Koehler v. Beeber

Opinion, Me. Justice Williams : The defendant in the court below when he took his policy and gave his premium note became a member of the company. As such he had a right to attend the meetings of its members and to vote at the elections of directors. If the directors were extravagant, incompetent, or careless of their trust, they were nevertheless his representatives in the management of the affairs of the company and their acts done within the scope of their authority bind him. He should have investigated the situation of the company and the character of the management before giving his note and subjecting himself to contribution toward the payment of salaries that bore no relation to the value of services actually rendered, and to the payment of losses on outstanding risks when the income of the company was rapidly falling off. But having become a member of the company and given his premium note he is entitled to insist that his liability shall not be extended beyond his contract. He is liable to contribute to losses arising after he became a member of the company but not to those which had occurred before : The Peoples Fire Ins. Co. v. Hartshorne & Co., 90 Pa. 465. The statement filed by the company as the basis of its right to execution against the insured, in this case, purports to give the amount of the premiums received and the manner in which the moneys of the company have been expended, between May 14, 1880, and October 8, 1881; but, whether the money or any part of it was paid upon losses arising before the liability of Koehler began, or was properly devoted to the payment of claims to which he was liable to contribute, does not appear. [299] It may be, for all that can be learned from the statement, that the moneys shown to have been received from premiums were applied to the payment of demands for losses sustained and adjusted long before the note of Koehler was given, and that the moneys so wrongfully appropriated would have been amply sufficient to meet all just demands upon the company arising after that time. In this particular the statement is defective. It does not show that the amount received was appropriated to the payment of demands arising after Koehler became a member of the company and gave the note upon which the assessment is levied. The exhibit of the expenditures is sufficiently detailed in all respects except as to the date of the claims to which the money was appropriated. It should be amended also in its statement of the amount of money received, by separating that received from premiums from that which was derived from other sources. When so modified it will support an execution, as it now stands it will not. The judgment entered in the court below is affirmed but the award of execution thereon is reversed.