Stockley v. Schwerdfeger

Opinion by Oblady, J., It is averred in plaintiff’s statement, and is not denied in the affidavit of defense, that after the issuing of the policies to said defendant, the company issued over 200 policies to various persons insuring their live stock for various amounts .... upon some of which policies losses subsequently occurred. It is not alleged in the affidavit of defense that the sums paid by the defendant at the time of cancelation, January 13, 1898, and on March 1, 1898, embraced the assessments on the policies issued subsequently to those held by him. The assessments authorized by the decree of the court of common pleas of Dauphin county, as shown by the statement of claim, were for losses upon policies which were in force and outstanding at the date the defendant claims to have had his policies canceled. The plaintiff claimed for assessments upon all of the policies held by the defendant, and in entering judgment for the aggregate of assessments levied against the policies for losses prior to January 13, 1898, the defendant is not asked, in this judgment, to pay for losses on policies issued after that date. It is not stated how or by whom the policies were canceled, and for the reasons given in Stockley, Receiver, v. Riebenack, 12 Pa. Superior Ct. 169, the defendant is liable for the assessments of indebtedness created before cancelation. After it had been canceled, it was in effect the same as an expired policy, and was liable to pay its share of losses up to date of cancelation, and in fact these had to be paid before the defendant could be fully released. His withdrawal did not release him from liability for losses incurred during the life of his policies. He must pay his just share up to that time, and in this case the amount of the assessments and the necessity for making them are conclusively fixed by the decree of the court of common pleas of Dauphin county; Capital City Mut. Fire Insurance Co. v. Boggs, 172 Pa. 91; Matten, Receiver, v. Lichtenwalner, 6 Pa. Superior Ct. 575. To hold otherwise would open a wide door to legal or actual [292] fraud, as the officials of a mutual company upon payment of an inadequate amount could cancel policies on the eve of insolvency and wrest substantial assets from the grasp of a receiver, whose appointment might be made necessary by reason of their acts, and thus destroy the very protection assured by the mutual liability of policy holders for losses during their membership. The affidavit of defense was insufficient as to the amount for which the judgment was entered and the judgment is now affirmed.