Rix v. Mutual Insurance

20 N.H. 198 | Superior Court of New Hampshire | 1849

Gilchrist, C. J.

The defence set up by the company in this ease, is first, that the plaintiff, by omitting to pay an assessment that was ordered by the directors in 1842, amounting to $22.58, ceased, from thirty days after the time appointed for the payment, to have his property insured during the period of his default. This default continued at the time of the destruction of his property, on the 2d day of November, 1844.

This defence is founded upon a clause in the 5th section of the act of incorporation, which provides that “ any member neglecting to pay his annual assessment, within thirty days from the day appointed for such payment, shall cease to have his property insured until the day on which he pays,” &c.; and the question is, whether the default of the plaintiff to pay the assessment in this case is within the provisions of that clause.

The 5th section referred to provides that every person who shall become a member of the company, by effecting insurance therein, shall, before he receives his policy, pay into the treasury such a per cent, on the property insured as the directors shall require, and annually thereafter such sum as may be required by the directors, not exceeding the original sum paid in. Then follows the provision upon which the defendants rely, that “ any member neglecting to pay his annual assessment within thirty days from the day appointed, shall cease to be insured,” &c.

The first section of the by-laws requires each individual, on effecting an insurance, to “ make payment into the treasury by note, given for such per centum on the property insured as the directors shall require; the same being intended to cover the amount of risk during the term of insurance, and to be received as security and payment in advance of all such annual assessments as may thereafter be made on such insurance; on which note, a part, not exceeding three per cent., at the discretion of the directors, shall be paid immediately,” for purposes indicated, “ the balance to be called for at such times as the directors deem requisite for the payment of losses or other expenses.” The second section of the by-laws provides that if a member fails to pay such assessments as shall from time to time be made upon this balance of his deposit note, according to the provisions of the first section, he may be required to pay the whole of his deposit note, with costs, &c.

Now the case finds that the plaintiff failed to pay the assessment that was made in 1842, upon his deposit or premium note. He was, therefore, liable, by the terms of the by-law that has been recited, to be called on to pay the whole of the note. This is all the penalty that is provided for such default, unless it can be shown that this assessment upon the premium or deposit note is the same thing with the assessment named in the act of incorporation.

It would seem that it is not. The act of incorporation requires that the assured, before he receives his policy, pay into the treasury such a per cent, upon the property insured as the directors shall require.

The by-laws, section 1, require the assured to pay into the treasury, by note, given for such per centum on the property insured, as the directors shall require.

The policy recites, that the plaintiff has secured to the company the sum of $301, being the amount of the deposit or premium, and had bound himself and his heirs to pay such sums as might be assessed pursuant to the act and by-laws.

It is quite evident that the note for $301 was received by the directors, as and for the per centum required by the act to be paid by the assured before receiving his policy. It is equally evident that the call for the payment of a portion of that note, in 1842, was not an annual assessment, named in the 5th section of the act.

This assessment is something wholly distinct from the per centum required to be paid before receiving the policy, and is additional to it; and it is for the default to pay this annual assessment, and not the per centum required before receiving the policy, that the penalty is imposed in the act, of ceasing, during the default, to be insured, and the additional penalty of a forfeiture of the delinquent’s right to the capital stock, if the default continues for a year.

The act contemplated that the directors might, in addition to the per centum required before receiving the policy, make annual assessments to meet the various contingeneies of the company. The proceedings of the company under the act were designed, perhaps, to avoid the necessity of these annual assessments, by requiring the first deposit to be in the form of a note, sufficiently large to cover the probable losses that the company might sustain for the period limited by the policy; the payment of the note to be required only as fast as the money should be required, unless the delinquency of parties should demand an earlier collection of the whole sum secured by it.

The by-laws, therefore, describe the note as “ being intended to cover the amount of risk during the term of insurance.” They further describe it as “ to be received as security and payment in advance of such annual assessments as may thereafter be made on said insurance.”

Whether the company, by taking a note so described, would be precluded from making any annual assessments at all, or whether they might make them in the event of the deposit notes proving insufficient to cover the losses and expenses of the company, it is not necessary to determine.

But when it is considered that the by-laws are part of the contract, and that they acknowledge the reception of the note by the company, in express terms, to be payment in advance of future possible annual assessments, it may safely be held that such assessments, not exceeding the amount of the note, must, as against the company, be taken as paid by the note. The assessments, eo nomine, are paid; the power of making them and of enforcing their payment as assessments, can exist no longer, and the company are restricted to the security they have expressly recognized as payment of those assessments in advance. It is difficult to find plausible ground for contending that the remedy provided for enforcing the assessments can exist while their payment is expressly admitted, or, in the face of such admission, for contending that the note is merely collateral. Jaffrey v. Cornish, 10 N. H. 505.

But even conceding a doubt upon this point, the burden would still be upon the company to show that the money by them called for, and by the plaintiff left unpaid, was the annual assessment provided for in the act, and not a mere instalment of the balance due upon the deposit note, before they could insist upon the penalty attached to the delinquency whieh the act describes.

This, as we have seen, they fail to do. On the contrary, it clearly appears by the case to have been an assessment upon the note that remains unpaid by the plaintiff, and the only penalty is that which the by-laws provide, — the immediate collection of the whole sum secured by it, with costs.

The notice that was given by the plaintiff to the president of the company, that the property insured had been lost, appears to be open to no other objection than that it contained an invitation to the company to assist in measures for determining the cause of the fire. The rules of the company require nothing more than that notice be given to one of the directors, or other officer named, that the loss has happened. This was done, and the act is not impaired by being accompanied with another that was foreign to the purpose. Act of Incorp., sec. 6.

Insurance was effected upon the plaintiff’s house and sheds, to the amount of $1,200; furniture therein, $250 ; on his barns, $250 ; on his barn and shed on the meadow, $250 ; and on his hay and grain therein, $400. The word “ therein” may refer to the barn and shed on the meadow, or it may refer to all the barns and other buildings named, capable of containing hay and grain. It is immaterial to the determination of this case which construction is given to the policy. If the whole of the hay and grain, in all the buildings named, is insured, and the loss is equal to the sum insured, the plaintiff is entitled to recover that sum. But there is no principle of construction by which the sum insured on all the hay and grain can he so apportioned to the different parcels, that no greater sura can be recovered for the present loss than a sum that shall bear the same ratio to $400 that the value of the hay and grain, in the barn on the meadow, bore to the value of all the hay and grain in all the buildings named.

The value of the hay and grain being ascertained, the plaintiff will be entitled to judgment for the same, not exceeding $400, and the sum insured on the barn added.

Judgment for the plaintiff.