Warner v. Delbridge & Cameron Co.
| Decision Date | 31 July 1896 |
| Parties | WARNER v. DELBRIDGE & CAMERON CO. |
| Court | Michigan Supreme Court |
Error to circuit court, Wayne county; Joseph W. Donovan, Judge.
Action by Willard E. Warner, ancillary receiver of the Minneapolis Mutual Fire Insurance Company in Michigan, against the Delbridge & Cameron Company, to recover on a premium note. From a judgment entered on a verdict directed for defendant complainant brings error. Reversed.
C. E. Warner, for appellant.
E. E Kane, for appellee.
On the 3d of April, 1890, defendant applied for and received a policy of insurance in the Minneapolis Mutual Fire Insurance Company, and executed and delivered the following agreement On the 18th of December, 1890, an application was made by a policy holder, in the district court of Hennepin county, Minn., alleging the insolvency of the company, and praying for the appointment of a receiver, and the distribution of its assets among the creditors entitled thereto. On the 24th of January, 1891, a decree passed adjudging the insurance company insolvent, and appointing a receiver. On the 19th of May following, an order making an assessment of 50 per cent. upon all premium notes and policy obligations was made; but this order was subsequently set aside as illegal, and a petition was filed showing the financial condition of the company, and the necessity for an assessment; and February 3, 1892, an order was made authorizing an assessment of 100 per cent., or as much thereof as might be necessary to pay the claims which accrued against the said insolvent company during the time said policies were in force, to be levied upon the balance due upon each and all of said premium notes and policy obligations at the time of the appointment of a receiver for the insolvent company, in 1890. This order further directed that upon this assessment the receiver should credit and deduct the amount of any especial assessment theretofore made by the insurance company, and actually paid by the makers of the premium notes and policy obligations, and also the amount actually paid upon the assessment of 50 per cent. theretofore ordered by the court. The items included in this assessment of 100 per cent. were for losses, salaries, unearned premiums on cash policies, and miscellaneous claims. On the application of the complainant in the original suit, made to the circuit court for the county of Wayne, in chancery, setting forth the proceedings in Minnesota, complainant was appointed an ancillary receiver in the state of Michigan. This suit was brought against the defendant to recover, upon the premium note mentioned, the 100 per cent. assessment.
On the trial, the circuit judge directed a verdict for defendant, on the ground that the assessment was void, for the reason that it included an assessment for unearned premiums, acting upon the authority of Insurance Co. v. Merrill, 101 Mich 393, 59 N.W. 661. If this contract is to be treated as a Michigan contract, the holding should be sustained, unless it be held that the order making the assessment, made at the situs of the home company, is conclusive, not only as to the authority to make the assessment, but as to the extent of the defendant's liability. This question was recently before the court in the case of Mutual Fire Ins. Co. v. Ph nix Furniture Co., 66 N.W. 1095; and the conclusion was then reached that the decision of the court of a sister state is binding upon the courts of this state in all these respects. This conclusion was based upon the constitutional provision that full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state. Article 4, � 1. And an examination of the decisions of the federal supreme court led us to the conclusion that a stockholder of a corporation is so far an integral part of the corporation that, in view of the law, he is privy to the proceedings touching the body of which he is a member, and that a determination that an assessment upon the policy holders in a certain amount and for certain obligations of the company should be made was final and conclusive, and could not be attacked collaterally when suit was brought upon such assessment in another state. In reaching this conclusion, the question involved being a federal question, we felt ourselves bound by the determination of the federal supreme court in Hawkins v. Glenn, 131 U.S. 319, 9 S.Ct. 739, and Glenn v. Liggett, 135 U.S. 533, 10 S.Ct. 867. But since the decision of this court in Mutual Fire Ins. Co. v. Ph nix Furniture Co. the question has been again before the federal supreme court, and the doctrine of the cases upon which he relied for our decision limited; and in Telegraph Co. v....
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