Commonwealth v. Massachusetts Mutual Fire Insurance Co.

• Decision Date: 27 October 1875
• Citation: 119 Mass. 45
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: Commonwealth, by Insurance Commissioner, v. Massachusetts Mutual Fire Insurance Company. George W. Taylor, petitioner. Same v. Same. William Minot & others, Receivers, petitioners

119 Mass. 45

Commonwealth, by Insurance Commissioner, v. Massachusetts Mutual Fire Insurance Company. George W. Taylor, petitioner. Same v. Same. William Minot & others, Receivers, petitioners

Supreme Court of Massachusetts

October 27, 1875

[Syllabus Material] [Syllabus Material]

Suffolk. The first petition was by George W. Taylor, filed September 29, 1873, alleging that on July 1, 1866, the defendant company insured him against loss by fire on his house and wareroom, in Boston, for the term of seven years that on June 18, 1873, the said buildings were partially destroyed by fire; that the amount of the loss was $ 997, and that proof thereof was duly made.

The prayer of the petition was that William Minot, Charles B. Cumings and Lemuel Shaw, who had been appointed receivers of the defendant company, be ordered to appear and show cause why the dividends on the amount due the petitioner under said policy of insurance, on account of said loss, should not be paid to him. Annexed to the petition was a copy of the policy, on which were printed the rules of the defendant company. So far as these are material, they appear in the opinion.

The answer of the receivers admitted the facts stated in the petition; and alleged that on November 27, 1872, on application of the insurance commissioner to this court, the company was restrained by injunction from further proceeding with its business; that on December 7, 1872, it appearing to the court that the company was insolvent, said receivers were appointed, with authority to take possession of the property and effects of the corporation, and to collect the debts, to pay all debts due from said corporation, if the funds in their hands should be sufficient, and, if not, to distribute the said funds ratably among the creditors, and to distribute the residue, after payment of said debts, to and among the persons legally entitled thereto; and the injunction previously issued was made perpetual; that on the sixth day of December, 1872, the directors made an assessment for the payment of losses accruing prior to said date, by vote, as follows: "Whereas, members of this corporation did, during the month of November last, and on and after the ninth day thereof, sustain damage by fire over and above the existing funds of the corporation by an amount exceeding the whole liabilities of the members subject to assessment, it is therefore voted: First, that an assessment of an amount equal to two dollars for each and every dollar advanced as premium and deposit be made upon each person and company that was a member of this corporation at twelve o'clock at noon on the ninth day of November last, and that is liable for losses occurring during said November and after said twelve o'clock at noon. Second, that the president give notice of the above vote to each member of the corporation, and also publish notice of this assessment in two or more newspapers in Boston. Third, that the president be authorized to collect said assessments without delay, and to cancel outstanding policies on the payment of said assessments."

The answer further alleged that on April 7, 1873, the assessment above mentioned was duly ratified, confirmed and established by this court; that nearly all said policies have been formally cancelled on payment of the assessments due thereon, that notices of the assessment due on his policy were sent to and received by the petitioner on December 6, 1872, and on April 16 and July 1, 1873, and said assessment has not been paid, and that his policy has not been cancelled, unless by the acts, omissions and proceedings hereinbefore set forth; that said receivers have been ordered to pay dividends to the amount of one hundred percent. on all claims heretofore proved and allowed against said company, and that nearly all said dividends have been paid, but no interest has been hitherto allowed or paid on said claims; that the assets in the hands of the receivers will probably be sufficient to pay said claim of said Taylor, after making all payments heretofore ordered by this court, and after paying the expenses of winding up the affairs of the company; but that there are certain other policies, the terms of which have not expired, on which assessments have not been paid, and which are not known to have been forfeited or cancelled unless by the neglect to pay said assessment and by the proceedings hereinbefore set forth.

At the hearing before Endicott, J., the facts alleged in the petition and answer were admitted, and the question was reserved for the full court whether on these facts the petitioner was entitled to any, and, if any, what payment on account of the claim set forth in his petition.

The second petition was by the receivers of the defendant company filed May 12, 1875, alleging that an assessment was levied by the directors of the company upon the members thereof, and approved by this court, to pay claims for fire losses occurring prior to December 6, 1872; that, in levying the assessment, an allowance of fifteen per cent. was made for probable bad debts and expenses of collection; that the receivers have collected upwards of ninety-eight per cent. of the assessment, and believe that still further collections can be made; that they have paid from time to time, in accordance with the decrees of this court, one hundred per cent. on all said claims for fire losses, but have paid no interest on said claims; that there will remain in their hands after the aforesaid payments, and after paying expenses and charges of collection, upwards of eighty thousand dollars, that, by the rules of the company, all claims for fire losses were payable thirty days after notice thereof that notice of the claims above mentioned was given (or notice thereof waived by the company,) before December 6, 1872; that in...