Wardle v. Cummings

• Decision Date: 03 July 1891
• Court: Michigan Supreme Court
• Parties: WARDLE v. CUMMINGS.

49 N.W. 212

86 Mich. 395

WARDLE v. CUMMINGS.

Supreme Court of Michigan

July 3, 1891

Appeal from circuit court, Ionia county; VERNON H. SMITH, Judge.

George H. Cagwin, for appellant.

C B. Wardle, in pro. per., (Davis & Nichols and Thos. F. McGarry, of counsel,) for appellee.

MCGRATH J.

Wardle as receiver of the Home Mutual Fire Insurance Company of Ionia, Clinton, and Montcalm Counties, recovered judgment upon an assessment made by order of court to liquidate accrued indebtedness, and defendant appeals. The defendant company was incorporated February 5, 1879, under Act No. 82 of the Laws of 1873, for the purpose of insuring property in cities and villages exclusively. Section 1 of said act, as amended in 1881, is as follows: "Section 1. Any number of persons, not less than seven, may associate together and form an incorporated company for the purpose of mutual insurance of the property of its members against loss by fire or damage by lightning, which property to be insured may embrace school-houses, literary and grange halls churches, agricultural societies' buildings dwelling-houses, barns accompanying out-buildings, and their contents, farm implements, hay, grain, wool, and other products, live-stock, wagons, carriages, harnesses, household goods, wearing apparel, provisions, musical instruments, and libraries, being upon farms as farm property, or dwellings, accompanying out-buildings, and such other buildings as are specified in this section, that constitute detached risks in villages and cities, and their contents, as the charters and by-laws of said companies may provide, and belonging to members of said companies." In 1877 an act to amend the act of 1873 "by adding one new section thereto, to stand as section 22, providing for the organization of Mutual Fire Companies, to insure property in villages and cities exclusively," was passed and approved March 29, 1877, and is as follows: "Sec. 22. Companies heretofore organized in this state, or which may organize or reorganize hereafter, for the purpose of mutual fire insurance of the property of its members, confined exclusively to cities and villages, may under this act insure any and every class of buildings and contents in cities and villages; such risks being duly classified according to the degree of hazard, as shall be determined by said companies, and which shall be set forth in the charter or by-laws of such companies, and not inconsistent with the constitution and laws of this state: provided, that the class of companies set forth in this section shall not insure farm property, and, except as provided in this section, shall be governed by all the provisions of the act to which this is amendatory." Said act provides for the supervision of companies formed under it by the commissioner of insurance; and section 9 of the act makes it the duty of the commissioner, in certain contingencies, "to serve a notice upon the officers of such mutual company, requiring them, at the expiration of sixty days from the date of such notice, to discontinue the issuing of policies, and proceed to wind up its business, unless within that time the directors of said company shall collect assessments and pay such losses and debts." The act contains these further provisions: "Sec. 15. If any insurance company organized, or to be organized, under this act shall not, within sixty days after the commissioner of insurance shall have given the notice required by section nine, pay up and discharge all outstanding claims against such company, it shall be the duty of the commissioner of insurance to file a petition in the circuit court for any county where such company has transacted business, either in vacation or term-time, stating that the sixty days within which such company was required to proceed to wind up its business have expired, and that there are outstanding claims against such company; a copy of which said petition shall be published for three successive weeks in a public newspaper printed in such county, or, if no newspaper is published in such county, then such notice shall be published in any paper published nearest the office of such company." "Sec. 17. At any time after the publication required by section fifteen of this act, the commissioner of insurance may appear in said court, in person or by counsel, and move for the appointment of a receiver for said company, and the said company may also be heard, and upon such hearing the report of such company filed in the office of the commissioner of insurance shall be conclusive evidence of the facts therein stated, and of the liability of such company, unless such company shall show that they have since paid and discharged the liabilities; and if, upon the hearing thereof, it shall appear to such court that the statements in such petition are materially true, the said court shall appoint a receiver for such company, who shall be, and is hereby, empowered to take possession of all books and papers and personal property of said company." On the 30th day of April, 1884, the commissioner filed a petition in the circuit court for the county of Ionia, under section 15, aforesaid, setting forth fully the happening of the contingency contemplated by section 9 aforesaid, averring the publication of notice as required by said section, the expiration of the 60 days named in said section, and praying for the appointment of a receiver. This petition was published as required by the act; and a copy of the same, together with the notice entitled in said court, that said commissioner would, on the 26th day of May following, move for the appointment of such receiver, was personally served upon the president and secretary of the defendant company. On the 26th day of May, 1884, plaintiff was appointed receiver by said court. In February, 1885, the receiver filed a petition setting forth the liabilities of said company, asking leave of the court to make an assessment, and praying the advice and counsel of the court in relation thereto; and thereupon a hearing was had, and an order entered authorizing said assessment. An assessment was accordingly made, and notice thereof published as required by the act. It is contended that the act is unconstitutional, and the proceedings in the appointment of the receiver and in making the assessment are void, for the following reasons:

1. That the petition filed in the circuit court under section 15 was not verified, but the statute does not require its verification, nor does the act require that it shall contain either a prayer for relief or process. It asks for no preliminary order; and it has frequently been held that in the absence of any statute or rule requiring it, a bill in chancery...