Swing v. H. C. Akeley Lumber Company
| Decision Date | 14 August 1895 |
| Docket Number | 9329-(198) |
| Citation | 64 N.W. 97,62 Minn. 169 |
| Parties | JAMES B. SWING, Trustee, v. H. C. AKELEY LUMBER COMPANY |
| Court | Minnesota Supreme Court |
Appeal by plaintiff from an order of the district court for Hennepin county, Smith, J., denying a motion for a new trial. Affirmed.
Order affirmed.
Walter C. Tiffany, for appellant.
The assessment was legal, just and equal. Plaintiff need not prove all the facts on which he allowed the losses for which the assessment is made. He need only show that sufficient claims for losses have been presented, which he allowed, to make up the sum for which he assessed the notes. The determination of the company, or, when it is insolvent, of its receiver, in receiving and allowing claims for losses and the determination of the company, or of its receiver, in allowing such claims are prima facie binding on its members. Sands v. Hill, 42 Barb. 651. There being no evidence that the assessment is excessive, it is valid and binding. Lehigh Valley Ins. Co. v. Dryfoos (Pa. Supreme Ct. April, 1887) 9 A. 262; Susquehanna Ins. Co. v Gackenbach, 115 Pa. 492, 19 W. N. C. 287, and 9 A. 90; People's Ins. Co. v. Babbitt, 7 Allen, 235. Defendant did not allege as a defense that a proper assessment was not made. If he intended to rely on such defense, he must have alleged and proved that the assessment was grossly excessive and that it did not require the assessment of such amount to pay the losses. Rheinhart v Allegheny Ins. Co., 1 Pa. 359; White v. Ross, 15 Abb. Pr. 66; New England Ins. Co. v. Belknap, 9 Cush. 140; Buckley v. Columbia Ins. Co., 83 Pa. 298. The receiver may assess a sufficient sum in the first instance to pay all liabilities and expenses, and in ascertaining such amount he is invested with a liberal discretion, which will not be interfered with unless abused. May, Ins. § 559; People's Ins. Co., Petitioners, 9 Allen, 319; Wardle v. Townsend, 75 Mich. 385, 42 N.W. 950; Jones v. Sisson, 6 Gray, 288; People's Ins. Co. v. Babbitt, supra; Susquehanna Ins. Co. v. Gackenbach, 115 Pa. 492, 9 A. 90; Com. v. Dorchester Ins. Co., 112 Mass. 146; Buckley v. Columbia Ins. Co., 92 Pa. 501. The question is not as to the amount of the assessment being excessive, but solely as to the amount realizable by the trustee as the proceeds of the assessment. Even if the assessment was arbitrary, unjust, unequal and excessive, plaintiff can recover, since he is trustee of the creditors and stockholders and holds all assets for them. Com. v. Massachusetts Ins. Co., 119 Mass. 45; People's Ins. Co. v. Groff, 154 Pa. 200, 26 A. 63. The assessment did not require confirmation by the court. Shaughnessy v. Rensselaer Ins. Co., 21 Barb. 605; Sands v. Hill, supra; Cooper v. Shaver, 41 Barb. 151. Evidence that premium notes had been canceled prior to the appointment of the trustee was improper. Davis v. Parcher, 82 Wis. 488, 52 N.W. 771.
James A. Kellogg, for respondent.
An assessment without regard to the just proportions of loss incurred during the life of the policies or to the amount paid thereon, though not requiring more than the face of the note, is unequal and invalid. Davis v. Parcher, 82 Wis. 488, 52 N.W. 771; State v. Monitor Fire Ass'n, 42 Ohio St. 555; York Co. Ins. Co. v. Turner, 53 Me. 225; People's Ins. Co. v. Hartshorne, 90 Pa. 465; American Ins. Co. v. Pressell, 78 Ind. 442; American Ins. Co. v. Schmidt, 19 Iowa 502. If the money received was applied to payment of previous losses or liabilities, plaintiff cannot recover. Koehler v. Beeber, 122 Pa. 291, 16 A. 354; Insurance Co. v. Brecheisen, 50 Ohio St. 542, 35 N.E. 53; State v. Monitor Fire Ass'n, supra. An annual deposit is but another name for an annual premium. Detroit Ins. Co. v. Merrill, 101 Mich. 393, 59 N.W. 661; York Co. Ins. Co. v. Turner, supra; People's Ins. Co. v. Hartshorne, supra; Davis v. Parcher, supra; Great Western Tel. Co. v. Burnham, 79 Wis. 47, 47 N.W. 373; Bowen v. Kuehn, 79 Wis. 53, 47 N.W. 374; American Ins. Co. v. Pressell, supra; Sunbury Ins. Co. v. Humble, 100 Pa. 495.
*T, C. J. [2]
The Union Mutual Fire Insurance Company, a corporation organized, under the laws of the state of Ohio, for the purpose of doing a mutual fire insurance business throughout the United States, on October 1, 1889, at Minneapolis, in this state, executed and delivered to the defendant its policy of insurance, dated on that day, and thereby undertook to insure the defendant against losses on its property there situated, in the sum of $ 10,000, for the term of five years. In consideration of such policy, and as a part of the same transaction, the defendant executed to such insurance company its premium note in the sum of $ 1,250, and then paid on such note the sum of $ 250, which was indorsed thereon. Such note was payable in such installments and at such times as the directors of the insurance company might assess and order for the losses and expenses incurred by it, pursuant to its charter and by-laws. The policy contained a provision to the effect that the assured might surrender and have the policy canceled, on giving five days' notice of cancellation, and have the unearned portion of the premium returned. The statute of Ohio under which such insurance company was organized provides that the premium note, on a cancellation of a policy in a mutual insurance company, shall be returned; but the assured must first pay his proportion of all losses which have actually occurred up to the date when the policy is received for cancellation. The defendant, on October 18, 1890, paid upon such note the further sum of $ 250, and on December 3, 1890, it surrendered its policy for cancellation; and it was so cancelled and entered of record by such insurance company, and the defendant credited on its books with the unearned premium supposed to be due on the policy; but the premium note was not returned.
On December 18, 1890, the insurance company was adjudged insolvent by the supreme court of the state of Ohio, and James B. Swing, the plaintiff herein, was appointed trustee by such court, to collect its assets and wind up its affairs. He accepted and qualified as such trustee, and was authorized by such court to levy a proper assessment on the premium notes held by the company and coming to the hands of the trustee, sufficient to meet the liabilities of the company and the reasonable expenses of winding up its affairs. Thereupon, the plaintiff, claiming to have assessed the premium note of the defendant for the sum of $ 750 (the full face amount thereof, less the payments), and payment thereof having been by defendant refused, brought this action to recover the same.
He alleged in his complaint, among other things, that such insurance company was duly authorized, under the laws of the state of Ohio, to transact its business throughout the United States, and duly authorized, under the laws of the state of Minnesota, to transact therein a mutual fire insurance business, and that he duly levied and made such assessment upon the defendant's note. The defendant denied these allegations, by its answer, and alleged that it surrendered its policy, which was canceled by the insurance company, and credit given to it on the books of the company. The cause was tried by the court, without a jury, which found, among other things, that the insurance company was not qualified to do a mutual fire insurance business in this state, for the reason that it was not fully organized and did not have the capital required by the laws of this state; that the only act performed by the plaintiff in reference to making an assessment, after the order of the court so to do, was to send notices to the maker of each premium note that he had been assessed to the full amount due on his note that no assessment was ever confirmed by the court, and that the supposed assessment in this case was arbitrary, unjust, and unequal; that the defendant had surrendered its policy, and was entitled to a surrender of its premium note before the plaintiff was appointed such trustee. Judgment was ordered for the defendant...
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