Parris v. Carolina Mut. Fire Ins. Co.

• Decision Date: 01 May 1912
• Citation: 74 S.E. 1010,91 S.C. 344
• Parties: PARRIS v. CAROLINA MUT. FIRE INS. CO. WETMORE v. SHUMAN.
• Court: South Carolina Supreme Court

74 S.E. 1010

91 S.C. 344

PARRIS v. CAROLINA MUT. FIRE INS. CO.

WETMORE v. SHUMAN.

Supreme Court of South Carolina

May 1, 1912

Appeal from Common Pleas Circuit Court of Spartanburg County; Ernest Gary, Judge.

"To be officially reported."

In the matter of J. H. Parris against the Carolina Mutual Fire Insurance Company. Action by S. M. Wetmore, receiver, against M. H. Shuman. From a judgment for plaintiff, defendant appeals. Affirmed.

Warren & Warren, of Hampton, for appellant. J. W. Nash, of Spartanburg, for respondent.

WOODS J.

In this action, brought by the plaintiff as receiver of Carolina Mutual Fire Insurance Company, the allegations of the complaint are that assessments were duly levied on the members of the company; that the defendant, one of the members, refused to pay his assessments of $28.67 and $21.33 and that, under section 1916 of the Civil Code, a lien exists on the property insured and the land on which it is situated to secure the payment of the assessments. The defendant demurred to the complaint, on the ground that it failed to state a cause of action, in that: "(1) The complaint does not allege that the said insurance company is and was solvent during the period of insurance covered by the policy covered in the complaint. (2) That the complaint does not allege that protection had been had by the insured during the period of insurance alleged in the complaint. (3) That it appears upon the face of the complaint that the said insurance company was and is insolvent." To sustain the demurrer, the defendant relies on the statute enacted February 23, 1910 (27 Stat. 695), which provides "That any fire insurance company doing business in this state, claiming a lien upon the property insured for the premium for such insurance, shall, upon an action being brought upon such lien, or to collect such premium, establish that protection had been had by the insured and that such company during the period of insurance was solvent." The Carolina Mutual Fire Insurance Company went into the hands of a receiver in 1908. All the obligations of the company and of its members then became fixed; the act of the court in taking charge of it through a receiver being for the purpose of enforcing these obligations and adjusting all the equities of the parties. Wetmore v. Scalf, 85 S.C. 285, 67 S.E. 298. The demurrer depends on the proposition that the General Assembly, by an act passed more than a year afterwards, changed the legal relations and the rights of the parties.

We think it perfectly clear that the statute has no application. Mutual insurance companies have no capital stock and no funds, except such as are collected on assessments to be immediately paid out. The members assume contractual obligations to each other; and when one member suffers a loss by fire, and an assessment is duly made, the obligation becomes fixed, and cannot be removed without a violation of the obligation of contract. The law under which the Carolina Mutual Fire Insurance Company did business, and which was a part of the obligation of the contract assumed by the defendant, was that he should pay the assessments duly levied; and that the company should have a lien on his property for such assessment. If the act purported to deprive the company of the right to collect assessments, or of the lien to secure...