Catoctin clarion. [volume] (Mechanicstown, Md.) 1871-1940, 1903-02-05
Insurance Decision.

In the Court of Appeals the Mutual In
surance Company in Baltimore County, VS..
Martin l.. Jean. on an appeal taken by the
company, the Court of Common Pleas of
Baltimore having decided adversely to the
company. the judgment Of the lower court
was affirmed.
The suit was to cnforoe payment Of assess.
ments upon premium notes, the annual in
terest on which notes at SIX per cent had
been paid regularly up To March l, 1900.
Their assessments varied from 164 per
cent upon all notes dated before January l.,
| 1897, to per cent upon all notes dated be-
tween January LIST and April /, 1899, These
| assessments were made to meet an indebted
ness of $3.50 which had been arcumulat
| ing since 1887 In the lower count the de-
PENDANT offered two prayers, the one covering
the main point of the defense, being 1.-The
want Of legally sufficient evidence to show
| any valid assessment by the directors, bind
ing upon the defendant" Both prayers
were granted and the plaintiff excepted to
| this ruling and took an appeal
| The decision of the higher court was based
upon the failure of the company to comply
with the terms of its charter which requires
! the directors, "uheneeer u loss may occur
| which the company is liable to pay, to cause
| at tie nert m6etihg' al accurate statement to
be made of the proportion or sum 10 be con.
| trbuted by each member to make good such
loss and to notify The members of the same
and to proceed after 30 days to collect the
same. The by laws OF the company provide
| for the carrying out of this method of appor-
tioning HE amount due from each policy
holding member of the company.
The decision set forth the fact that the
company is what its title declares it to be, q
mutual insurance company. Each member,
to the extent of his premium note, insures
every other member who was such when he
became member or who becomes, and con.
! tinues TO be such. during his own member
| Ship and he is in turn insured by every such
member to the extent of his premium note.
| The simple, inherent and imperative chaIac-
| teristlcs of this contract are mutually and
and equality.
The appellee commended that the assess
mcnt made was invalid for three reasons:
1st That he was called upon to contribute
to the payment of losses of more than S22
600 incurred before he became Il member.
ID. That even if he We're liable for such
losses this assessment subjects him to liza
bility much g. cater than his just proportion.
3d. That IN making the assessment the di-
rcctors departed from the method prescribed
by the charter
The third reason provided the grounds for
a decision adverse to the company, in brief
AS follows:
That the directors had not determined at
the first meeting after each OF the several
losses that brought about an Indebtedness,
sought to be met by the special assessment
at issue, proportioning TO each member the
amount due and collecting the same, else no
such Indebtedness could have arisen that
failure to do so destroyed the mutually of
the contract and that such deferred assess.
mcnt must necessarily omit from obligation
to pay, all those members who have in the
meantime ceased to be such. THIS is a wrong
to the continuing members, nor Can that
wrong be rghted by including in the assess
ment those who have become members since
the loss occurred, since it is equally wrong
to them TO subject them to losses incurred
year or even day before they became mem,
hers.
That the directors departed from the meth
I'd prescribed by the charter, which resulted
in discharging large numbers of members
who have ia the meantime left the company
without paying their proportion of losses,
which proportion was. by this assessment
imposed upon the present members.
The main point in the decision Is, that
Mutual Fire Insurance Companies must ap
portion their losses to the membership as
the losses occur, and forthwith collect the |
same by special assessment, provided any
fixed annual assessment that is regularly
laid and collected, fails to fully meet the loss,