Stockley v. Riebenack

Opinion by Beebeb, J., In the policies which the defendant secured from the plaintiff, he agreed, in the seventh clause indorsed' on them, to pay any assessment that might be levied upon them for the mortuary or expense funds. As this company was a mutual one, this clause must be held to mean that he agrees to incur the liability which the nature of the mutual company imposes on all its members. What that liability is will be found well stated [173] in People’s Fire Ins. Co. v. Hartshorne, 90 Pa. 456, as follows: “The essential principle on which mutual companies are organized is that each member will pay his proportionate share of expenses incurred, and losses which happen during the period of his membership.” The twelfth clause indorsed on the policies was intended to provide a method by which the defendant could surrender them and escape any further liability. It provided that the defendant could have his policies discontinued at any time upon notice and surrendering them, and “ at the same time paying all indebtedness to date.” Considering the nature and extent of his indebtedness as a member of a mutual insurance company, we are bound to conclude that this clause means that he must pay his proportionate share of all losses and expenses incurred up to the time of the surrender of the policies. When the defendant wrote his affidavit of defense, he had before him the plaintiff’s statement in which it appeared that the suit was brought to recover certain assessments, levied by a court of competent jurisdiction after the appointment of the receiver, to pay losses which occurred while he was a member of the company. He must be presumed to have known that, as these assessments sued for were levied by the court after the appointment of the receiver, they were conclusive both as to their necessity and amount and could not be questioned in either respect in this collateral proceeding: Fire Ins. Co. v. Boggs, 172 Pa. 91. Under the construction which we have given to the policy, it was his duty to pay his proportionate share of the losses which had occurred to the company up to the time of his withdrawal. That proportionate share was fixed as to the exact amount, by these assessments levied by the court two months after the surrender of the policies. The averments in the statement to the effect that these assessments were levied upon the defendant’s policies to pay his share of the losses occurring while he was a member were vital and material to the plaintiff’s case, and ought to have been denied in the affidavit if defendant intended to defend on the ground that they were' not so levied. As he has not denied them, they must be taken as true. The only defense set up was that he has surrendered his policies on a certain date “ and at the same time paid all indebtedness to date.” It is not ne [174] cessary to cite authorities to show that this averment of payment is not sufficiently precise and definite to prevent judgment. He does not say how much he paid, not in what manner he paid. One who says in his affidavit that he has paid the debt, without more, simply expresses a legal conclusion from facts not disclosed. He should set forth the facts so that the court can tell whether he has paid. “It has never been held enough to prevent judgment, to say, ‘I paid the debt,’ or ‘ I do not owe the claim:’ ” Snyder v. Powers, 37 Leg. Int. 387. We are not prepared to sustain the defendant’s contention that a member of a mutual insurance company who “ has duly withdrawn his membership may be free from liability for assessments made after his withdrawal to liquidate losses incurred during the life of his policy,” but even if we did, we do not think that the record in this case shows it to be one to which such a rule applies. The cases relied on to establish this rule are Akers, Rec’r, v. Hite, 94 Pa. 394, and Matten, Rec’r, v. Lichtenwalner, 6 Pa. Superior. Ct. 575. In Akers v. Hite, it was said that contracts of insurance were like others in that they could be rescinded by mutual consent, and that many mutual insurance companies inserted stipulations in their policies that they should be void for certain acts of omission or commission by the insured, but it was added at the same time that “ when avoided, the rights and liabilities of the member are ended, except his liability for debts already incurred.” Whilst in that case it was held that the agreement between the insured and the company relieved the defendant from further assessment, even though it appeared that when the withdrawal took place he did not pay his full proportionate share of losses incurred at that time, the effect of the decision was limited to the facts found in the special verdict. The Court say: “ This case must be disposed of on the facts in the verdict, not outside. Whether there are facts which make all who were once members liable to assessment for indebtedness created before the cancelation of their contracts, does not appear, they are not in the verdict.” That the result would be different where it does appear that members are liable to assessment for indebtedness created before cancelation is evident from the case of Susquehanna Mut. F. Ins. Co. v. Mardorf, 152 Pa. 22, where it appeared that a suit liad been brought, after the expiration of the [175] policy, to recover an assessment made after its expiration, in which, a verdict had been rendered for the defendant. In a subsequent suit to recover still another assessment, made after the expiration of the policy, the court below held that the first suit was a final adjudication of all questions between the parties upon the application and policy in question. In reversing the court below it was said: “We are quite unable to agree to this doctrine. By the terms of the policy it was subject to assessment for all losses occurring while it was in force, whether they were made during its life or after it had expired. The first action was brought upon one assessment, made, it is true, after the policy expired, but only to recover the assessment made for losses then adjusted. Certainly this would not preclude subsequent assessments made to cover other losses not then adjusted, if they occurred during the life of the policy.” By the construction \ye have put on the two clauses in this present policy it appears that this defendant was liable to assessment for indebtedness created before the cancelation. When it was canceled, it was in effect the same as an expired policy, liable to pay its share of losses up to date of cancelation, which had to be paid before defendant could be fully released, although of course he would have been released from liability for future losses from the date of the cancelation. Our own case of Matten v. Lichtenwalner, supra, is an authority against the defendant’s contention that his withdrawal released him from liability for assessments made after his withdrawal to liquidate losses incurred during the life of his policy. In that case it appears that the only part of the charge of the court below objected to was as follows: “If you find that the proper authorities of the company did cancel her policy, then you will say that she is relieved from liability under its terms, provided it is proved by the defendant that all the losses that had occurred down to the date of that cancelation had been paid, i. e., realized by the company. When I say paid I do not mean that the company had actually passed the money over to the person or persons who had the loss, but that the company had realized from its members, including Mrs. Lichtenwalner, what they were bound to pay to satisfy all those losses. If the defendant has not shown that she, Mrs. Lichtenwalner, had paid to the company her share of all the losses that were incurred down to the period when [176] the policy was canceled, if it was canceled, then you will say that she still remained liable, notwithstanding the action of the directors in attempting to give her free and cancel her policy.” It will be seen that the court below imposed on the defendant in that case the duty of proving, not what she had paid to the directors as fixed by them as a consideration for the withdrawal and cancelation, but that she had paid her share-of all the losses that were incurred down to the period when-the policy was canceled. This was the rule laid down bjr the-court below which we approved. As we have said, that case is, in effect, a decision against the contention of the defendant-in this case. Judgment reversed, and record remitted to the court below, with direction to enter judgment against the defendant for such sum as to right and justice may belong, unless other legal or equitable cause be shown to the court below why such judgment should not be so entered.