Farmers' Mut. Fire Ins. Co. v. Knight

• Decision Date: 12 May 1896
• Citation: 44 N.E. 834,162 Ill. 470
• Parties: FARMERS' MUT. FIRE INS. CO. v. KNIGHT.
• Court: Illinois Supreme Court

162 Ill. 470

44 N.E. 834

FARMERS' MUT. FIRE INS. CO.

v.KNIGHT.¹

Supreme Court of Illinois.

May 12, 1896.

Appeal from appellate court, Second district.

Action by E. B. Knight against the Farmers' Mutual Fire Insurance Company. From a judgment of the appellate court (59 Ill. App. 274) affirming a judgment for plaintiff, defendant appeals. Affirmed.

Dixon & Bethea and A. K. Trusdell, for appellant.

R. S. Farrand and C. B. Morrison, for appellee.

CRAIG, C. J.

This is an appeal from a judgment of the appellate court affirming a judgment of the circuit court of Lee county, wherein Edward B. Knight recovered from the Farmers' Mutual Fire Insurance Company of Palmyra, Lee county, Ill., a judgment for $2,464.10 on a policy of insurance. In the circuit court a jury was waived, and a trial had before the court, and, after the evidence was introduced, various propositions of law were submitted by the respective parties, and passed upon by the court; but it will not be necessary to set out in this opinion those propositions, and the ruling of the court upon them, as the questions involved have been narrowed down to a small compass, and will be found stated in appellant's brief as follows: ‘The chief question to be determined in this case is as to whether the said last assessment was a valid one, and, in determining whether it was valid or not, there are two questions to be decided: One is as to whether the company had power to levy the assessment; and another is as to whether, assuming that the company had not such original power, the appellee, Knight, was estopped from setting up such a want of power. The appellant claims that, in the first place, it had such power, under its charter; and, in the second place, that the appellee is estopped from denying such power.’

The appellant corporation was organized under a special act of the legislature approved February 15, 1865 (1 Priv. Laws 1865, p 647). The first section provides that C. B. Thummell, and 12 other persons therein named, their associates, successors, and assigns, ‘are hereby created a body corporate by the name and style of the Farmers's Mutual Fire Insurance Company of Palmyra in the county of Lee, and by that name shall have perpetual succession and may sue and be sued, may make all by-laws, rules and regulations that shall be necessary and convenient for the government of the said corporation, not inconsistent with the constitution or laws of the United States, nor of this state, and generally do all and singular the matters which to them lawfully appertain to do for the well being of said corporation and the management of the affairs thereof.’ Section 2 provides that ‘said corporation shall not hold any property except what may be absolutely necessary for the transaction of their corporate business, or such as shall be taken security for or in payment of debts, nor shall any by-laws be repugnant to this instrument, the constitution of the United States or of this state.’ Section 3 provides that ‘the power of this association shall be vested in thirteen managers.’ Section 4 provides that ‘each insurer in or with the company shall be a member thereof during the term of his or her policy and no longer.’ Section 5 provides, ‘And the members shall at such general meetings pass all by-laws, rules and regulations necessary for the well governing of the affairs of the corporation, or vest the power so to do in the board of managers.’ Section 6 provides that ‘the president and managers shall have full power on behalf of said corporation to make insurances against loss by fire on houses, barns or other buildings, in goods, wares and furniture, in live stock, hay, grain and other agricultural products in barns, stacks,’ etc. Section 7 provides: ‘It shall be lawful for said company to employ and invest all moneys received by them, and the profits thereof, in purchase of any ground rents or mortgages or any loans or stocks of the United States or of this state; and no money shall be drawn from the funds of the said company for the purpose of making dividends or dividing profits, or for other purposes than first to defray the current or incidental charges of the corporation and then for the purpose of such damages as any member of said company or insurer therein may justly be entitled to; and when the just demands of any insurer in said company or member thereof shall exceed the amount in its available funds on hand, such sums as shall be necessary to pay the same shall, without unnecessary delay, be assessed by the board of managers on insurance, each member to pay in proportion to the amount he has insured and publish the same; and all and every of the members of the company shall pay into the hands of the treasurer his, her or their proportionable rates, within thirty days after such publication aforesaid for the period of sixty days, his, her or their policy shall become suspended until payment shall have been made and shall, notwithstanding, be liable to said rates pursuant to his, her or their covenant or agreement.’ Under the authority of the charter, the company adopted certain by-laws for its government, article 7 of which provides: ‘For ordinary farm risks, the premium shall be at the rate of three dollars per thousand on the amount insured, with three dollars to cover the additional expense of examination and policy; and the liability of the assured to assessment to pay losses and expenses shall be the amount of insurance named in the policy. Each policy shall be what is called perpetual.’

On the 10th day of August, 1892, Edward B. Knight, the appellee, applied to the company for a $4,000 policy on certain property by him owned. The application contained the following: ‘That, if a policy of insurance is issued to him upon the above-described property, he will faithfully abide by and observe all the conditions, rules, regulations, and orders of the company contained in its charter and by-laws, and promptly pay, whenever called upon, his just share of the assessments made for the payment of losses by fire and lightning incurred at any time by any member of the company.’ Upon receiving the application a policy was issued which contained the following: ‘This policy witnesseth that E. B. Knight, having become a member of the Farmers' Mutual Fire Insurance Company of Palmyra, Lee county, Illinois, and having deposited with the treasurer of said company the sum of $15, is hereby insured by the said society for the sum of $4,000, upon the following described property, situated in said Lee county: [Here follows a description of the property.] In consideration of above obligation of the said company, the said Knight binds himself, and his heirs, executors, administrators, and assigns, to comply with the constitution, rules, regulations, and by-laws of said company. [Signed by president and secretary of said company.]’ On the 25th day of April, 1893, at a meeting of the board of managers of the company, it was ascertained from an examination of the books...