Wardle v. Townsend

• Decision Date: 21 June 1889
• Court: Michigan Supreme Court
• Parties: WARDLE v. TOWNSEND.

42 N.W. 950

75 Mich. 385

WARDLE v. TOWNSEND.

Supreme Court of Michigan

June 21, 1889

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

Action by Clarence B. Wardle, as receiver, etc., against Gertrude Townsend, to enforce payment of an assessment levied to pay the debts of an insolvent insurance company. Judgment for plaintiff, and defendant appeals.

CHAMPLIN J.

Clarence B. Wardle was appointed receiver of the Home Mutual Fire Insurance Company of Ionia, Clinton and Montcalm counties This company was a corporation organized under act No. 82 of the Session Laws of 1873. The defendant took insurance in this company, and received fire-policies of the following dates: April 18, 1879; September 8, 1879; March 25, 1882 another one of the same date; and one August 25, 1882. The company had suffered loss which they neglected to pay; and on the 19th of February, 1884, the commissioner of insurance acting under the authority conferred by section 15 of said act, made an examination into their affairs, and found and determined that the company was insolvent, and took proceedings under the statute to wind up the business of the company. On the 20th day of April, 1884, the commissioner filed his petition, under section 15 of the act, and thereupon such proceedings were had that afterwards, and on the 26th day of May, 1884, the plaintiff, Clarence B. Wardle, was appointed receiver, and qualified. At the time he was appointed there were losses and liabilities of the company amounting to $22,000, not including the expenses of the receivership, and there were many suits pending to recover losses unliquidated and undetermined. Many former policyholders had left the county, and many others were entirely irresponsible, and of the others a large part had surrendered their policies. The receiver proceeded to assess upon all the members and persons insured in the company, an assessment for the purpose of paying the liabilities and expenses; and, in determining the aggregate amount which it was necessary to assess, the receiver took the advice of the circuit court, filing therein a petition in which the represented that the debts of the company, and interest on the same, amounted to about the sum of $25,000, not including some unadjusted claims on which payment may be enforced; that many of the debts were unliquidated, and it was impossible for him to know what would be paid on the same; that, owing to the way the books had been kept, there might be names in said books which should have been dropped from the same, by the surrender of the policies, on the sale of property or otherwise; that the assessment should be large enough to cover all contingencies, avoiding, if possible, the necessity of a second assessment, and the expense thereof, and that in his opinion $50,000 should be assessed to raise the said sum of $25,000, and that he believed such assessment would not yield more than the sum of $25,000, which belief was founded on the knowledge he had in regard to the accounts of the company and the condition of its affairs; that it was impossible to state what his expenses would be, or how long it would take to wind up the company, or how many policy-holders would pay or how many would contest their assessment. Upon hearing the petition ex parte, the circuit court made a formal order granting the prayer of the petitioner, and authorizing him to assess upon the policy-holders $50,000 for the purposes stated in the petition. Thereupon, in accordance with said act, and the order, the receiver did make such assessment. The amount assessed against each member of the company was in proportion to the amount of insurance of such member, and his interest in the company, in no case assessing any policies for losses which occurred while such policies were not a force, but holding members liable for all losses which occurred while they were members of such company. The circuit court found as a fact that, in the judgment of the receiver, after a thorough and careful examination of, and inquiry into, the affairs of the company, and after collecting from the most available parties individual assessments thereunder, the said assessments when collected to the fullest possible extent will no more than realize the amount required to pay the actual liabilities of said company, and the reasonable expenses of said receivership. In making the assessment, the receiver gave notice, as required by section 17 of said act, by publishing notices in the Ionia Sentinel, Clinton Republican, and Montcalm Herald, weekly newspapers printed in said counties, once a week for six successive weeks, wherein and whereby the aggregate amount assessed by said company was stated. The foregoing statement contains substantially the facts found by the court. The bill of exceptions contains only the defendant's requests for findings of law, and the findings of fact and law by the court.

Defendant's counsel requested the court to find the law as follows: " First. The act No. 82 of the Session Laws of 1873, entitled 'An act to provide for the incorporation of mutual fire insurance companies,' etc., in unconstitutional and void, for the following reasons: (1) The subject of the act embraces more than one object. (2) The object of the act is not expressed in the title. (3) It purports to authorize suits to be commenced in the circuit court for less than one hundred dollars. (4) It purports to authorize the service of process, and the bringing of suits, against the residents of other counties. Second. The assessment alleged to have been made by the plaintiff in this cause is excessive and void. (1) Because the act in question does not authorize the levying of an assessment for overlays. (2) Because, if it authorizes an assessment for overlays, the overlay covered by this assessment is grossly excessive, and therefore void. (3) Because the order of the court assuming to authorize such assessment, being ex parte, is void. (4) Because such assessment is made upon the basis that all persons insured, and members of said company at the time of each loss, were liable to assessment for all such losses, regardless of the fact that some of said policies had been surrendered. Third. The amount claimed by the plaintiff in his said declaration being less than one hundred dollars, judgment for costs cannot be rendered in favor of the plaintiff and against the defendant." The circuit judge found the following as his conclusions of law: "As to the first proposition of law submitted, I find it is not well taken; that the act referred to is not unconstitutional for any of the reasons stated. That the second proposition is not well taken; and the assessment was not, under the circumstances shown or admitted, excessive or void; and that the order to make the assessment could legally be made ex parte; and the assessment was made on a proper legal basis; and, further, the statute expressly authorizes costs to plaintiff, even though the recovery be less than one hundred dollars,-section 17 of the act referred to expressly providing that, 'upon such suit, said assessment shall be prima facie evidence of the regularity and correctness of all proceedings up to and including the assessment, and of the receiver's right to recover therein the amount assessed, with costs,"'-and he directed a verdict in favor of the plaintiff for $32.84, with costs of suit, to be taxed. There is no valid constitutional objection to the title of the act. A title to an act which reads, "An act to provide for the incorporation for mutual fire insurance companies, and defining their powers and duties," is sufficient to embrace, without particular mention, provisions for winding them up in case they neglect to perform their duties or exercise their powers. The examination by the commissioner of insurance, the appointment of a receiver, and the assessment of policy-holders to pay liabilities and expenses, are all necessarily incident to the object expressed in the title. There are no decisions of this court which give countenance to the idea that subjects so germane to the act of incorporation should be expressed in the title. Tolford v. Church, 33 N.W. 913; Attorney General v. Amos, 60 Mich. 372, 27 N.W. 571.

Nor is the body of the act in conflict with the constitutional provision that no law shall embrace more than one object which shall be expressed in its title. The object is to provide for the incorporation of mutual fire insurance companies, and to define their powers and duties; and each provision of the enactment has...