Court Opinion

ID: 8191760
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:14:49.214019+00
Date Added: 2024-06-11T16:40:38.114383
License: Public Domain

BaRNes, J.
Tbe question involved on this appeal is whether tbe defendant bad tbe right to pay tbe expenses incurred out of tbe assessment made in 1912. Tbe trial judge held that tbe policy-holders were entitled to tbe entire proceeds of tbe assessment without deduction for expenses. In tbe final analysis the answer must depend upon tbe construction placed upon the by-law quoted in tbe statement of facts, and tbe case was decided on this basis. Tbe by-law is susceptible of tbe construction given it by tbe circuit court, but we do not think it is tbe correct one. Tbe reasonableness of *667the expenses paid is not called in question. Tbe defendant was obliged to incur expenses in soliciting insurance and in adjusting losses and for other legitimate purposes. These expenses had to be met in some way, and the only practical way to meet them was by making an assessment to cover them. Under the construction adopted by the court it might well be that they could not be paid at all. We are of the opinion that the application, the policy, and the by-law all contemplate that indebtedness should not be carried over from one fiscal year to another and that the expenses should first be paid out of the assessment made and the balance used to pay losses, and that the policy-holders should be entitled only to such balance.
It was stipulated that of the expenses paid $174.55 was incurred during the year 1911. The record is silent as to what time of the year these expenses were incurred. . Under sec. 2 of art. IV of the by-laws attached to the policy, and presumably in force during and before 1911, the defendant was obliged to make its assessment in each year on the first Monday in October, which was the only assessment that could be made for the year and which was required to be made for “one full year’s losses and expenses.” In other words, the fiscal year ran from October 1st to October 1st. Presumably the directors followed this by-law in making the 1911 assessment. If so, the item of $174.55 must have represented expenses incurred after October 1st, and such expenses were properly and necessarily carried over to the year 1912. This by-law last referred to has been modified by the one first mentioned, which became effective January 1, 1912, but the fiscal year does not seem to have been changed. Whether it has been or not, if we indulge in the presumption that the officers have done their duty the expenses incurred after the 1911 assessment and during the year 1911 were properly payable out of the 1912 assessment.
By the Court. — Judgment reversed, and cause remanded with directions to dismiss the complaint.