Meley v. Whitaker

• Decision Date: 20 June 1898
• Citation: 40 A. 593,61 N.J.L. 602
• Parties: MELEY v. WHITAKER.
• Court: New Jersey Supreme Court

40 A. 593

61 N.J.L. 602

MELEY

v. WHITAKER.

Court of Errors and Appeals of New Jersey.

June 20, 1898.

(Syllabus by the Court.)

Error to supreme court.

Action by Thomas Whitaker, receiver of the Millville Mutual Marine & Fire Insurance Company, against George Meley, to recover a premium assessment Plaintiff had judgment (38 Atl. 840), from which defendant brings error. Affirmed.

David J. Pancoast, for plaintiff in error.

Samuel H. Richards and Thomas E. French, for defendant in error.

DIXON, J. On September 19, 1870, the Millville Mutual Marine & Fire Insurance Company issued to the plaintiff in error a policy of insurance, No. 1,171, for which the latter gave the company a note in the following form: "$600.00. For value received, in fire policy No. 1,171, dated the —— day of ——, 18, issued by the Millville Mutual Marine and Fire Insurance Company, I promise to pay to the said company the sum of six hundred dollars, in such proportions and at such time or times as the directors of said company may, agreeably to their charter, require. Given as an assessment of said policy. 30. George Meley." On August 10, 1872, the company issued to him another policy, for which he gave a similar note, in the sum of $825; and on December 10, 1883, the company issued to him a third policy, for which he gave a like note, in the sum of $600. On September 21, 1885, the company having become insolvent, a bill was filed in the court of chancery, pursuant to the statute, to have it so adjudged, and its assets administered. On this bill the company was declared to be insolvent, and the defendant in error was appointed its receiver. On January 26, 1886, the receiver presented to the chancellor a petition asking the aid and direction of the court in the making of an assessment upon the notes above mentioned and all similar obligations held by the company, in order to pay the company's debts; and thereupon the chancellor referred the matter to a master, to ascertain and report the facts required for such an assessment. Accordingly, the master, after summoning all the makers of such notes to appear before him, ascertained and reported the necessary facts; and on July 16, 1892, the chancellor directed the receiver to levy a corresponding assessment. This the receiver did, and fixed March 1, 1894, as the day for payment, of which he gave due notice. The plaintiff in error having failed to pay the assessment levied on his notes, the receiver brought suit in the supreme court to recover the same; and, upon a special verdict found in the Camden circuit, the supreme court rendered judgment for the receiver, which judgment is now before us for review.

In assailing this judgment, counsel for the plaintiff in error has directed his argument wholly against the proposition laid down in the opinion of the supreme court, that the plaintiff in error was a party to the proceedings in the court of chancery to the extent that its adjudication, as to the fact and the amount of his indebtedness to the insolvent company, bound him, and could be reviewed only by appeal therefrom. If the maintenance of this proposition were necessary to support the judgment we would hesitate to affirm it. The notes in suit were mere legal obligations, the character of which was not changed by the fact that the promisee became insolvent, and was summoned into the court of chancery for the settlement of its affairs. Barkalow v. Totten, 53 N. J. Eq. 573, 32 Atl. 2. We have not been able to discover any principle or any established practice by which, without any bill or petition filed against him, and without any subpoena to answer served upon him, the maker of such an obligation could be compelled to litigate its validity and effect in a court of equity. No doubt, if the plaintiff in error had appealed to the chancellor from the proceedings of the receiver or of the master, who might be deemed an assistant to the receiver (as was done in Doane v. Insurance Co., 43 N. J. Eq. 522, 11 Atl. 739, and 45 N. J. Eq. 274, 17 Atl. 625), and as all persons thinking themselves aggrieved by the proceedings of such receivers may, under the statute, appeal, the jurisdiction of the court would have attached to his complaint, and the chancellor's decision thereon would then have possessed the...