Dewey v. Davis

LyoN, 0. J. In the actions by the receiver to recover the forty per cent, assessment on the premium notes which came to his hands, we hold that the Oshkosh Mutual Fire Insurance Company' is what its name imports, a mutual insurance company, and nothing else, and hence that each policy holder in the company is a member thereof and subject to all the incidents which result from such membership, whether the premium be paid in cash or a premium note given therefor. Such being the relation of the policy holders to the company and to each other, it is entirely clear that each member is bound by the laws which control the organization and operation of the company, and can assert no rights against the company or its members unless the same are given by such laws. No right to recover an unearned premium on the termination of a policy is given by statute, except it is provided in sec. l'946¿i, S. & B. Ann. Stats., that at the request of the insured the company shall cancel the policy and return the unearned premium. Art. XY of the by-laws gives the company the right to cancel any policy, and requires it, in case it does so, to return the unearned premium. The policies in these cases contain stipulations for a return of unearned premiums in the cases above mentioned, and in those only. The plaintiff is not entitled to any unearned premium, unless he has brought himself within the above [503] provisions. Certainly be has not done so. His policies were not canceled at his request, neither were they canceled by the corapány, but by operation of law. Both the company and the plaintiff were passive, and the action of the court, and that alone, worked the cancellation thereof. There is another reason equally as conclusive why the plaintiff cannot recover such unearned premium. The premium notes constitute the only fund in the hands of the receiver out of which to pay claims against the insolvent company, and we are aware of no law which authorizes an assessment of those notes to pay unearned premiums on policies, whether the premium was paid in cash or by note. The statute only authorizes assessments to pay losses and expenses accruing during the period of the insurance. As was said by the supreme court of Massachusetts in considering a statute similar to ours in the case of Comm. v. Massachusetts M. F. Ins. Co. 119 Mass. 45: “ The liability to assessment is measured by the amount of the just claims for 'losses for which the company is then responsible. Neither this nor any other provision of the rules or of the contract authorizes an assessment for the purpose of paying the value of unexpired policies or unearned premiums.” See, also, Comm. v. Massachusetts M. F. Ins. Co. 112 Mass. 116; Vanatta v. N. J. M. L. Ins. Co. 31 N. J. Eq. 15; Sinnissippi Ins. Co. v. Taft, 26 Ind. 240; Mayer v. Attorney General, 32 N. J. Eq. 15; State ex rel. Atty. Gen. v. Manufacturers' M. F. Ins. Co. 91 Mo. 311; Great Falls M. F. Ins. Co. v. Harvey, 45 N. H. 292. The above cases are cited by Mr. Sutherland, on the question under consideration, in his brief in Atlas Paper Co. v. Seamans, post, p. 504, decided herewith, They sustain, more or less pointedly, the rule above stated. By the Court.— The order appealed from is reversed on the appeal of the receiver, and affirmed on plaintiff’s appeal, with directions to the circuit court to disallow all of the claims.