Case Name: Providence Fire and Marine Insurance Company v. John and James Murphy
Court: Supreme Court of Rhode Island
Jurisdiction: Rhode Island
Decision Date: 1864-09
Citations: 8 R.I. 131
Docket Number: 
Parties: Providence Fire and Marine Insurance Company v. John and James Murphy.
Judges: 
Reporter: Rhode Island Reports
Volume: 8
Pages: 131–133

Head Matter:
Providence Fire and Marine Insurance Company v. John and James Murphy.
It is not competent for the members of a mutual insurance company to avoid . payment of their just ratable assessments, by objections to the organization of the corporation or to the due election of its officers, so that they have fairly acted as a corporation and officers, defacto, with the acquiescence of the mem bers, and of the General Assembly as representing the public.
Assumpsit, to recover the sum of $16.25, being the amount of an assessment upon the deposit note of the defendants, made by the mutual department of the plaintiff company, out of which the defendants had taken a fire policy for thirteen hundred dollars on their building, tools and stock, on the fourth day of January, 1862. The case came, by appeal, from the Court of Magis trates of the city of Providence, to the Court of Common Pleas for the county of Providence, and was tried by said court at its December term, 1863, without a jury, before Mr. Justice Shear-man, who gave judgment for the amount of the assessment to the plaintiff. Erom- his report of the trial, it appeared, that the sole objection of the defendants to recovery rested upon a supposed want of sufficient proof that the plaintiffs, who were chartered and organized both as a stock and a mutual insurance company, had been duly organized as such, and that he had rejected proof, offered by the defendants, tending to prove that the plaintiffs had not been so organized. It appeared at the trial that the plaintiffs had been organized and acting under their charter, both in their stock and mutual departments, for several years ; and that, as a mutual office, they had issued, with many other policies, the policy to the defendants, and had received from them the premium note upon which the assessment sued for had been fairly made, to cover losses by fire sustained by the co-insured. Upon exceptions to the rulings of the Court of Common Pleas, in the above particulars, the defendants now brought the case to this court, for the correction of errors in said rulings.
Marlcland, with whom was Thurston, for the defendants.
Fames, for the plaintiffs.

Opinion:
Ames, C. J.
Questions similar in principle to those involved in this case, came before us, at the last term of the court, in the case of the National Mutual Fire Insurance Company v. Albert D. Yeomans (supra 25); and we then intimated, as we now decide, that it is not competent for the members of a mutual insurance company to avoid payment of their just ratable assessments, and of the losses to which they have by.contract subjected themselves, by acutely picking flaws in the mode in which their company has been organized, and as members of which they stand in the double relation of insurer and insured. It is quite enough for them, when called upon equitably to respond to their share of the losses under their contracts of insurance, that the company and its officers are such de facto, -under color of authority, and with their acquiescence as members, and that of the General Assembly as representing the public. If collateral issues could be raised in every suit for a petty assessment, going to tbe organization of the corporation, or to tbe election of each one of its acting officers, great delay and expense might be needlessly visited upon tbe corporation, and great loss inflicted upon other members, who rely, for indemnity, upon tbe prompt obedience of their associates to just calls made upon them for contribution.
Tbe exceptions taken to tbe rulings of tbe Court of Common Pleas are overruled, with costs.