Eichman v. Hersker

• Court: Pennsylvania Supreme Court
• Writing for the Court: MR. DEAN, JUSTICE
• Citation: Eichman v. Hersker, 170 Pa. 402, 33 A. 229 (Pa. 1895)
• Decision Date: 07 October 1895
• Docket Number: 301
• Parties: John Eichman, Receiver of the North Schuylkill Mutual Fire Insurance Co., v. John Hersker, Appellant

33 A. 229

170 Pa. 402

John Eichman, Receiver of the North Schuylkill Mutual Fire Insurance Co., v. John Hersker, Appellant

No. 301

Supreme Court of Pennsylvania

October 7, 1895

Argued February 21, 1895

Appeal, No. 301, Jan. T., 1895, by defendant, from judgment of C.P. Schuylkill Co., May T., 1886, No. 12, on verdict for plaintiff. Affirmed.

Assumpsit to recover assessment on policy No. 628. Before PERSHING P.J.

This case and the next succeeding case were tried together by the court without a jury under the act of April 22, 1874, P.L 109.

The facts appear by the opinion of the Supreme Court.

The court entered judgment in favor of plaintiff in this case for $547.22, and in the next succeeding case for $497.46.

Exceptions to the judge's findings of fact and conclusion of law were overruled.

Errors assigned were in overruling exceptions as above.

The judgment is affirmed, and the appeal is dismissed at costs of appellant.

A. W. Schalck and James Ryon, for appellant. -- Defendant was relieved of payment of the assessment by the fraud practiced upon him: Sunbury Fire Ins. Co. v. Humble, 100 Pa. 495; New Era Life Assn. v. Weigle, 128 Pa. 577.

The claim is barred by the statute: Price v. Yates, 7 W.N.C. 51; Laforge v. Jayne, 9 Pa. 410; Pittsburg & Connellsville R.R. v. Byers, 32 Pa. 22; Pittsburg & Connellsville R.R. v. Graham, 36 Pa. 79; Hayes v. Lycoming Fire Ins. Co., 99 Pa. 621; Sinkler v. Turnpike, 3 P. & W. 149; Scovill v. Thayer, 105 U.S. 143; Terry v. Tubman, 92 U.S. 156.

Notwithstanding the assignment to Sollenberger the directors could and should have met in due time to levy their assessment, and such assessment would have been valid and enforceable: West Branch Ins. Co. v. Macklin, 66 Pa. 34; Schimpf v. Lehigh V.M. Ins. Co., 86 Pa. 373; Germantown's P.R.W. Co. v. Fitler, 60 Pa. 124; Bunn's and Lane's App., 105 Pa. 49; Bell's App., 115 Pa. 88; Bailey v. Coal Co.; 139 Pa. 213; Hamilton v. R.R. Co., 144 Pa. 34; 16 Am. & Eng. Ency. of Law, 69, 70.

There are no creditors here except the directors themselves, who might have made their assessment at any time, and they cannot escape the legitimate consequences of their own delay and negligence and avoid the bar of the statute by hiding behind a receiver of their own creation, himself a brother director: Hawkins v. Glenn, 131 U.S. 319; Girard Bank v. Bank of Penn Twp., 39 Pa. 92; Glenn v. Liggett, 135 U.S. 533; Sanger v. Upton, 91 U.S. 56; Baker v. Bank, 9 Met. 182; Yeager v. Scranton Trust Co., 14 W.N.C. 296; Bank v. Bridges, 20 W.N.C. 43; Shackamaxon Bank v. Dougherty, 20 W.N.C. 297; McKelvy's App., 72 Pa. 409.

The right of the company to cancel policies and thus terminate the contract has been constantly recognized: Akers, Receiver, v. Hite, 94 Pa. 394; Atlantic Ins. Co. v. Fitzpatrick, 2 Gray (Mass.), 279; May on Insurance (2d ed. 1882), p. 849, § 555; Columbia Ins. Co. v. Masonheimer, 76 Pa. 138. To give effect to the spirit of the statute, the law fixes the time when the cause of action shall be taken to have accrued by the duty of diligence required of the party: Steele v. Steele, 25 Pa. 154; Todd's App., 24 Pa. 429; Pittsburg etc. R.R. Co. v. Byers, 32 Pa. 22; McCully v. Pittsburg etc. R.R. Co., 32 Pa. 25; Pittsburg R.R. Co. v. Graham, 36 Pa. 77; Rhines v. Evans, 66 Pa. 192.

On the question of the lapse of time equity follows the analogy of the statute of limitations; and the bar of the statute cannot be avoided or overcome by a resort to a court of equity: Todd's App., 24 Pa. 429; York's App., 110 Pa 69; Penna. R.R. Co.'s App., 125 Pa. 189; Phila. Trust Co. v. Coal & Iron Co., 139 Pa. 534; Trickett on Limitations, p. 214, pars. 168, 169; Girard Bank v. Penn Twp. Bank, 39 Pa. 92: Finkbone's App., 86 Pa. 368; Milne's App., 99 Pa. 483; Bauserman, Admr., v. Blunt, 147 U.S. 647; Trickett on Liens, p. 296, §§ 225-227; 13 Am. & Eng. Ency. of Law, p. 726, and note 1.

The receiver, levying an assessment, must proceed to do so on the same principles as the board of directors would: Savage v. Medbury, 19 N.Y. 32; Lawrence v. Nelson, 21 N.Y. 158.

George J. Wadlinger, for appellee. -- Findings of facts are not reviewable: Griffith v. Sitgreaves, 90 Pa. 161; Jamison v. Collins, 83 Pa. 359; Bradlee & Co. v. Whitney, 108 Pa. 362; Southern Maryland R.R. v. Moyer, 125 Pa. 506; Lee v. Keys, 88 Pa. 175; Brown v. Dempsey, 95 Pa. 243.

The statute of limitations did not commence to run until the date of the assessment: Smith v. Bell, 107 Pa. 352; Solly v. Moore, 1 Dist. Rep. 688; Scovill v. Thayer, 105 U.S. 143.

A mutual insurance company is bound to assess enough to pay its losses, no matter how many assessments it may require: Rinehart v. Allegheny Ins. Co., 1 Pa. 359; Coston v. Allegheny Ins. Co., 1 Pa. 322; Hummel & Co.'s App., 78 Pa. 320; Diehl v. Adams Ins. Co., 58 Pa. 443.

A failure to collect one assessment is not a waiver of the right to collect a subsequent one: Crawford Ins. Co. v. Cochran, 88 Pa. 230.

There is no doubt of the power of the court (or a judge at chambers) to make a decree ordering an assessment such as this: Bank v. Gillespie, 115 Pa. 564; Sanger v. Upton, 1 Otto (U.S.), 56; Kennedy v. Gibson, 8 Wallace (U.S.), 498; Cadle, Receiver, v. Baker, 20 Wall. (U.S.), 650; Rec. of Gt. West. Tel. Co. v. Gray, 27 Am. L. Reg. 167.

The validity of an assessment made by a receiver by order of a court of equity of competent jurisdiction cannot be inquired into collaterally: Beeber v. Langley, 12 Md. Law Rec. 123; Third Reformed Church's App., 88 Pa. 503; Kelsey v. Murphy, 26 Pa. 78; Chandler's App., 39 Leg. Int. 347; Herman on Estoppel, sec. 1299; Taylor v. Cornelius, 60 Pa. 187.

Before GREEN, WILLIAMS, McCOLLUM, DEAN and FELL, JJ.

OPINION

MR. DEAN, JUSTICE

On June 8, 1874, John Eichman, now the plaintiff, receiver, and ten other citizens of Schuylkill county, secured a charter for the North Schuylkill Mutual Fire Insurance Company of Mahanoy City. They at once organized the company and commenced to solicit insurance, appointing Carl Scheuerman general agent; he, on 15th of July, 1874, called on the defendant, John Hersker, and urged him to take out a policy, representing the company was doing a prosperous business and had then issued about five hundred and twenty-five policies; Hersker made application for a $2,000 policy. The application is as follows:

"For value received, and in consideration of a policy of insurance to be issued by the North Schuylkill Mutual Fire Insurance Company, of Pennsylvania, upon the approval of my application of insurance in said Company of this date, I promise to pay the said Company such sum or sums of money, and at such time or times, as the Board of Directors of said Company may, for the purpose of paying losses by fire, and the necessary expense of said Company, require, -- payable within thirty days after notice and demand.

"CARL SCHEUERMAN,

"Agent.

JOHN HERSKER, Applicant."

The policy contains this stipulation:

"In consideration of dollars in hand paid, and hereby acknowledged, and an obligation to pay all such sum or sums of money, and at such time or times, as the Board of Directors may, for the purpose of paying losses by fire, and the necessary expenses of said Company, require, do insure," &c.

Hersker also delivered to the company his premium note.

It appeared that Scheuerman, the agent, had falsely represented the number of policies then in force to Hersker; instead of about five hundred and twenty-five, Hersker's made the twenty-fifth, the first policy having been No. 501 instead of No. 1. Later, on December 8, 1874, Scheuerman solicited and obtained an application from Hersker for a second policy in the sum of $2,200; the application and policy being the same in form as the first.

Two assessments were made on these notes, No. 1, October 6, 1875, of 1 1/2 per cent, No. 2, May 10, 1876, of a like percentage, and both assessments were paid by Hersker. On May 17, 1876, a destructive fire occurred in Mahanoy City, by which the company was a very heavy loser; but notwithstanding this, a number of policies were taken out after that date, the last being No. 718. Nearly all the losses by fire occurred prior to the issuing of the second policy, No. 628, and a few before the issue of the first, No. 525. The losses, however, were so severe, that property owners were greatly deterred from becoming members; as a result, the managers were discouraged, and on 6th of April, 1877, they resolved to issue no more policies, and that all policies issued should terminate the 10th of May, 1877; at the same time they further resolved to surrender to the policy holders all premium notes on payment of all unpaid dues and assessments. So far as the record shows, none of the policy holders accepted this method of ending their relations with the company. On December 21 of same year, the company made an assignment to I.Y. Sollenberger, Esq., for the benefit of creditors; he accepted the trust, and performed his duties until 1st of September, 1884, when he filed his account and resigned.

Before the assignment, the board of directors had laid two more assessments, each of 1 1/2 per cent, the first, No. 3, January 11, 1877, and the second, No. 4, May 8, 1877. These Hersker also paid. But a small part of the last assessment was collected when the assignee assumed his duties. The aggregate of the four assessments was $13,806.33, of which, owing to insolvency of members, only about $6,000 was collected. By the account of assignee Sollenberger, confirmed absolutely, there was a balance in his hands, when he resigned, of only $781.18.

William Krause, the holder of policy No. 533, issued 24th of July 1874, for $1,200, sustained a loss by fire of all the property insured under it on the 10th of October, 1875;...