Court Opinion

ID: 3838736
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:07:44.534416+00
Date Added: 2024-06-11T07:40:25.519528
License: Public Domain

Rehearing denied January 8, 1929.                       ON PETITION FOR REHEARING.                              (273 P. 386.)
The original opinion was handed down October 2, 1928:270 P. 764. Plaintiff petitioned for rehearing, and assigns nine alleged errors in the original opinion. All of the alleged errors, *Page 19 
however, are based upon the contention expressed as follows:
"In other words our contention has always been that Section 6408, Oregon Laws, does not, as far as foreign mutuals are concerned, excuse or relieve limited liability policy holders from the liability to the assessment required and prescribed in sub. (3) of Section 6416, Oregon Laws."
Plaintiff seems to concede that mutual insurance companies organized under the law of this state may lawfully issue policies of insurance fully paid up. He denies this privilege or right to foreign mutual insurance companies though duly authorized to write policies in the State of Oregon. Plaintiff arrives at this conclusion by construing the language in Section 6408, Or. L., as limited to domestic corporations. The language referred to is as follows:
"Any such company may fix the contingent and mutual liability of its members for payment of losses and expenses by a uniform rule set forth in its by-laws and policies and such mutual liability shall not be less than twice the amount of the usual advance assessment written in the policy; provided, however, that companies which have accumulated in the regular course of the business, assets of not less than two hundred thousand dollars, of which not less than one hundred thousand dollars is net cash surplus over and above all the requirements of this act shall have power, subject to the approval of the insurance commissioner, while in that condition, to adopt by-laws limiting the liability of its policy-holders to the amount it may specify in its policies, and the power to issue policies with such limitation of liability to continue only during the time such corporation or association is in such financial condition; provided further, that every such corporation or association must print upon its policies such by-laws as will define the liability of a policy-holder." *Page 20 
It is the contention of plaintiff that "such company" refers only to companies organized in Oregon. It might be truthfully said that the word "such" refers to Section 6399, Or. L., and following sections, all of which refer in a general way to companies organized under the laws of Oregon. All of these sections, however, including Section 6408, are made applicable to foreign mutual companies by Section 6420. We cannot adopt the argument of plaintiff without doing violence to the language of the statute. Said Section 6399 is a part of Section 23, Chapter 203, Laws of 1917. Section 6408 is Section 23-i. Section 6824 is 23-u. These sections are all subdivisions of the same section in the statute as it was originally enacted in 1917. They must all be read together. All the sections are made to include foreign mutual insurance companies by said Section 6420. We can find no justification at all for not applying the provisions in Section 6408 to foreign mutual insurance companies. The language of the statute is:
"The insurance commissioner of the (this) state upon receipt and examination of such statement and certificate and upon satisfying himself of the correctness thereof and of compliance with the laws of this state applicable as shown by this act shall issue to such corporation or association a certificate of authority granting it full power to transact business under this act."
By the terms of Sections 6408 and 6420 defendant insurance company is authorized to write insurance policies for cash premiums. Such insurance companies are thereby authorized to make a valid contract to issue a policy of insurance for a definite sum paid to it without the power or right *Page 21 
to levy any assessment for any future liabilities during the term of that policy. The language of the statute limits the power of an insurance company to write such policies while it maintains the assets and surplus described in said Section 6408. If its assets and surplus should be depleted below the requirements of the statute the insurance company could no longer issue valid policies for cash premiums. As long, however, as it maintains the integrity of its assets and surplus it can continue to issue binding contracts. It having been duly authorized to issue such a policy of insurance, that policy would not be voided by a subsequent depletion of the assets and surplus. A contract of insurance valid when issued does not become invalid because the company issuing it subsequently becomes insolvent. The further argument advanced by plaintiff is sufficiently met in the original opinion, to which we adhere.
Rehearing denied.