Swing v. Engle

Kruse, J.: ■ The action is brought to recover upon the defendant’s liability as a policyholder in a mutual fire insurance company organized under the laws of the State of Ohio. The Supreme Court of that State dissolved the corporation, appointed the plaintiff a trustee for the creditors and stockholders, and directed him to collect the assessments made against the policyholders. While the judgment of the Ohio court is conclusive as to the necessity and amount of the assessment, it is not as to the defendant’s liability since he was not a party to the proceedings in the Ohio court. (Swing v. Mooney, 139 App. Div. 821.) The defendant challenges his liability and contends that if there ever was any, it is barred by the Statute of Limitations. He attempted to put in issue the material allegations of the complaint as well as to plead the Statute of Limitations. Strictly he did neither. The first answer, after making certain admissions and averments, concludes with statement: “ Avers that as to the other material allega [183] tions in said complaint, he has not any knowledge or information thereof sufficient to form a belief.” Such a denial is not good pleading. It necessarily leaves the question open as to what allegations the pleader regards material. But while the defendant could have been required to make his answer more definite and certain upon a motion made for that purpose before trial, I think the denials, although not strictly' in proper form, should not have been disregarded and the defendant’s evidence excluded. (Thompson v. Wittkop, 184 N. Y. 117.) Furthermore, the plaintiff did not stand upon the insufficiency of the denials in the answer, but proceeded to prove his case; and in any event, if necessary, the defendant should have been permitted to amend his answer. The defendant sought to show that the Ohio statute, upon which the plaintiff bases his claim, does not apply to the defunct corporation and that- no liability exists against him under the statute as it was when the insurance company was organized. The plaintiff was beaten upon that ground in a similar action brought in the State of Minnesota (Swing v. Red River Lumber Co., 105 Minn. 336); but whether the defendant should ultimately succeed upon that ground in this action need not now be determined as he was not permitted to make his proof upon that question. The original statute under which the corporation was organized seems to have been amended and provision made for corporations organized under the original statute to reorganize under the amended statute. Whether the corporation was so reorganized does not appear. Under the original statute the policyholder’s personal liability depended upon his making premium notes which were held to meet his contingent liability. Under the amended statute no such notes were required to make the policyholders liable. It does not appear that the defendant made such a note. If he did not and the company was not reorganized there would seem to be no liability; but, as has been said, that question need not now be decided until all the proof has been made. As regards the Statute of Limitations : The defendant instead of alleging that the cause of action had not accrued within six years prior to the commencement of the action, alleged that the defendant did not undertake or promise to pay the claim within that time. [184] 1 think this defense was insufficiently pleaded, but the plaintiff was not misled thereby and the motion to amend the answer should have been granted. There are other questions raised, but it is not necessary to consider them, as the views expressed necessarily result in a new trial. It may, however, be proper to suggest that the transcript of the proceedings of the Ohio court is not as complete and full as it should be. Among other things, the complaint or petition upon which the suit or proceeding is founded is not included, and it is not entirely clear whether the judgment was rendered in 1891 or in 1901. The plaintiff was defeated in a similar action in the State of Arkansas and the deficiencies in the transcript by which the Ohio judgment was sought to be established pointed out by the Supreme Court of Arkansas. (Swing v. St. Louis Refrigerator & Wooden Gutter Co., 78 Ark. 246.) The evidence upon thac question should not be left doubtful and uncertain. The record is also silent as to whether there was any by-law of the corporation concerning the publication of notice of assessments, as is provided by the original act as well as the amendatory act; or whether any other notice than that mailed to the defendant was given. That fact may have an important bearing upon the question of the Statute of Limitations. The judgment and order should be reversed and a new trial granted. Speing and Robson, JJ., concurred; concurring opinion for reversal by McLennan, P. J., in which Williams, J.,* concurred.