Day v. Mill-Owners' Mut. Fire Ins. Co.

• Decision Date: 11 May 1888
• Citation: 38 N.W. 113,75 Iowa 694
• Parties: DAY v. MILL-OWNERS' MUT. FIRE INS. CO.
• Court: Iowa Supreme Court

75 Iowa 694

38 N.W. 113

DAY

v.MILL-OWNERS' MUT. FIRE INS. CO.

Supreme Court of Iowa.

May 11, 1888.

Appeal from district court, Tama county; L. G. KINNE, Judge.

Action on a fire insurance policy by H. Day against the Mill-Owners' Mutual Fire Insurance Company of Iowa. Trial by a jury, and verdict and judgment for plaintiff, and defendant appeals.S. D. Nichols, for appellant.

Charles A. Clark, for appellee.

ROBINSON, J.

The petition alleges that defendant is a corporation for pecuniary profit, duly organized under the laws of the state of Iowa; that on the 15th day of December, 1884, it issued the policy in suit, and thereby insured Cranshaw & Day against loss or damage by fire or lightning, to the amount of $3,000, on their grist-mill, including building and machinery, said policy to be in force so long as the assured should remain members of the defendant corporation. The loss of the property by fire while the policy was in force, the refusal of defendant to pay the amount of the loss, and the assignment of the claim therefor to plaintiff, are also alleged. The answer of defendant admits the allegations of the petition, but denies liability for the loss in question. As a defense it alleges that it is a mutual insurance company, and that all of its policy-holders are members of it, mutually bound by its articles of incorporation and by-laws; that said Cranshaw & Day became members of defendant when said policy of insurance was issued, and became bound to comply with all the requirements of the articles of incorporation of defendant, the fifteenth article of which is in words as follows: “Should any mill insured in the company be shut down, or remain idle, from any cause whatever, more than twenty days continuously, it shall be the duty of the insured to notify the secretary of the company of such fact, and of the length of time such stoppage will probably continue, giving the cause thereof, and, if he fails so to do, his policy shall be considered suspended from the expiration of such time until the mill shall resume work, or it is reinstated by the secretary.” The answer further alleges that when the mill in controversy was destroyed, to-wit, March 5, 1885, it was, and had been for more than 20 days, shut down and idle; that notwithstanding that fact the assured had failed to give any notice of said stoppage, and defendant was ignorant of it until after the fire; that in consequence of said stoppage, and failure to give notice, the policy was suspended at the time of the fire, and defendant is not for that reason liable for the loss. Plaintiff filed a reply, which contains four divisions. A demurrer was sustained as to the second division, and overruled as to the others.

1. In order to maintain its defense, it was necessary for defendant to show that the alleged article 15 set out in its answer had been legally adopted, and was in force when the policy in suit was issued, and when the loss occurred. A writing purporting to contain the articles of incorporation of defendant, including the one in question, was offered in evidence. The plaintiff objected to its introduction, on the ground that it was immaterial and incompetent, and because the original articles and amendments offered show that they were not adopted in the manner and form required by law. This objection was sustained. Defendant then offered the minutes of the annual meeting of its members to show the adoption of the amendments. An objection on the grounds just named was sustained to these minutes. The writing offered to prove the amendments, including article 15, was not acknowledged, nor was it shown to have been approved by the attorney general and auditor of state. It is contended by appellant that it was organized under the provisions of section 1160 of the Code, and that its articles of incorporation were not required to be acknowledged by the incorporators, nor approved by the officers named. It claims that the original articles were adopted in 1875, and that the article in question was adopted in January, 1884. Appellee insists that defendant was incorporated under the provisions of chapter 1 of title 9 of the Code, as modified by other provisions of the same title, and that the associations and companies organized under section 1160 are not corporate bodies. It is admitted by the pleadings that defendant is a corporation for pecuniary profit. Section 1060 of the Code requires such corporations to adopt articles of incorporation, which must be signed and acknowledged by the incorporators and be recorded. This provision was in force when article 15 is said to have been adopted. It is claimed by appellant that, while the law required original articlesof incorporation adopted in 1884 to be acknowledged, there was no such requirement as to new articles; hence that the adoption of article 15 could be proven by the signatures of the officers of defendant thereto attached, and by the books of the company showing the action of its members. We do not think this claim can be sustained. It is the purpose of the statute to give to all persons means of ascertaining the general nature of the business to be transacted by such corporations, and the powers they may use in prosecuting it. But the business and powers of a corporation might be greatly modified, or even changed altogether, by means of amendments to its articles of incorporation. The reasons which make it desirable for the original articles to be acknowledged and recorded apply with equal force to amendments. This is shown by the facts of this case. The instrument offered to show the adoption of the amendments to the original articles includes, not only the article in controversy and other amendments, but also what purports to be all the articles of incorporation and by-laws of the company. It appears that, if this instrument is what it is claimed to be, nearly all the articles were amended, and a new one included. It is in the nature of a revision of the articles and an adoption of all as revised, but is not acknowledged. It does not show who is responsible for it, nor is it signed by any one. The only thing in the nature of an authentication attached to it is a certificate in the following language: “This certifies that at the annual meeting of the Mill-Owners' Mutual Fire Insurance Company of Iowa, held in the city of Des Moines January 16, 1884, the articles of incorporation and by-laws of the company were amended as above described. S. D. NICHOLS, President. J. G. SHARP, Secretary.” This does not purport to be, and is not, any part of the articles. The amendments are not in any manner pointed out. We conclude that the articles of incorporation of a company organized for pecuniary profit can be amended only by an instrument signed and acknowledged by a person or persons duly authorized so to do, and recorded.

2. The first division of the reply alleges in substance that defendant, pursuant to its articles of incorporation, adjusted the loss in controversy, and made an assessment on its members to pay the same, and that said assessment was collected. The division concludes with the following paragraph: “And plaintiff submits that, by reason of the premises herein before set forth, the defendant can neither plead nor maintain any defense under the alleged article fifteen of its articles of incorporation.” The third division alleges in substance that the failure to operate the mill during the time it is alleged to have been idle was due to the freezing of the head-race to such a depth that it did not furnish water sufficient to operate the...