St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1895-08-15

COURT BELOW is SUSTAINED
Insurance COMPANY FAILED,
Out the Trustee Tried to Collect
the Full Amount of "a Pre-
MUM Note.

terday by Chief Justice Start in the
case of James B. Swing, trustee of
the Union Mutual Fire Insurance
company, of Cincinnati, insolvent,
appellant, against II. c. Akeley Lum-
Der company, respondent, in which
nearly every manufacturing town of
the state is interested to a greater
or less extent. The present case was
taken up as a test, and the result
determines the rights of a large
number of parties, and involves
about $25, 600 in notes given in Mime
sofa to the insolvent company.
1t appears from the opinion of the
court that the insolvent company
delivered to the defendant, Oct. 1,
1889, its policy of insurance for the
term of five years in the sum of $10,-
900, receiving in payment of the
premium thereon the defendants
note for $3.50, on which $3.50 was
then paid The policy contained a
provision to the effct that the as
sured might surrender and have the
policy Cancelled, and have the I'M
earned premium returned, on giving
five days notice for such purpose.
On. Oct. is, 1890, defendant paid an
additional $3.50 on the premium note,
and on Dec. 8 ensuing surrendered
the policy fir cancellation, and it
was then Cancelled by the insurance
company.
On Dec. IS, 1890, the insurance COM
pany became insolvent, and was so
adjudged by the supreme court of
Ohio, and James B. Swing appointed
trustee to wind up its affairs. The
trustee qualified, and in the course
of time brought suit against the de-
PENDANT for the $3.50 unpaid balance
of the premium note. The cause
was tried without a jury by the dis
trict court, which found, among 9TH
er things, that the defendant had
surrendered it's policy, and was en-
titled to it's premium note before
plaintiff herein was appointed trus-
tee, and that the assessment made
by plaintiff was arbitrary, unjust
and unequal. Judgment was ordered
for the defendant, and from an order
denying his motion for a new trial
the plaintiff appealed.
The only point in the assignment Of
error which the supreme court
thought necessary to consider, and
the only one decided, is the finding of
the court as to the assessment of de-
PENDANTS premium note. The COM
plant alleges that plaintiff, as trus-
tee, duly levied an assessment upon
defendants premium note for the
amount for which it was liable.
This the answer denied. The pres
ent opinion holds that the burden
was on plaintiff to establish this al
legation. He was only authorized by
the court appointing him to make a
proper assessment, and the amount
thereof was never determined by the
court, and the supposed assessment
was never confirmed by the court;
hence there are no Prescriptions in
favor of it, and the burden was on
plaintiff to prove that it was duly
and equitably made.
1t is held that the essential principle
upon which mutual insurance COM
panies are based is that each member
will pay his proportionate share of
the losses incurred during the time of
his membership and that he shall not
be required to pay any greater amount
thereof than his pro rata share, and
any assessment which violates this
principle cannot be enforced against
him.
The assessment in question violates
this principle. The evidence shows
hot f11 lafo
there was an assessment for losses
amounting to $6,961.29 sustained by the
insurance company before the defend
ant became a. member of it on Oct.
/, 1889, and for $7,771.80 losses incurred
after be ceased to be such member.
That during November, 1890, some six
ty-four policies were Cancelled by the
company for which it then held prem
ium notes amounting to more than
$4,000, which were then surrendered and
not assessed, although a large amount
of losses incurred during the member
ship of the makers of said notes re-
manned unpaid. Under the statute of
Ohio such makers were liable for their
proportion of said losses, and so con-
tinue liable to the same extent as de-
PENDANT after it's policy was Cancelled.
The company had no power to release
them from the obligation without pay
ment.
"It is quite apparent" says the opin-
ion, from the evidence, notwithstand-
ing the difference and evasive testi-
mony Of the secretary of the company
on this point, that the members here
referred to did not pay their full pro
rata share of the losses incurred dur
ing their membership"
In addition to these premium notes
amounting to some $4,000, like notes,
amounting to some $50, 600, making a
total of $4,000, were surrendered upon
cancellation of policies during Octo-
Der and November, 1890, none of which
were shown to have paid a proper