Case: KORN AND WISEMILLER v. THE MUTUAL ASSURANCE SOCIETY AGAINST FIRE ON BUILDINGS OF THE STATE OF VIRGINIA
Abbreviation: Korn & Wisemiller v. Mutual Assurance Society
Decision Date: 1810-02
Docket Number: 
Citation: 6 Cranch 192
Volume: 10
Reporter: United States Reports
Court: Supreme Court of the United States
Jurisdiction: United States
Parties: KORN AND WISEMILLER v. THE MUTUAL ASSURANCE SOCIETY AGAINST FIRE ON BUILDINGS OF THE STATE OF VIRGINIA.
Judges: 
Pages: 192–202

Head Matter:
KORN AND WISEMILLER v. THE MUTUAL ASSURANCE SOCIETY AGAINST FIRE ON BUILDINGS OF THE STATE OF VIRGINIA.
The separation of Alexandria from Virginia did not affect existing contracts between individuals. The insurance upon buildings in Alexandria did not cease by the separation, although the company could only insure houses in Virginia. The obligation of the insured to contribute, does not cease in consequence of his forfeiture of his own insurance by his own neglect. All the members of the company are bound by the act of the majority. No member can of hU obliga,tions 83 31'?h» tó the rules of the society.’
ERROR to the circuit court of the district of Co-h'rtflhf'a-v sitting at-Alexandria,
This was a motion,-in the court below, in the name o? the principal agent of the Mutual Assurance Society judgment against Korn Wisemiller for 116 dol lars, “ being the amount due from them for a half quota under a declaration for insurance made to the society with § per cent, interest thereon from the 1st day of June, 1805.”
. , The court below gave judgment according to the m0tl0rlJ and the• defendants brought their writ of error.
The principles of the society are declared to be, “ That the citizens of this state may insure tbeir buildjn„3 agajnst the losses and damages occasioned accidentally by fire; and that the insured pay the losses and expenses, each his share, according to the sum insured.”
This society was incorporated -by the legislature of Virginia, by an act passed on the 22d of December, lyg^f, entitled “ An act for establishing ar Mutual Assuranee Society against fire on buildings in this state.”
The act provides'that the rules and regulations vrhich should be concluded upon by a majority of the subset ibers at the first meeting, should be bindittg Oh all those who should insure their property in that society; and that k majority of the society might át any. time alter and amend the rules and regulations as they should iudge necessary. I hat certain premiums should be agreed upon’to. bé paidjoy the insured to .constitute a fund to pay losses. And that if that fund should! not be sufficient, a u repartition” among the insured should be made, and each should pay on demand of the cashier his share according to the sum insured and thé fate of hazard. ' It also provides that the property insured should be bound for the payment, and for that purpose might be sold. That such quotas when called for should be advertised, and when any: person should neglect to pay his quota, his insurance should cease until it should be paid. If the property should be sold, the purchaser was to become a subscriber-jn lieu of the vendor. The subscribers might be compelled to pay the premiums, on request of the cashier, with 6per tent, interest to the day of payment.
By-á subsequent act, passed in December; 1795, it was enacted, “ That the said subscribers, a majority of them in person or by deputation being present, or a majority of the sum subscribed, when atiy meeting shall be held, being there represented, shall have-power and authority to proceed and act in all matters and things in the first red ted act mentioned, in as full, absolute, and unlimited a manner as they, might or could, do if all and every of the said, subscribers were actually present and attending, at any such meeting.”
By an act"1 passed the 12th of January, 1799, it is enacted, “ That the said mutual insurance society shall have full power to recover the whole, or any part of such premiums or quotas as are, or may hereafter become, due from any delinquent subscriber or member, under his subscription of declaration for insurance made to the said society, on motion of the cashier of the society before the court of the county, or the court of the district wherein such delinquent may reside, ten days’ notice of such motion being, previously given; and ,?uch. court shall have full jurisdiction, to hear and-determine such motion, and to cause their judgment, to be enforced with costs by any legal executions 5 saving to any person, ’ against whom a. motion, shall be made, the right of a trial by jury, if he shad desire it.”
By an-act passed the 27th of January, 1803, itjs enacted, u That the said society may insure buildings in the county of Alexandria, provided congress shall pass a law subjecting those who declare for insurance .in that society to the provisions and regulations of the ‘ laws of Virginia, which are already, or may hereafter be, passed concerning the said society. The act- to •commence and be in. force.as soon as congress shall' pass a law subjecting the citizens of the county of Alexandria .who shall hereafter subscribe for insurance in the. said society, to the same mode- of recovery in the Court of. the county of Alexandria as is now allowed and granted.by the. laws of this commonwealth against .defaulting subscribers residing within this state.”
, > On the 3d of March, 1803, congress passed such an actas was contemplated by.the legislature of Virginia.
.On the 29th of January, 1805, Virginia passed an act, the preamble to which recites, that it had been represented on the part of the society that such a change in their constitution a? would separate the interests of the inhabitants of the towns- from the interests of the inhábitantsof the country, is essential to the “ equalization” of the risks, and that the same had been agreed upon at a general annual meeting of the society. It therefore enacts, that the funds should be divided between the towns and the country, in proportion to the capital subscribed by the towns and country respectively,- and,' that the town funds should be only liable for town losses', and country funds for country losses. That during the year 1805* all the valuations of houses insured should .be revised, and no loss paid but according to such revaluation subject to- a deduction of one fifth thereof » “and where such revaluation shall- exceed the'former valuation, an additional premium shall be paid”
That “ it shall be lawful for any member of this society to withdraw from the same, oft giving six weeks’ previous hotice, and upon paying all arrearages due at the time of withdrawing.”
f That all debts due;, of to become due,, to the society may be sued.Tor, prosecuted, and recovered in the name of the. society in the same manner, in the same •courts," and upon the same principles, as* they may now be sued for, &c. except that the name of "the Cashier need not be used. That the agents, &c. shall perform the- duties required from agents by the 19th article of the rules and regulations now in force.”
By the 19th article of the rules and regulations of the society adopted and in-force prior to the"29th of January,-1805, the duties of an agent were “ to act for the society agreeably to the constitution, to apply, to the houseowners of' their- respective counties, explain the plan to them, make out the declarations of insurance, procure the .certificate of the majority of three respectable houseowners (of whom the county agent may be one) of the valuation of the buildings, transmit the declarations», properly executed, to the principal agent, and correspond with him on what may be necessary to be done.”
The plaintiffs in error made their declaration for ináurance in the usual form under seal,' and thereby pro- . mised that they would “abide by, observe.and-adhere to the constitution, rules and regulations which vyere already established, or might thereafter be established, by a majority of the assured present in person, or by representatives, or by a majority of the property insured, represented either by the persons themselves, or their proxy, duly authorized, or their deputy, as established by law, at any general meeting to be holden by the assurance society, or which were, or thereafter might be, established by the president and directors of the society.”
In consequence of this declaration, the plaintiffs in error paid the original premium of insurance and ,©b tained a policy. The society demanded a Ixtlf quota f *' 's t0 say’ ^°r the payment ás it existed on tub 25th of February, 1805, of a sum equal to one half of the original premium, which half quota was required to be paid on 'fhe 1st of April, 1805, and is the sum for which judgment is now claimed,’’
By the 14th article of the original rules and regulations of the society j it1 is provided, that, “ In every period of seven years,from the commencement of.this institution, there shall be new declarations arid valuations ,for insurance upon buildings insured by this society, and whoever fails to renew hÍ3 declarations and valuations for the space of three months from the expiration, of each term of seven years, shall cease to enjoy the benefits of his assurance till such new declarations, are made; should the valuation bp less than before, the assured shall have no right to demand of the society , the difference of the premiums, but it shall reí* main for the benefit of the society, and in case of any loss the insured are always to be paid according to the last valuation.”
Korn & Wisemiller
did not, within three months after the [expiration of the first tetm- of. seven.years, renew their declaration • and valuation, and thereby ceased to enjoy the benefit of their insurance.
The town and county of Alexandria, in which these buildings were situated was, until.the 27th of February, 1801, a part of the state of Virginia, since which day they have constituted a part of the district of Columbia. The plaintiffs have always been inhabitants of the town of Alexandria ever since the year 1789. .
On the 25th of December, 1795, the society commenced the operations of the institution.
In pursuance of the act ot Virginia of-the 29th of January, 1805,, a separation of the interests of the inhabitants of the towns from the interests óf the inhabitants of the country, has been, made in the manner expressed in the. 1st, 2d, 3d, 4th, 5th, and 6th sections. The new constitution in that act contained, went into operation on the 30th of January, 1805-
The plaintiffs in error made a declaration of revalua-. lion of the property insured by'them, which declaration was under their seals, and was produced and made in consequence of the representations of the agent of the society, who stated that • the plaintiffs in error, were bound by their former declaration, and by the rules and regulations of the society, so to do.
C. Lee, for the plaintiffs in error, contended,
1. That they were not members of the company on the 25th of February, 1805, when the demand was made. I
By the cession of the district of Columbia to the United States, the town of Alexandria ceased to be in Virginia, so that the plaintiffs in error were not Virginians, nor was their property in Virginia, and one of-the fundamental articles of the charter would thus he violated if the property should continue to be insured.
By accepting thé new charter the old was dissolved, and po person , could be a member of the new company unless by a hew declaration, and by accepting a new policy. - -
2. That the revaluation, and new declaration did not hind the plaintiffs in error, because it was made under a misrepresentation made by the agent of the society j and it is immaterial whether it were a misrepresentation as to the fact or as to the law. .
■ By the charter the assured only were to be considered as members of the company. When a person ceased to be assured 'he ceased to be a member, and was no longer liable to new calls. If the property of Korn Wisemiller had been destroyed by fire after the 27th of February, 1801, (the day of the separation of Alexandria-from Virginia,)-the society would not have Deen liable; Korn & Wisemiller, therefore, cannot be liable for- a share of the losses which have happened since that time. It was a fundamental principle of the charter, jthat the insurance should be mutual.
The act of congress of the 27th of February, 1801, which adopts the laws of Virginia as the laws .of that part of the district of Columbia; does not aid the society, for the. law of Virginia authorized insurance to be made upon houses in Virginia only.. "Any person might withdraw' from the company- by refusing to pay a quota, or by refusing tp accept a policy;
Swann, contra.
The original charter gave the majority of the members a right to bind the residue, as well by alterations in the charter itself, as by rule's', by-laws and regulations ; a majority could accept a new charter, and thereby bind all the members.-
The cession of the district of Columbia did not destroy private rights; it only changed the political relation of the inhabitants.
JNo person' could ‘ withdraw from the company otherwise than'by the-mode pointed out in the. act of Virginia, after giving the notice prescribed.- The suspension of the insurance- of .a' person refusing or neglecting to pay, his quota, is a mere penalty, he does not cease to be a member, he still remains háble for his share of the losses, notwithstanding the suspension of his own insurance;
. If there was a misrepresentation, by the agént of the society,'it was a misrepresentation of-a principle of. law which the plaintiffs in error were-bound to know as- well as the agent. They were ■ members of the company, and ought to have known all the obligations-they contracted as such! Fonb. Eq. 108. Doct. & Stud. 1. 46. 309. Woodd. 608. Buller, 31.

Opinion:
Johnson, J.
delivered the opinion of the court as follows:.
This cause comes up from the circuit court of Alex andria, ia which a summary j udgment- has been given for. the recovery of a contribution demanded of the members of the. mutual assurance society conformably to its by-laws.
The plaintiffs, hiere contest their liability upon- several grounds.
I. .Because, by the separation of- Alexandria from the state of.Virginia, they virtually ceased to be members of the institution.
2.. That, by having omitted to revalue within seven, years, they were no longer insured, and, of conse-" quence,.not liable to-'contribute.
3. That, by the alteration of the charter in 1805, their security and liability became so. materially changed, as to discharge them from their contract.
4. That their revaluation in 1805- ought .not " to bé obligatory upon them, because they were deluded into it by false or incorrect suggestions. .-
5. i nat they are • not liable, under, the' description of persons who.had'insured pVior to 1804, as they, ought to be. considered only as having insured at die time of their revaluation.
. Oh the first of these points, the court are of opinión,' that the separation of Alexandria from, the state of. Virginia could have no -effect upon' existing contracts of-individuals. Such divisions of territory are entirely, political, a separation of jurisdiction takes place,but. private interests and private contracts remain unaffected, and every individual relation continues the same, except that of being associated under the same government. The circumstance, that the law of Virginia,, has limited the company to the bounds of the state," in performing its functions, could only prevent theai. from- making new' contracts subsequent to the separation, and until they had received additional powers,'. but could not release them from their liability to individuals with whom they had previously contacted. Nor can the circumstance of the' members of'the legislature being authorized to represent their respective counties, affect the case ; for, although the Alexandria property could no lónger be represented in that mode, there was nothing to prevent their appearing' in person, or by proxy, at the meetings of the company.
The court are further ot opinion, that all the other grounds assumed by the.plaintiffs are equally untenable. Although, at th'e'first view, it would appear reasonable that he who-is not insured is not bound to. contribute, yet there may exist strong reasons, why, under the peculiar organization of this company, a different rule should be adopted ; and certain it is that the individual may, by his own act, subject himself "to such a state of things. The liability of the members of this institution' is of a twofpld- nature. It results both from an obligation to conform to the law's of their own ma-1 ing, as members of the body politic, and from a particular assumption or declaration which every individual signs on bécoming a member. The latter is remarkably comprehensive. " We will abide by, observe and adhere to the constitution, rules and regulations which'are already established, or may hereafter be established, by a majority of the insured present in person, or by representatives, or by the majority of the property insured, represented either by the persons themselves, or their proxy, duly. authorized, or their deputy, as established by }aw, at any general meeting to be held by the said assurance society, or which are, or may hereafter be, established by the -president and directors of the society."- It would be difficult to find words of more extensive signification than these, or better calculated to aid, explain and. enforce the genérál principle, that, the majority of a corporate body must have power fo bind its individuals. It is true that the words of this declaration, as well as thé general power of a corporate body, must be restricted by the nature- and object of its institution; but apply this rule - to the case'before us,, and it cannot avail the plaintiffs, for both the rule which suspends the secu rity and the alteration made in its constitution, under a vote of the majority, are strictly Conformable to the general objects for which the company was instituted.
We are of opinion that whilst Korn & Wisémiller continued members of the society, they remain subject to the general liability which that state imposes ; and that, after becoming members, their ceasing to be so must be determined by the rules of the society, which rules, as far as we are at present advised, admit of only two cases ; one is, where the house insured is consumed, by fire, and the otb,er, upon giving the notice, and conforming to the other regulations imposed by the by-laws.
It is observable that the rule which imposes the necessity of a septennial valuation of the property insured, does not contemplate a total rescission or annihilation of the contract; on the contrary, it is express in declaring that, upon a revaluation being made, the party shall continue insured by virtue of his former policy. We, therefore, consider this suspension of his security merely as a penalty imposed upon the'member for neglecting to conform to a rule of the society. And it is certainly much more reasonable that he should be subject to a loss or inconvenience fot his own neglect, than that he should be released from his liability to the society, in consequence of it.
As to what is contended to be a material alteration in their charter, we consider it merely as a new arrangement or distribution of their funds and whether just or unjust, reasonable or unreasona&le, beneficial or otherwise, to all concerned, was certainly a mere matter of speculation, proper for the consideration of the society, and which no individual is at liberty to complain of, as he is bound to consider it as his own. individual act. Every member, in fact^j stands- in the peculiar situation of being party of botf sides, insurer and insured. Certainly the general sub, nission which they have signed will cover their liabilit'' to submit tq this' alteration.
The view which we have taken of this subject affords an answer t0 ^ fiftfi ground, and, in a great measure,.
We consider the insured, upon every revaluation, 'as in under his former right of membership, and, of consequence, that the plaintiffs come Under the description of persons who had insured before 1804; and, for. the same reason, the representation of Scot (could any. effect at all be given to the circumstances to which he testifies) was true, as to the membership of the plaintiffs, ánd as to their liability in that capacity; They must have known it was a question of law; on which Scot possessed no power to commit the society, and on which the plaintiffs themselves ought to have been as well informed as any other individual.
Judgment affirmed.