Buck v. Ross

• Court: Supreme Court of South Dakota
• Citation: 59 S.D. 492,240 N.W. 858
• Docket Number: No. 7211.,7211.
• Parties: BUCK v. ROSS et al.
• Decision Date: 17 February 1932

59 S.D. 492
240 N.W. 858

BUCK
v.
ROSS et al.

No. 7211.

Supreme Court of South Dakota.

February 17, 1932.

Appeal from Circuit Court, Codington County; W. N. Skinner, Judge.

Action by Clarence F. Buck, as receiver of the Integrity Mutual Casualty Company, against W. E. Ross and others, copartners as Ross & Sons. From a judgment for defendants, plaintiff appeals.

Reversed, and cause remanded, with directions.

[240 N.W. 858]

Case & Case, of Watertown, for appellant.

Loucks & Wohlheter, of Watertown, for respondents.

RUDOLPH, J.

This action was brought by the plaintiff, as receiver of the Integrity Mutual Casualty Company, a corporation, to recover from the defendants the balance alleged to be due upon a premium agreed to be paid for a policy of employer's liability insurance, insuring

[240 N.W. 859]

the defendants against liability during the year 1926. The complaint alleged the incorporation of the Integrity Mutual Casualty Company (hereinafter referred to as the company); the authorization to carry on business in this state; the appointment of the plaintiff as receiver of the company by the United States District Court for the Northern District of Illinois on the 29th day of May, 1926; the application by the defendants to the company for a policy of insurance for the year 1926 and the issuance by the company of the policy; that the premium was to be determined by the pay roll of the defendants; the payment of the premium up to the 29th day of May, 1926; and alleged a balance due under the terms of the policy for the premium period ending December 31, 1926. The complaint further alleged in paragraph five that the company was a mutual company, and that the defendant, as a policyholder, was mutually liable with other policyholders for the indebtedness and liabilities of the company. The answer admitted that the defendants had paid the premium up to the 29th day of May, 1926; the answer denied the balance of the complaint and set up as a further defense that the company terminated the policy on the 29th day of May, 1926, and that upon the appointment of the receiver all protection and benefits which the defendants were to receive under the policy terminated.

There is no material dispute in the evidence. The company was duly authorized to carry on its business in this state; the policy was issued by the company to the defendants for the year 1926, at their request, with the premium based upon the defendants' pay roll. The premium was paid until May 29, 1926, the date of the appointment of the receiver. The receiver, shortly after his appointment, notified the defendants of the fact, and further, as follows: “No insurance written by the Integrity Mutual Casualty Company is in effect after the appointment of the receiver, and this notification is sent to you so that, if you have not already done so, you may immediately take steps to secure proper coverage of insurance in place of policies etc.”

There was also introduced in evidence the application, the policy and the by-laws of the company. The plaintiff also submitted evidence showing that on May 29, 1926, the Integrity Mutual Casualty Company was insolvent to the extent that, if all outstanding premium accounts and all other assets of the company were realized upon in full, there would still be a deficiency as to all creditors of over a million dollars. The defendants objected to all of this evidence regarding insolvency upon the grounds that it was incompetent, irrelevant, and immaterial. This objection raises the first issue for our determination. The trial court admitted the evidence over the objection, but made no finding as to insolvency, and ultimately held in favor of the defendants.

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