Pink v. Highway Express, No. 48
| Court | United States Supreme Court |
| Writing for the Court | STONE |
| Citation | 62 S.Ct. 241,314 U.S. 201,137 A.L.R. 957,86 L.Ed. 152 |
| Docket Number | No. 48 |
| Decision Date | 08 December 1941 |
| Parties | PINK, Superintendent of Insurance of New York, v. A.A.A. HIGHWAY EXPRESS, Inc., et al |
v.
A.A.A. HIGHWAY EXPRESS, Inc., et al.
See 314 U.S. 716, 62 S.Ct. 477, 86 L.Ed. —-.
Messrs. M. F. Goldstein, of Atlanta, Ga., and Alfred C. Bennett, of New York City, for petitioner.
Page 202
Mr. Frank A. Hooper, Jr., of Atlanta, Ga., for respondents.
[Argument of Counsel from page 202 intentionally omitted]
Page 203
Mr. Chief Justice STONE delivered the opinion of the Court.
Petitioner, as Superintendent of Insurance of the State of New York, is the statutory liquidator of Auto Mutual Indemnity Company, an insolvent mutual insurance company, organized under the laws of New York. He brought this suit in the Superior Court of Georgia against respondents, who are residents of Georgia and policyholders in the company, to recover assessments alleged to be due by
Page 204
virtue of their membership in it. The Supreme Court of Georgia affirmed the judgment of the trial court, dismissing the petition on demurrers of the several respondents. 191 Ga. 502, 13 S.E.2d 337. We granted certiorari, 313 U.S. 555, 61 S.Ct. 1096, 85 L.Ed. 1517, because of the asserted denial by Georgia of full faith and credit to certain statutes and judicial proceedings in New York, under which the assessment was levied.
The relevant facts set out in the amended petition are as follows: The Indemnity Company, organized in 1932 under Article 10-B of the New York Insurance Law, Consol.Laws, c. 28, § 340 et seq., as added by Laws 1916, c. 13, was, on application of the Superintendent of Insurance, placed in liquidation by order of the New York Supreme Court on November 24, 1937. Upon further proceedings, pursuant to § 422 of the New York Insurance Law, as added by Laws 1932, c. 191, § 1, the court ordered, August 12, 1938, that each member of the Indemnity Company, during the year prior to November 10, 1937, should pay assessments in specified amounts aggregating 40% of premiums earned by the Company during that year. The order directed that the members show cause on a specified date why they should not be held liable to pay and why the Superintendent should not have judgment for such assessments. Pursuant to § 422 and the order, the Superintendent mailed notice of the order to each policyholder, including respondents. None of respondents entered an appearance. It is alleged that all 'were policyholders and members of the Company' during the year mentioned; that at the time when each purchased his policy and became a member there was in force § 346 of the New York Insurance Law, as amended by Laws 1923, c. 811, § 7, which under New York statutes and judicial decisions became a part of the insurance contract, binding upon each policyholder. Section 346 provides that every mutual insurance company 'shall in its by-laws and policies fix the contingent mutual liability of the members for the payment of losses and expenses not provided for by its admitted assets' to a spec-
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ified extent, and that 'all assessments, whether levied by the board of directors, by the Superintendent of Insurance in the liquidation of the corporation, or otherwise, shall be for no greater amount than that specified in the policy and by-laws'. It is further alleged that the assessment made against respondents was for their pro rata share of the 40% assessment levied by order of the court pursuant to the statutes of New York and the by-laws of the company, and was confirmed as to members, including respondents, by the order of November 17, 1938. The form of policy acquired by respondents is by reference made a part of the petition.
The Supreme Court of Georgia (191 Ga. 502, 13 S.E.2d 338), construing the amended petition as a whole, took its averment that respondents 'were policyholders and members of the company' to mean that they were members because they were policyholders. That construction has not been challenged and we adopt it here. The court accepted the allegations of the meaning and effect of the New York statutes and judicial decisions as correct, but held that respondents, none of whom was made a party to the New York proceedings by service of process, were not concluded by the New York orders and statutes on the question whether their relation as policyholders to the company was such as to subject them to liability.
Examining the contract embodied in the policies, the court found that although the name of the company contained the word 'mutual' the contracts of insurance were without any term or provision purporting to make the policyholder a member of a mutual company or to subject him to assessment. Each policy provided that the insured agrees that it 'embodies all agreements existing between himself and the company or any of its agents relating to this insurance.' Printed on the back of each policy but not referred to in the contract was a 'Notice to policyholders' that 'the insured is hereby notified
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that by virtue of this policy he is a member of the Auto Mutual Indemnity Company', and that 'the contingent liability of the named insured under this policy shall be limited to one year from the expiration or cancellation hereof and shall not exceed the limits provided by the Insurance Law of the State of New York', there being on the face of the policy no reference to any contingent liability or assessment or to any law providing for such. The petition does not make it clear where the policies were delivered to respondents, and the court held that in the absence of a showing to the contrary they were governed by Georgia law.
Applying to this state of facts the law and policy of Georgia derived from its statutes and judicial decisions, the court held that the relation between the insured and the company was that of contract, that the whole contract was embodied in the stipulations appearing on the face of the policy, and that it did not by its provisions make respondents members of the company or subject them to assessment in accordance with the laws of New York or otherwise. Petitioner challenges the judgment on the ground that it fails to accord to the New York orders and statutes the full faith and credit to which they are entitled under Article IV, § 1 of the Constitution.
While urging in brief and argument that all those who are shown to be members of the Indemnity Company are bound by the New York adjudication as to the necessity for and amount of the assessment, petitioner does not specifically urge that the New York proceedings have established the personal liability of respondents for the assessments which have been ordered. He could not well do so for the proceeding in the New York courts to determine what judgments should be entered against the policyholders, including non-residents, and the judgments actually entered, do not appear to have been made a part of the...
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