66 N.J.L. 392 | N.J. | 1901
The opinion of the court was delivered by
The declaration in this case consists of three counts, the first and second being special and the third common. The defendant has filed a single demurrer to the first and second, the validity of which is the question now before us. If either count is sufficient against the causes specified by the defendant, the demurrer fails.
The second count sets forth the incorporation of the Mill-ville Mutual Marine and Fire Insurance Company, by an act of our legislature, approved March 8th, 1859, and found in Pamph. L., p. 144; the provisions of its charter, that persons insuring with the corporation should thereby become members thereof during the period they remained insured, and before receiving a policy should deposit their promissory note for such sum of money as should be determined upon by the directors, such note to be paid at such time and in such manner as the by-laws might determine; the provisions of the by-laws, that assessments might be made on such notes for losses and money borrowed for the purpose of cashing losses, which assessments should include incidental expenses, expenses of collecting assessment and uncollectible claims, and that notice of such assessment should be given by publication, &c. (stating the mode); that, on a bill filed in Chancery for that purpose, the said company was proved to be insolvent, and Thomas Whitaker was appointed receiver thereof on September 28th, 1885; that, before such appointment, the defendant was the'holder of eight policies of fire insurance in the company, and had given .to the company therefor eight
Under the decision in Meley v. Whitaker, Receiver, 32 Vroom 602, these facts are, in substance, sufficient against every objection specified in the causes of demurrer respecting this count, except the first and last.
The first objection is that the making of these promissory notes was ultra vires, the city having no authority to make the same, or to become a member of a private corporation, and under this the defendant urges (1) that the charter of the insurance company permits only natural persons to become members of it; (2) that municipalities -are not authorized, without express sanction, to issue commercial paper; (3) that they may not incur obligations maturing beyond the current taxing year, and (4) that paragraph 19 of article I. of the constitution, which prohibits cities, &c., from loaning their credit to any corporation, and from becoming, directly or indirectly, the owners of any stock of any corporation, would be violated by upholding these notes of the defendant city and its membership in the insurance company.
Literally interpreted, every clause, in the company’s charter might be said to indicate that only natural persons of the male sex could become members, but such cannot have been the legislative intention, and .there appears no reason for denying to this charter the rule of construction embodied in section 9 of the act relative to statutes (Gen. Stat, p. 3194),
The premium notes now in suit do not possess that quality of commercial paper which has given rise to the expression of judicial doubt respecting the implied power of municipal corporations to issue it. They are mere evidences of indebtedness, not negotiable so as to give the transferee any right greater than that of the original holder.
We have no law which restricts municipal obligations to those maturing during the current taxing year, nor is there anything in this case showing that the obligations expressed by these notes did not mature during the taxing year' in which they were issued, for the maturity of the obligation is quite different from the arithmetical calculation by which its amount is ascertained.
The defendant’s objection respecting the general power of the municipality and the constitutional prohibition, may also, we think, be satisfactorily answered.
The city charter (Pcmph. L. 1866, p. 116) empowers the city to erect and maintain a city hall, school-houses and such other public buildings as may be necessary in the city. As incidental to the power thus granted, the city acquired the right to contract for indemnity against loss by the burning of such building; and it almost inevitably follows that this right could be exercised by insuring upon the mutual plan, for the fire insurance companies created by our legislature prior to 1866 were generally organized on that basis. Insurance by the city in this particular company has also in its' favor a presumption arising out of the fact that the legislature had located the company in the city limits. The scheme of mutual insurance in such associations does not fasten upon the members any liability which municipal corporations may not, with reasonable safety, assume, for the limit of obligation is always fixed at the time the insurance is obtained, and is rarely enforced beyond what would be charged for insurance on the non-mutual plan.
We therefore conclude that the legislature intended to confer upon this municipality power to enter into such contracts as these notes express, and that there is no reason to thwart that intention.
The last objection specified in the causes of demurrer is that the method of determining the amount of the assessment is not set forth with sufficient certainty, and is so vague as to be meaningless.
The count alleges that the by-laws required premium notes given for policies to be assessed for losses and expenses. This implies that the losses.and expenses sustained during the life of the policies should be distributed proportionately upon the notes given for those policies. The count distinctly avers that the assessment was so levied. This certainly is not meaningless, but intelligibly points out the method of making the assessment. True, the pleader has not stated the several sums necessary to be considered in testing the accuracy of the assessment, although he seems to have made an attempt to do so, but, if such detail be required by the rules of correct pleading,
We think the plaintiff is entitled to judgment on the second count, and if he will discontinue his suit upon the other counts, permission will not be given to the defendant to withdraw its demurrer and plead, and the plaintiff may have his damages assessed and final judgment entered.