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v. Blanchard, 35 Ill. App. 487; Insurance Co. v. Miller, 39 id. 640; Morgan Park v. Gabon, 35 id. 652; Palmer v. Ford, 70 Ill. 369; Insurance Co. v. Storig, 137 id. 65; Insurance Co. v. Walsh, 54 id. 164; Insurance Co. v. Pierce, 75 id. 426; Morris v. Tillson, 81 id. 607.
Assessments, to be binding, inust be properly laid and for a proper purpose, and if not, a failure to pay them will not work a forfeiture or suspension. Niblack on Mutual Benefit Societies, secs. 277, 279, 280; May on Insurance, secs. 67, 557; Tobey v. Russell, 9 R. I. 58; Matter of People's Fire Ins. Co. 9 Allen, 319; Biddle on Insurance, secs. 936, 938; Insurance Co. v. Gruse, 49 Mo. 329; Bacon on Benefit Societies, sec. 377; Underwood v. Legion of Honor, 66 Iowa, 134; Insurance Co. v. Borden, 57 Me. 286; Insurance Co. v. Turner, 53 id. 226.
In making an assessment the managers act ministerially, and not judicially, and no presumption arises in favor of the regularity of the proceedings. Insurance Co. v. Gruse, 49 Mo. 329; Niblack on Mutual Benefit Societies, sec. 280; Thomas v. Whallon, 31 Barb. 177; Insurance Co. v. Fuller, 14 id. 373; Insurance Co. v. Schmidt, 19 Iowa, 502.
Mr. CHIEF JUSTICE CRAIG delivered the opinion of the court:
This is an appeal from a judgment of the Appellate Court affirming a judgment of the circuit court of Lee county, wherein Edward B. Knight recovered from the Farmers' Mutual Fire Insurance Company of Palmyra, Lee county, Illinois, judgment for $2464.10 on a policy of insurance. In the circuit court a jury was waived and a trial had before the court, and after the evidence was introduced various propositions of law were submitted by the respective parties and passed upon by the court. But it will not be necessary to set out in this opinion those propositions and the ruling of the court upon them, as the questions involved have been narrowed down to a small compass, and will be found stated in appellant's
brief, as follows: "The chief question to be determined in this case is as to whether the said last assessment was a valid one, and in determining whether it was valid or not there are two questions to be decided. One is as to whether the company had power to levy the assessment, and another is as to whether, assuming that the company had not such original power, the appellee, Knight, was estopped from setting up such a want of power. The appellant claims that, in the first place, it had such power under its charter, and in the second place, that the appellee is estopped from denying such power."
The appellant corporation was organized under a special act of the legislature, approved February 15, 1865. (1 Private Laws of 1865, p. 647.) The first section provides that C. B. Thummell and twelve other persons therein named, "their associates, successors and assigns, are hereby created a body corporate, by the name and style of the Farmers' Mutual Fire Insurance Company of Palmyra, in the county of Lee, and by that name shall have perpetual succession, and may sue and be sued, may make all by-laws, rules and regulations that shall be necessary and convenient for the government of the said corporation, not inconsistent with the constitution or laws of the United States nor of this State, and generally do all and singular the matters which to them lawfully appertain to do for the well being of said corporation and the management of the affairs thereof." Section 2 provides: "That said corporation shall not hold any property except what may be absolutely necessary for the transaction of their corporate business, or such as shall be taken in security for or in payment of debts, nor shall any by-laws be repugnant to this instrument, the constitution of the United States or of this State." Section 3 provides "that the power of this association shall be vested in thirteen managers." Section 4 provides "that each insurer in or with the company shall
be a member thereto during the term of his or her policy, and no longer." Section 5 provides: "And the members shall, at such general meetings, pass all by-laws, rules and regulations necessary for the well governing of the affairs of the corporation, or vest the power so to do in the board of managers." Section 6 provides that the president and managers shall have full power, on behalf of said corporation, to make insurances against loss by fire on houses, barns or other buildings; on goods, wares and furniture; on live stock, hay, grain and other agricultural products; on barns, stacks, etc. Section 7 provides: "It shall be lawful for said company to employ and invest all moneys received by them, and the profits thereof, in purchase of any ground rents or mortgages, or any loans or stocks of the United States or of this State; and no money shall be drawn from the funds of the said company for the purpose of making dividends or dividing profits, or for other purposes than first to defray the current or incidental charges of the corporation, and then for the purpose of such damages as any member of said company or insurer therein may justly be entitled to; and when the just demands of any insurer in said company or member thereof shall exceed the amount of its available funds on hand, such sums as shall be necessary to pay the same shall, without unnecessary delay, be assessed by the board of managers on insurances, each member to pay in proportion to the amount he has insured, and publish the same; and all and every of the members of the company shall pay into the hands of the treasurer his, her or their proportionable rates within thirty days after such publication aforesaid; and if any member shall refuse or neglect to pay, as aforesaid, for the period of sixty days, his, her or their policy shall become suspended until payment shall have been made, and shall, notwithstanding, be liable to said rates pursuant to his, her or their covenant or agreement.”
Under the authority of the charter the company adopted certain by-laws for its government, article 7 of which provides: "For ordinary farm risks the premium shall be at the rate of three dollars per thousand on the amount insured, with three dollars to cover the additional expense of examination and policy; and the liability of the assured to assessment to pay losses and expenses shall be the amount of insurance named in the policy. Each policy shall be what is called perpetual."
On the 10th day of August, 1892, Edward B. Knight, the appellee, applied to the company for a $4000 policy on certain property by him owned. The application contained the following: "That if a policy of insurance is issued to him upon the above described property he will faithfully abide by and observe all the conditions, rules, regulations and orders of the company contained in its charter and by-laws, and promptly pay, whenever called upon, his just share of the assessments made for the payment of losses by fire and lightning incurred at any time by any member of the company."
Upon receiving the application a policy was issued, which contained the following: "This policy witnesseth, that E. B. Knight having become a member of the Farmers' Mutual Fire Insurance Company of Palmyra, Lee county, Illinois, and having deposited with the treasurer of said company the sum of $15, is hereby insured by the said society for the sum of $1000, upon the following described property, situated in said Lee county: (Here follows a description of the property.) In consideration of above obligation of the said company the said Knight binds himself, and his heirs, executors, administrators and assigns, to comply with the constitution, rules, regulations and by-laws of said company."
On the 25th day of April, 1893, at a meeting of the board of managers of the company, it was ascertained from an examination of the books of the treasurer that there was a balance of $447 due one Johnson on a loss,
and due the secretary of the company for money ad-
"Mr. E. B. Knight, Jr.-Your assessment is $10 on $4000 of insurance, to pay the loss of H. B. Johnson and to create a surplus fund to pay future losses. Rate of assessment, one-fourth of one per cent. By order of the board of managers. Please pay promptly at the Dixon N1. Bank. The bank stamp will be a receipt for payment.
ELLWOOD HUGHES, Sec."
"Date, June 8, 1893.
Appellee, upon receiving the notice, refused or neg lected to pay the assessment, and about sixty days after the first notice a second one was given to him, but he still declined to pay until the 19th day of October, when he offered to pay the assessment. This was, however, the day after his property was destroyed by fire, and it is claimed on behalf of the company that on account of the failure of appellee to pay the assessment, the policy, at the time of the loss, was suspended. On the other hand it is claimed that the assessment being so much in excess of the amount the company was authorized to raise, the assessment was void, and appellee was under no obligation whatever to pay the amount, upon notice or otherwise.
Under section 7 of the charter a member of the company is required to pay an assessment within sixty days after receiving notice, and a failure to make payment within the time specified works a suspension of the policy. As appellee therefore failed to make payment of the assessment within the time prescribed, if the action of the board of managers in making the assessment was authorized by law, then it is clear he could not recover. Whether