to as the company. All provisions of the charter and amendment relevant to the issues in this case were attached as an exhibit. On the application of the superintendent of insurance of the State of New York, an order was made by the Supreme Court of that State placing the company in rehabilitation pursuant to Article 11 of the Insurance Law of that State, the order being duly filed of record. All sections of article 11 and all of the aforesaid order relevant to the issues in the case were attached as exhibits. The company being insolvent, it was placed in liquidation on that ground, by an order of the Supreme Court of the State of New York, made, entered and filed in the office of the clerk of the New York court on November 24, 1937, and all of that order relevant to the issues in the case was attached to the petition as an exhibit. The liquidation proceedings were entitled "In the matter of liquidation of the Auto Mutual Indemnity Company, " and those proceedings are still pending.
Pursuant to section 422 of the Insurance Law of the State of New York, on February 4, 1938, which was within one year from the date of the entry of the orders of rehabilitation and liquidation, the superintendent of insurance filed in said proceedings a report setting forth the reasonable value of the assets of the company, its prob able liabilities, and the probable necessary assessment to pay all allowed claims in full. That report being quite voluminous, it was not set out or attached as an exhibit, but petitioner promised to introduce it into evidence at the trial. Upon the basis of that report, pursuant to section 422, an order was made by the New York Supreme Court, on February 7, 1938, directing that an assessment of forty (40%) per cent. of premiums earned during the preceding year be levied against all members of the company, against whom an assessment might have been levied on November 10, 1937, the date of the commencement of the proceedings against the company. This order was duly filed, a copy of it being attached to the petition as an exhibit. The superintendent thereupon computed the amount of assessment due from each policy, and, pursuant to section 422 of the Insurance Law of New York, computed the amount of indebtedness of each member to the company apart from the indebtedness for assessment. These computations were attached as an exhibit, showing the names of the defendants, their residence, the numbers of their policies, the premiums earned, and the amount of assessment for which such member was liable. On the basis of the report an order was made August 12, 1938, which, together with the petition, report and exhibits of the superintendent, was duly filed in the office of the clerk of the New York court, the order directing each member during the year previous to November 10, 1937, to pay the amount assessed against him to the superintendent of insurance. The order further directed that, failing to make such payments, the members were to show cause, on September 29, 1938, why they should not be held liable to pay such assessments, together with costs, and why they should not be held liable to pay any other indebtedness which they might owe the superintendent of insurance, and why the superintendent should not have judgment therefor. This order was attached to the petition as an exhibit. Pursuant to section 422 of the Insurance Law of New York, notice of this order was mailed to all of the members of the company, including each of the defendants in this case. None of the defendants appeared to show cause, nor have they made payment as directed. All of them were policyholders of the company during some part of the year before November 10, 1937.
A copy of the policy issued to each of the defendants was attached, being...
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