Baker v. Citizens' Mut. Fire Ins. Co.

• Decision Date: 02 July 1883
• Citation: 16 N.W. 391,51 Mich. 243
• Parties: BAKER v. CITIZENS' MUTUAL FIRE INS. CO.
• Court: Michigan Supreme Court

16 N.W. 391

51 Mich. 243

BAKER v. CITIZENS' MUTUAL FIRE INS. CO.

Supreme Court of Michigan

July 2, 1883

Where the charter of a mutual benefit fire insurance company directs that the mode of assessing the members shall be fixed by the by-laws, and the by-laws provide that when the board of directors order an assessment the secretary shall prepare it, and it shall be signed by a majority of the board and by the secretary, and placed on file, a paper prepared by the secretary, which is not signed by himself or any one else and which contains no headings showing what is meant by the various columns in which entries are made in pursuance of a resolution of the board, is not a sufficient assessment, and a forfeiture of a policy for non-payment, within the time specified in such paper, cannot be sustained.

Error to Kalamazoo.

Dallas Boudeman, for plaintiff.

E.M Irish, for defendant and appellant.

CAMPBELL J.

Baker sued defendant on a policy of insurance and recovered judgment. The defense set up was--First, the cancellation of the policy; and, second, the forfeiture of the insurance by non-payment of assessment.

Upon the first point no legitimate question arises, as the policy was not canceled until after the loss and right of action accrued, and there was nothing in the mere act of cancellation to operate retroactively, so as to cut off the claim for damages already existing.

The controversy all turns upon the second point, for the other questions raised on the trial do not appear to have any materiality. The defendant, which is a mutual company organized under the laws of Michigan, appears to have divided its risks into various classes at different rates. Plaintiff held what was known as one first-class risk for $400, which is the one in question. He also held two fourth-class policies for $700. On January 11, 1882, the board of directors passed a resolution ordering all policies issued previous to October, 1881, to be assessed at the rate of two mills on the dollar for first-class policies, and additional rates at 10, 20, and 30 per cent. respectively on the second, third, and fourth classes, and directing an assessment to be levied accordingly, payable on the first of March and for 30 days thereafter, and that the secretary give notice on the first of March. The resolution directed that all policies not paid within the 30 days should be suspended till paid. The by-laws directed a total...