Court Opinion

ID: 6410466
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:52:18.172532+00
Date Added: 2024-06-11T15:51:21.383676
License: Public Domain

Bigelow, J.
The contract, on which the plaintiffs seek to recover in this action, is a policy of insurance issued by the Bowditch Mutual Fire Insurance Company to the defendant, by which he agreed to pay certain annual premiums. To entitle the plaintiffs to recover, therefor, by an action in their own name, they must show that this contract has been transferred to them, so that they are substituted to all the rights and powers originally belonging to said Bowditch Mutual Fire Insurance Company under said policy. There is no evidence in the case by which any assent to such transfer can be properly inferred from any act of the defendant, either as an individual, or as a member of the corporation by which the policy was originally issued. On the contrary, so far as the defendant has said or done any thing on the subject, it would seem that he had refused to sanction any such transfer. His silence and omission to act at all cannot be evidence of assent. He had a right to rest on his original contract, and was not bound to assent or dissent to any acts of others by which they sought to change his rights and liabilities under it. The plaintiffs are bound to show á contract of insurance subsisting between them and the defendant. This can be proved only by mutual affirmative acts. Mere absence of dissent on the part of the defendant will not prove a contract.
The plaintiffs, however, rely on St. 1852, c. 6, by which they were incorporated, and on the votes of the several companies therein named, accepting said act, as having substituted them in *547the place of the Bowditch Mutual Fire Insurance Company, and authorized them by implication to assume the policies issued by said company, and enforce the obligations thereby created, without any individual assent on the part of the defendant. But this position cannot be maintained, upon any reasonable and just view of the provisions of the statute. The manifest purpose of the act was to create a new corporation, to be constituted and made up, in the first instance, of members of the three preexisting corporations therein specified. As the new corporation were expressly made subject to the general laws regulating mutual fire insurance companies, no person could become a member unless he was insured by the plaintiff corporation. Rev. Sts. c. 37, § 30. To effect the object contemplated by the statute, therefore, it was necessary to transfer the policies, or a portion of them, issued by the three companies separately, to the new corporation, so that the contract of insurance should subsist, not with the company with which it was originally made, but with the new corporation. In this mode only could members of the old corporations become members of the new, under and by virtue of their existing policies. The plaintiffs were to become an entirely new contracting party with holders of policies previously issued by the three corporations separately; and the latter were to be discharged from their obligation and liability on their contracts of insurance to such of their members as should become insured by the plaintiffs. The result would be therefore to effect a material change in the rights and liabilities of each holder of a policy. To carry out the provisions of the act, it was necessary, not only to make a new party to each contract and absolve the original insurer therefrom, but also to make members of the old corporations members of a new corporation, with greatly increased risks and a consequent increased liability to assessments.
Such being the purpose to be effected by the statute, the question is, whether the legislature intended by its provisions to consummate this assignment to the plaintiffs of the contracts originally entered into by the three corporations, thereby substituting a new party therein, and changing the legal rights of *548parties under their contracts, by the mere force and operation of the statute itself, without the assent of those whose interest? were to be most materially affected by the proposed transfer. That the assent of the separate corporations was required, is not denied. It is expressly provided that “this act shall not take effect until it shall be accepted by the members of said corporations respectively, at meetings called for the purpose.” This provision was doubtless intended to accomplish a double object. It was designed not only to secure the corporate assent of the three companies, but also the individual assent, as manifested by their votes, of a quorum°of the members of the several companies, to the transfer and assignment of these policies to the new corporation. By assenting to the act and accepting its provisions, each member would ratify the new contract which it was intended thereby to create between the new corporation and the members of the old companies. He would be estopped, by his vote, to deny the existence of such new contract, and could not afterwards call in question the regularity or validity of the transfer of his contract to the plaintiffs, or their right to enforce its obligations in their own name. There can be no doubt that, by virtue of the statute, every member of either of the three corporations who voted for the acceptance of the act, as well as every member who otherwise signified his assent to the adoption of his policy by the plaintiffs under its provisions, entered into a new contract of insurance, by which the plaintiffs assumed the obligations and succeeded to the rights of the company with which the contract was originally made.
But further than this the provisions of the act do not go. It does not purport to transfer the contracts of parties without their assent. On the contrary, it expressly provides that “ this act shall not affect the legal rights of any person.” Of these legal rights, none can be plainer or more sacred than the right of a party to stand upon his contract as it was originally made, and to insist that no change shall be made, without his assent, in the parties with whom he contracted, or in the terms and conditions of his contract. It certainly requires no argument to prove, that the discharge of one contracting party and the sub *549stitution of a new one, and the creation of additional and more extensive liabilities, without the consent of a party to a contract, do materially affect his legal rights, and are a serious infringement on the sanctity of contracts. The legislature, in the original act incorporating the Bowditch Mutual Fire Insurance Company, reserved no right to exercise any such power, nor was any such authority conferred on said company by the legislature, nor reserved to them by the terms of their contract with the defendant. It follows, as a necessary consequence, that the defendant, never having directly, nor by implication, assented to the transfer of his contract of insurance to the plaintiffs, comes precisely within the proviso contained in their act of incorporation. His legal rights are not affected by its provisions. His contract has never been transferred. It remains, as it was originally made, a contract with the Bowditch Mutual Fire Insurance Company, and the plaintiffs fail to show any right to maintain an action upon it in their own name to recover premiums due ihereon.
It may be added, that the ground assumed by the plaintiffs, that the statute incorporating the plaintiffs operated ex proprio vigore to transfer contracts of insurance, made with other companies, to the plaintiffs, without any assent on the part of the persons assured, so as to substitute the plaintiffs in the place of the original insurers, involves, to say the least, a very questionable exercise of power by the legislature. Such an enactment would most seriously affect the legal rights of parties under their contracts, and tend to impair their obligation.

Plaintiffs nonsuit.