McCall v. Bowen
| Decision Date | 20 April 1912 |
| Docket Number | 16,922 |
| Citation | 135 N.W. 1014,91 Neb. 241 |
| Parties | E. D. MCCALL, RECEIVER, APPELLEE, v. RICHARD BOWEN ET AL., APPELLANTS |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Lancaster county: ALBERT J CORNISH, JUDGE. Affirmed.
AFFIRMED.
E. P Holmes, George L. De Lacy, J. F. Fults, J. C. McNerney, F. A Berry, F. D. Hunker, W. L. Kirkpatrick, J. W. Purinton, E. R. Hitchcock and Tibbets, Anderson & Baylor, for appellants.
E. J. Clements, contra.
The Hog Raisers Mutual Insurance Company of Lincoln, Nebraska, was organized in April, 1899, under chapter 46, laws 1899. It did business from its organization until June, 1900, during which time it issued about 560 policies. Losses were sustained which were adjusted, audited and allowed by the company. On the 6th day of June, 1900, there was more than $ 6,000 due and unpaid on the same. Judgment was recovered by a policy holder on an unpaid loss and an execution issued thereon which was returned wholly unsatisfied. Afterwards, the creditor began an action in the district court for Lancaster county, alleging the insolvency of the company, the issuance and return of the execution, that the officers of the company have failed and neglected to enforce the statutory liability of the members, or to collect from them the necessary funds to pay the judgment and the other unpaid losses, and praying for the appointment of a receiver.
Pursuant to this application the plaintiff was appointed receiver, and was authorized to make any and all assessments necessary to pay all valid obligations existing against the company, including the costs and expenses of the receivership, and to collect the assessments by suit or otherwise. In the receivership proceedings claims to the amount of $ 8,721 were presented, heard by the court, and allowed. Afterwards, the receiver, in pursuance of an order of the court, made an assessment upon each of the members for his proportionate share of the amount necessary to defray the losses and expenses. This assessment was approved, adopted and confirmed by the court, and the receiver was ordered and directed to collect the same. A number of members paid the assessment, but a large number refused to pay. This suit is brought to recover this assessment.
The petition herein alleges that the assessments as made would be sufficient to meet all claims and assessments, but that certain of the defendants have removed from the state, and others are insolvent, and that it is necessary that a court of equity take into account the losses that will necessarily result from these facts, and that, upon rendition of judgment for the full amount of the assessment, the court should determine whether execution should issue for the full liability, or whether in the first instance an execution for a part only will be adequate for the collection of the necessary amount. It is further alleged that this action is ancillary to the suit brought to wind up the affairs of the company, that separate and independent suits against each of the members would require a multiplicity of suits and excessive and unnecessary expenses, and that the plaintiff is without an adequate remedy at law. The prayer is that a several judgment be entered against each of the defendants, that the court ascertain the amount for which execution shall issue in the first instance against each defendant, and for such other relief as may be equitable.
A large number of the defendants live and were served in Lancaster county, but many are residents of other counties. Judgment was entered by default against a number of defendants. Trial was had as to the others who were served and judgments rendered against them. Eighty defendants have appealed to this court. Special appearances objecting to the jurisdiction were made and demurrers were filed by a number of defendants residing in other counties than Lancaster upon three grounds. These demurrers for the most part set forth, first, a general demurrer; second, that the statute of limitations had run; third, that the causes of action were improperly joined. The special appearances and demurrers were overruled, but the same objections were carried forward into the answers. The answers plead certain assessments made by the directors while in control of the company, that such assessments were sufficient to cover and pay the losses sustained and the expenses incurred up to their respective dates, that the assessments now sought to be collected are to cover the same losses as the assessments made by the directors, and that the cause of action is barred by the statute of limitations.
In reply the plaintiff alleged that the assessments attempted to be made by the directors were void, and, further, that the prior assessments were by the court declared invalid and set aside and all payments made upon the same were credited to the member so paying.
The appellants argue and rely upon the propositions that the court erred in overruling the special appearances and the demurrers for the lack of jurisdiction over the person of defendants; that the cause of action is barred; and that, there being no proof of signature to the application, the evidence does not sustain the judgment.
The question as to whether the court erred in overruling the special appearances and the demurrers depends upon the question whether this is a proceeding in equity, in which all of the defendants have a common interest and where the powers of the court may be invoked to increase or diminish the amount each defendant may be compelled to contribute in order to pay the losses and expenses, or whether it is an action at law in which each defendant is entitled to a jury trial. This question must be determined from a consideration of the statute under which the corporation was organized and whereby the rights, duties and liabilities of its members were fixed. If the policy holders in a mutual insurance company organized under the act of 1899 are, in point of fact, stockholders in the corporation, although not so denominated either in the suit or in other dealings with the company, their rights and liabilities are fixed by that relation. Under section 2 of the act all persons who take insurance in the company become and continue members during the period their insurance is in force and no longer, and it is provided that they shall sign an application obligating themselves to pay all assessments made for losses and expenses while they continue members. Section 4 provides, in...
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