Vandalia Mutual County Fire Ins. v. Peasley

Me. Justice Bigelow delivered the opinion of the court. If the amended record of the proceedings of the directors’ meeting of February 16, 1896, was improperly excluded from the jury, it becomes immaterial to inquire whether the original record of the proceedings might properly have been admitted or not, hence we express no opinion in regard to it. The right of the directors of the company to amend their records when necessary, so as to cause them to show what they actually did when convened in session and acting as a body, does not seem to be contested by appellee’s counsel, and it can not, in our opinion, be successfully contested, since even the records of municipal corporations can be amended. County of Du Page v. Commissioners of Highways, 142 Ill. 610; Village of Gilberts v. Rape, 49 Ill. App. 418. The total amount of unpaid losses, as shown by the record at the time an assessment was made, was §1,456.15. To this should be added the other bills allowed, for printing, §1.85, also $25 for collecting the assessment, making the total liabilities of the company $1,483; and deducting from this sum the cash on hand left $1,098.36 to be provided for by the assessment, which at the rate fixed by the directors it was thought would amount to about $1,300. In the case of Farmers’ Fire Insurance Co. of Palmyra v. Knight, 162 Ill. 470, the court said: “ Where a loss occurs the managers may exercise a reasonable discretion in determining the amount necessary to be raised. There will always be more or less expense in the collection of an assessment, and there may be insolvent members, from whom collections can not be made. These, and other like matters, are proper to be considered by the managers in fixing the amount of the assessment.” We agree with the learned counsel for appellee, who say: “We think it clear that an assessment must be made in substantial conformity to the statute before a legal liability can arise to pay the assessment.” But we can not agree to the other proposition seemingly contended for, that before a recovery can be had on an assessment, actual proof of loss on which the assessment was made must be adduced. Proofs of loss are made by the assured to the company, and the directors stand for and are the only legal representatives of-the company, and in the absence of fraud or collusion, when they examine the proofs' of loss made by the assured and agree upon the amount of it, the record that "they make is conclusive against the members of the company. If this were not so, there could be little, if any, use of becoming incorporated. We are of opinion that the assessment was not unreasonable in amount and was legally made, and that the court erred in excluding from the jury the amended record of the proceedings of the directors’ meeting of February 16, 1896. .The amended record of the proceedings of the directors’ meeting of October 14, 1896, showed the unpaid losses to have been $389.82, and the cash on hand $16.38, and yet the assessment made was more than three times the amount necessary to pay all the liabilities of the company. We are at a loss to understand the object the directors had in view in making so large an assessment. If the purpose was to provide a fund for the payment of future losses, it is sufficient to say that the law under which the company was incorporated gives them no such authority. The only law authorizing the directors to make an assessment is section 12 of the act quoted, and language could not make plainer the fact that the authority given by the section to make assessments can only be exercised after a loss has occurred, and then.for the purpose only of paying the loss. This is further evident from section 13 of the law, which provides that in the notice to be given the members assessed, the amount of the loss, and the sum due from each member, as his share of it, shall be stated. The assessment was void, and the ruling of the court in excluding .the original and amended proceedings of October 14,1896, from the jury, was not error. Farmers’ Fire Insurance Co. of Palmyra v. Knight, supra. The defendant below offered to prove that after the first assessment was made, it caused the plaintiff to be notified of it, as required by law; but the court excluded the evidence, because no legal assessment had been proven, and defendant excepted. What particular facts defendant proposed to prove concerning the notice, what the notice contained, or when it was given,-does not appear from the record, and we are unable to determine whether it was sufficient to fix the liability of the plaintiff to pay the assessment or not, and hence we express no opinion about it. The burden of showing that plaintiff’s policy was suspended at the time of his loss rested upon defendant company, and since there was no controversy that plaintiff had not paid the assessment of February 16, 1896, the court should have allowed the defendant to prove that the notice of the assessment had been duly given the plaintiff, if it could do so; and because it did not, we think, under the circumstances, it was the fault of the court that defendant did not make an offer of the notice of the assessment, or a copy of it, and an offer to prove when and how it was served, and had the matters preserved in the bill of exceptions, as the better practice than the course followed. For the errors sustaining plaintiff’s objection to the introduction in evidence of the amended record of the proceedings of the directors’ meeting of February 16, 1896, and in refusing to allow defendant to prove that it served notice of the assessment on the plaintiff, as provided by law, the judgment is reversed and the cause remanded.