Pink v. A. A. A. Highway Express

Decision Date16 January 1941
Docket Number13549.
Citation13 S.E.2d 337,191 Ga. 502
PartiesPINK, Superintendent of Insurance of New York, v. A. A. A. HIGHWAY EXPRESS, Inc., et al.
CourtGeorgia Supreme Court

Rehearing Denied Feb. 14, 1941.

Syllabus by the Court.

This suit was brought by Louis H. Pink, superintendent of insurance of the State of New York, jointly against A. A. A Highway Express, Inc., et al., the defendants being approximately twenty-five in number, seeking to collect from them assessments levied in New York against all members of Auto Mutual Indemnity Company, an insolvent insurance corporation, the defendants in this case being alleged to be such members. The defendants are residents of the State of Georgia, and one or more of them residents of Fulton County where the suit was instituted. The allegations of the petition were substantially as follows: The Auto Cab Mutual Indemnity Co. was incorporated under article 10-B of the Insurance Law of the State of New York on May 26, 1932 as a mutual automobile casualty insurance company. With approval of the insurance department of the State of New York, its name was changed on February 21, 1933, to Auto Mutual Indemnity Company, and is hereinafter referred to as the company. All provisions of the charter and amendment relevant to the issues in this case were attached as an exhibit. On the application of the superintendent of insurance of the State of New York, an order was made by the Supreme Court of that State placing the company in rehabilitation pursuant to Article 11 of the Insurance Law of that State, the order being duly filed of record. All sections of article 11 and all of the aforesaid order relevant to the issues in the case were attached as exhibits. The company being insolvent, it was placed in liquidation on that ground, by an order of the Supreme Court of the State of New York, made, entered and filed in the office of the clerk of the New York court on November 24, 1937, and all of that order relevant to the issues in the case was attached to the petition as an exhibit. The liquidation proceedings were entitled "In the matter of liquidation of the Auto Mutual Indemnity Company," and those proceedings are still pending.

Pursuant to section 422 of the Insurance Law of the State of New York, on February 4, 1938, which was within one year from the date of the entry of the orders of rehabilitation and liquidation, the superintendent of insurance filed in said proceedings a report setting forth the reasonable value of the assets of the company, its probable liabilities, and the probable necessary assessment to pay all allowed claims in full. That report being quite voluminous, it was not set out or attached as an exhibit, but petitioner promised to introduce it into evidence at the trial. Upon the basis of that report, pursuant to section 422, an order was made by the New York Supreme Court, on February 7, 1938, directing that an assessment of forty (40%) per cent. of premiums earned during the preceding year be levied against all members of the company, against whom an assessment might have been levied on November 10, 1937, the date of the commencement of the proceedings against the company. This order was duly filed, a copy of it being attached to the petition as an exhibit. The superintendent thereupon computed the amount of assessment due from each policy, and, pursuant to section 422 of the Insurance Law of New York, computed the amount of indebtedness of each member to the company apart from the indebtedness for assessment. These computations were attached as an exhibit, showing the names of the defendants, their residence, the numbers of their policies, the premiums earned, and the amount of assessment

for which such member was liable. On the basis of the report an order was made August 12, 1938, which, together with the petition, report and exhibits of the superintendent, was duly filed in the office of the clerk of the New York court, the order directing each member during the year previous to November 10, 1937, to pay the amount assessed against him to the superintendent of insurance. The order further directed that, failing to make such payments, the members were to show cause, on September 29, 1938, why they should not be held liable to pay such assessments, together with costs, and why they should not be held liable to pay any other indebtedness which they might owe the superintendent of insurance, and why the superintendent should not have judgment therefor. This order was attached to the petition as an exhibit. Pursuant to section 422 of the Insurance Law of New York, notice of this order was mailed to all of the members of the company, including each of the defendants in this case. None of the defendants appeared to show cause, nor have they made payment as directed. All of them were policyholders of the company during some part of the year before November 10, 1937.

A copy of the policy issued to each of the defendants was attached, being merely a form policy, but alleged to be the type of policy contemplated in the court's order of February 7, 1938, above referred to. While these policies provided that the insured should be entitled to "an equitable participation in the funds of the company in excess of the amounts required to pay all policy and other obligations," etc., and were headed or captioned "Auto Mutual Indemnity Company (a mutual insurance company)," they did not otherwise contain any reference to the laws of the State of New York, or to any particular law of that State, or to the charter or by-laws of the company, or to the policyholder as a "member," or to any liability for assessment. The policy declared that it embodied "all agreements existing between" the policyholder and the company, and mentioned nowhere that the assured would be liable for any assessment of any nature. It is true, on the back of the policy, but not in the face of the policy itself, there were printed paragraphs entitled, "What to do and what not to do in case of accident," "Safety code reminders," and "Notice to policyholders," each containing sub-paragraphs, and under the last-named heading the policyholder was notified that he was a "member" of the Auto Mutual Indemnity Company, and entitled to vote at all meetings of the company, and stating when and where those meetings would be held, 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." It was further alleged that at the time each of the defendants purchased his policy and became a member of the Auto Mutual Indemnity Company there was in force a statute of the State of New York, which (as the petitioner alleged), under the statutes and court decisions of New York, became a part of his contract binding upon him, to wit, section 346 of the Insurance Law of the State of New York, which provides: "The corporation 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; but such contingent liability of a member shall not be less than an amount equal to twice the amount of, and in addition to, the cash premium provided for in the policy, except that a corporation which has amended its charter to provide for the transaction of additional kinds of insurance may amend its by-laws to provide that the contingent mutual liability of a member shall not be less than an amount equal to, and in addition to, the cash premium provided for in the policy. Every member shall be liable to pay, and shall pay his proportionate part of any assessment which may be laid by the corporation in accordance with law and his contract on account of losses and expenses incurred while he was a member, if he is notified of such assessment within one year after the expiration of his policy. 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 or by-laws." The names and addresses of the defendants, the numbers of their policies, the period for which each was alleged to be liable to assessment, and the amount of judgment prayed against each, was set forth in the petition. There was also attached a copy of a portion of the by-laws to the effect that "the members of the corporation shall be the policy holders herein," in accordance with the provisions of the corporation's charter.

By amendment the plaintiff alleged that the action presents a common right to be established by the plaintiff against the several defendants named in the petition, and that it is proper that a court of equity determine the whole matter in one action; and that by so doing a multiplicity of actions will be avoided, speedy and effectual relief will be granted, and unnecessary costs will be obviated.

By further amendment the petitioner averted that he would present to the court on the trial of the case the acts of the legislature of the State of New York, referred to in the petition, duly authenticated by the Great Seal of that State and would present the records and judicial proceedings referred to, duly attested under the seal of the court, all as is provided by section 38-627 of the Code of Georgia, and by the United States Revised Statutes, section 905, 28 U.S. C.A. § 687. Petitioner contended that said public acts, judicial proceedings, and records of the State of New York are entitled to and should receive full faith and credit in the courts of this State and in this proceeding, as is specifically provided in section 38-627 of the Code of Georgia...

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  • Hayes v. Irwin
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    ...of the state where the contract is entered into, governs the rights of the parties in the case sub judice. Pink v. A. A. A. Highway Express, Inc., 191 Ga. 502, 13 S.E.2d 337 (1941). This is the applicable rule when the issue is solely a matter of interpretation of the contract; however, whe......
  • Frank Briscoe Co., Inc. v. Georgia Sprinkler Co., Inc.
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    ...but views the place of making as where the contract is delivered, not where it is executed. Pink v. AAA Highway Express, Inc., 1941, 191 Ga. 502, 13 S.E.2d 337, 344, 137 A.L.R. 934, aff'd, 1941, 314 U.S. 201, 62 S.Ct. 241, 86 L. Ed. 152; see also, The Scotland, 1881, 105 U.S. 24, 29, 26 L.E......
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2 books & journal articles
  • Insurance - Maximilian A. Pock
    • United States
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    ...671 (1992). 75. Id. at 763, 417 S.E.2d at 673. 76. Id. 77. Id. at 767, 417 S.E.2d at 674-75. See also Pink v. A.A.A. Highway Express, Inc. 191 Ga. 502, 13 S.E.2d 337, affd, 314 U.S. 201 (1941) (auto policy: contract is made where policy is delivered); Iowa State Travelers Mut. Ass'n v. Cald......
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