Davis v. Oshkosh Upholstery Co.
| Decision Date | 15 June 1892 |
| Citation | 52 N.W. 771,82 Wis. 488 |
| Court | Wisconsin Supreme Court |
| Parties | DAVIS v. OSHKOSH UPHOLSTERY CO. DAVIS v. PARCHER & J. A. STEWARD CO. DAVIS v. BANDEROB ET AL. DAVIS v. PAINE LUMBER CO., (TWO CASES.) |
OPINION TEXT STARTS HERE
Appeal from circuit court, Winnebago county; GEORGE W. BURNELL, Judge.
Five actions, brought by C. W. Davis, receiver of the Oshkosh Mutual Fire Insurance Company, against the Oshkosh Upholstery Company, same against the Parcher & J. A. Steward Company, same against John Banderob and C. C. Chase, same against the Paine Lumber Company, and same against same, to recover an assessment on premium notes given by the defendants. All parties appeal from the judgment. Affirmed on the appeal of the receiver. Reversed on the appeal of each defendant.
The other facts fully appear in the following statement by LYON, C. J.:
The Oshkosh Mutual Fire Insurance Company was organized in 1886, under chapter 89, §§ 1896-1901, Rev. St., as a mutual insurance company. The written articles of organization provide that the business of the company shall be conducted on the plan of mutual insurance, and that all persons insured therein shall be members of the company, and at all times bound by the stipulations and provisions in such articles, and by the by-laws of the company not inconsistent therewith. The articles further provide that “premium notes may be received from the insured, which shall be paid at such times and in such sum or sums as the directors may require for the payment of losses and expenses happening during the term for which the policies were issued, to the amount of their premium notes, but the liability of any policy holder is limited to the amount of the note given by him,” (section 15;) also that “any persons applying for insurance, so electing, may pay a definite sum in money, to be fixed by said corporation, in full for said insurance, in lieu of a premium note,” (section 16.) The articles of association successfully passed the official scrutiny of the attorney general, and the promoters of the corporation succeeded in satisfying the insurance commissioner that all the conditions of the statute, precedent to the issuing of the patent of incorporation, had been duly complied with. The commissioner thereupon issued such patent authorizing the company to commence business under its articles of association. The company organized by the appointment of the proper officers, and the adoption of a code of by-laws, and proceeded to perform the functions of a duly-incorporated mutual fire insurance company. In October, 1888, the company adopted an amended code of by-laws. A sufficient statement of such by-laws will be found in the opinion. In November, 1889, the company became insolvent. An action was thereupon commenced in the circuit court by certain of its directors and creditors, to wind up its affairs, and a receiver thereof was duly appointed by the court, who qualified and entered upon the performance of his duties as such. That action was before this court on the question of the right of the plaintiffs therein to maintain it, and the relations of the attorney general to the litigation. 77 Wis. 366, 46 N. W. Rep. 441. Just before the commencement of such action the board of directors made an assessment of 40 per cent. of the full face thereof on all deposit or premium notes held by the company, which assessment was ratified and confirmed by the court, after the receiver was appointed, on his ex parte application. Notice of such assessment was duly given by the receiver to the makers of such notes, pursuant to the order of the court. The respective defendants in these actions are policy holders in the company, and gave premium notes for their insurance. The actions are to recover such 40 per cent. assessment on said notes, respectively. The circuit court gave judgment in each case for the amount of such assessment, limited in one case (that against the Paine Lumber Company) to the amount unpaid on the note, which was only 20 per cent. thereof. Each defendant appeals from the judgment against it or them, and the receiver appeals in the case above mentioned because the recovery therein is only for 20 per cent. of the face of the note.Finch & Barber, for plaintiff.
Weisbrod, Thompson & Harshaw and Phillips & Kleist, for defendants.
LYON, C. J., ( after stating the facts).
We are not aware that a case has before reached this court involving the consideration of the relative rights and duties of members of a mutual fire insurance company organized under that portion of chapter 89, Rev. St., included in sections 1896-1901, inclusive. Indeed, it was stated in the argument of the learned counsel for the receiver, and the accuracy of the statement was not challenged, that no other than the Oshkosh Mutual Fire Insurance Company has ever been organized under the provisions contained in those sections. All other mutual fire insurance companies in this state seem to have been organized under other statutes, the provisions of which differ from those contained in the above sections in many important particulars. Such other statutes are collated in Sanb. & B. Ann. St. as portions of chapter 89, and are entitled, respectively, “Mutual Insurance Companies in Cities and Villages,” “Town Insurance Companies,” “Millers' and Manufacturers' Mutual Insurance Corporations,” “Druggists' Mutual Insurance Companies,” and “Insurance of Church Property.” So we must determine the relative rights and obligations of the members of the Oshkosh Mutual Fire Insurance Company mainly upon the provisions of those portions of chapter 89 under which it was organized, upon the articles of association, the by-laws of the company, and its methods in the transaction of its business, without being able to derive much aid from cases arising under and governed by other statutes. The task is by no means an easy one. The organic law of the company (Rev. St. §§ 1896-1901, 1907, 1945) contains general provisions for the organization and incorporation of both stock and mutual fire insurance companies, so commingled that it is difficult to determine which of them apply to stock companies, and which of them to mutual companies alone, or which of them (if any) are common to both. Most of its provisions, however, relate to stock companies alone, and those affecting mutual companies are exceedingly meager and unsatisfactory. The articles of association of the Oshkosh Company seem to be entirely consistent with the statutes, and do not violate any essential principle of mutual insurance. But this cannot be said of the by-laws. In some respects they disregard the distinction between stock and mutual companies, and contain provisions antagonistic to the organic law of the company. Besides, some of them are quite unintelligible. In addition to the above difficulties, the practices of the company in respect to some of its most important functions seem to have been unauthorized, either by the organic law or its defective by-laws. Under the above conditions it is not strange that the company ran its course from birth to insolvency in a little more than three years.
As already observed the statutes contain but few specific provisions for the government of mutual companies organized under the above sections, but in the main leave them to pursue their business as they will, subject only to those general rules of law which prescribe the limits within which they must operate, and the relative rights and liabilities of their members. The articles of association seem to comply with the requirements of the statute, and to be in accord therewith. A point is made on the articles of association which may as well be here considered. It is argued on behalf of the receiver that the clause therein which permits the insured to pay a fixed sum in cash in full for his insurance, instead of giving a premium note for a portion thereof, is a departure from the principle of mutual insurance, and makes the company, as to such policies, a moneyed or stock company. It is said that the opinion by COLE, C. J., in 77 Wis. 366, 46 N. W. Rep. 441, supports that view. We do not agree with counsel. This is either a mutual or a stock corporation. Under our statutes, it cannot be both, and there is nothing in the case above referred to which...
To continue reading
Request your trial
-
United Order of Foresters v. Miller
...members, paying adequate rates joined and for such deficit the subsequent members ought not equitably to be held. Davis v. P. & J. & A. S. Co., 82 Wis. 488, 498, 52 N. W. 771;Clark v. Iowa S. T. M. Ass'n, 156 Iowa, 201, 205, 135 N. W. 1114, 42 L. R. A. (N. S.) 631; followed in Malone v. Gr.......
-
Burton v. School Dist. No. 19
...on Ins. (2d Ed.), 104; 1 Joyce on Ins. (2d Ed.), 708. Policyholders do not assume an unlimited liability as to assessments. Davis v. Parcher, 82 Wis. 488; Swing v. (Minn.) 101 N.W. 77; Insurance Co. v. Hoge, 21 How. (62 U.S.) 35, 64; Insurance Company v. Brinker, (Mich.) 210 N.W. 329; Lyons......
-
Swing v. H. C. Akeley Lumber Company
...Detroit Ins. Co. v. Merrill, 101 Mich. 393, 59 N.W. 661; York Co. Ins. Co. v. Turner, supra; People's Ins. Co. v. Hartshorne, supra; Davis v. Parcher, supra; Western Tel. Co. v. Burnham, 79 Wis. 47, 47 N.W. 373; Bowen v. Kuehn, 79 Wis. 53, 47 N.W. 374; American Ins. Co. v. Pressell, supra; ......
-
Buck v. Ross
...that the company loses its identity as a mutual company. This fact, however, is not contrary to mutual insurance. Davis v. Oshkosh Upholstery Co., 82 Wis. 488, 52 N.W. 771; Given v. Rettew, 162 Pa. 638, 29 A. 703. Respondents further contend, in this connection, that the articles of associa......