Commonwealth Mut. Fire Ins. Co. v. Edwards

• Decision Date: 07 March 1899
• Parties: COMMONWEALTH MUT. FIRE INS. CO. et al. v. EDWARDS et al.
• Court: North Carolina Supreme Court

32 S.E. 404

124 N.C. 116

COMMONWEALTH MUT. FIRE INS. CO. et al. v. EDWARDS et al.

Supreme Court of North Carolina

March 7, 1899

Syllabus by the Court.

Appeal from superior court, Wake county; Brown, Judge.

Action by the Commonwealth Mutual Fire Insurance Company and others against Edwards & Broughton. There was a judgment for plaintiffs, and defendants appeal. Modified.

Faircloth C.J. dissenting.

Douglass & Simms, for appellants.

J. W Hinsdale and Perrin Busbee, for appellees.

DOUGLAS J.

This is an action brought by the receiver of a mutual insurance company for the collection of certain assessments upon the defendants levied under a decree of the superior judicial court of the state of Massachusetts. The case comes before us on demurrer. This disposes, in limine, of all statutes of limitation, which in cases like the present can be availed of only by answer. Code, § 138; Guthrie v. Bacon, 107 N.C. 337, 12 S.E. 204; Randolph v. Randolph, 107 N.C. 506, 12 S.E. 374; Albertson v. Terry, 109 N.C 8, 13 S.E. 713. This rule, however, does not apply to possessory titles, which are more in the nature of presumptions than strict limitations. Freeman v Sprague, 82 N.C. 366; Asbury v. Fair, 111 N.C. 251, 16 S.E. 467.

The following allegations appearing in the complaint must be taken as facts for the purposes of this appeal: The plaintiff corporation issues to the defendants two policies of fire insurance,--one for $2,000, dated June 29, 1894, and the other for $3,000, dated July 14, 1894. It was stipulated in the policies that the insured should pay, in addition to the cash premium, all such sums as might be lawfully assessed by the directors of said company, but not to exceed three times the amount of said cash premium. The present assessments are within the limit. The policies were obtained and delivered through a local agent, denominated a "broker" by the plaintiff, but whose legal status, as between the parties, is a question of law on admitted facts. On March 19, 1895, suit was brought by the insurance commissioner of Massachusetts to wind up the affairs of the plaintiff company, and on May 28, 1895, the plaintiff Stevens was appointed receiver, to whom the company, on the 7th day of March, 1896, executed an assignment of all its assets. After the institution of the suit, to wit, on March 7, 1896, the directors of the plaintiff corporation, in accordance with a decree in the cause, levied "an assessment of $250,000 upon the former and present members of the corporation liable thereto, the same being necessary for the payment of losses incurred after the issue of the policies held by the members of the said corporation, and before their respective expiration or cancellation, and while the said defendants and the other policy holders against whom the said assessment was made were members of said corporation, and the expenses of collecting and the expenses of the receivership for which the defendants, together with the other policy holders and members, were liable." It is further alleged that all the proceedings were had in all respects in conformity to sections 47 and 49 of chapter 522 of the Laws of the State of Massachusetts of 1894, which, in the absence of an answer, we presume govern the proceedings in such cases. There are other allegations in amplification of the above, and also as to notice, individual assessment, and nonpayment, with the important averment that the plaintiff corporation complied with the requirements of section 3062 of the Code of North Carolina, and received license to transact the business of fire insurance on the 2d day of July, 1894. This was subsequent to the issuing of the first policy, but previous to the second policy.

The learned counsel for the plaintiff say in their brief that "if policy No. 4,214, dated June 29, 1894, were made in North Carolina, of course it would be void, and the assessment could not be collected." We think that, in contemplation of law, it was made in North Carolina, and that the broker, in taking the applications for the policies, acted as the agent of the plaintiff corporation. Section 8 of chapter 299 of the Public Laws of 1893 provides that "all contracts of insurance, the application for which is taken with in the state, shall be deemed to have been made within this state and subject to the laws thereof." Therefore the plaintiffs cannot maintain their action for any assessment or other liability arising under the policy dated June 29, 1894.

Our attention has been called to chapter 383 of the Laws of 1889 allowing any citizen of this state to contract on his own account for insurance with any company doing an insurance business outside of the state, and allowing the company to be sued and to adjust the loss without being subject to penalties for taxes. We do not question the right of any citizen to apply outside the state for insurance, but in the present case the application was made within the state, and therefore subject to the act of 1893. The act of 1889 allows an outside company--that is, one that has not complied with our laws--to be sued, but not to sue. Its evident purpose was to allow such...