Insurance Co. v. Connor

1. A corporator in a Mutual Insurance Company, like a stranger, may enter into a contract of insurance with it, and his rights under the contract will be as fully protected as those of a stranger. The remedies existing at the time of the contract for enforcing it against him, are all that can be resorted to. The company have no right, without his assent, to impose any new condition, affecting the contract to his injury; or by a by-law, passed after the making of the contract, forfeit his rights under it. 2. A corporator in a fire insurance company effected an insurance on his individual property, and gave to the company a note for the amount of the premium for insurance. A by-law was subsequently passed at a meeting of managers, at which he was not present, which provided that if the interest on the said note be in arrear at any time for three months, “ the policy shall be suspended and of no effect to make the company liable for loss until the interest be paid.” Upwards of three years after the passage of the by-law, notice of it was given to him by a circular letter, and within thirty days after the notice his property was destroyed by fire; it was Held, that the company could not, by the passage of the by-law, without his consent, prevent his recovering on the policy: the only remedy of the corporation for the nonpayment of the interest was to call in the principal sum: they had no power to forfeit his rights under the contract.

Error to tbe Common Pleas of Northampton county. This was an amicable action in covenant, entered in the court below, between Cornelius Connor, as plaintiff, and The Eire Insurance Company of Northampton county, as defendant. Tbe following case was stated for tbe opinion of tbe court:— It is hereby agreed that tbe above action be entered in the Court of Common Pleas of Northampton county, as of August Term, A. D. 1849, and that the following case be stated therein for tbe opinion of tbe Court, viz.:—On the fifth of November, A. d. 1844, a policy of insurance was issued by tbe said Tbe Eire Insurance Company of Northampton county, to Cornelius Connor, tbe plaintiff in this case, insuring certain buildings belonging to tbe said Cornelius Connor, situated in the village of Mauch Chunk, in the county of Carbon, in this Commonwealth, viz.: $3500 on a certain tavern-house, designated as No. 1, and $1500 on a frame dwelling-house, designated as No. 2, which policy was signed by John Green, the president of the said company, and attested by II. D. Maxwell, the secretary of the same, and the seal of the said corporation was thereunto affixed. It was also signed and sealed by the said Cornelius Connor, who thereby became a member of the said company, as by the said policy, a copy of which is hereunto annexed (which, with all its stipulations and covenants, is hereby made part of this case), appears prout the same. At the time of executing the said policy of insurance, a note, whereof the annexed is a copy, was given by the said Cornelius Connor to the said The Fire Insurance Company of Northampton county, for the deposit money or premium required for the effecting the said insurance, viz.:— $156. JSaston, November 5, 1844. Six months after date, I promise to pay to The Fire Insurance Company of Northampton county, or its certain attorney, one hundred and fifty-six dollars, for value received, with interest. No. 122. Cornelius Connor. Endorsed.—‘ Rec’d., Jan. 5, 1846, one year’s interest.’ On this note no interest was paid but the one payment endorsed thereon, paid Jan. 5, 1846. On the sixth day of August, A. D. 1830, at a general meeting of the members of the said company, they vested in the managers of the said company the power to pass all by-laws, rules, and regulations, necessary for the well government of the affairs of the said corporation. On the fifteenth day of August, A. D. 1845, the managers of the said Fire Insurance Company passed the following by-law, viz.:— “ 9th. If a note be given for the deposit on any policies, and the interest thereof (to be paid semi-annually) be at any time three months in arrear, the policy shall be suspended and of no effect to make the company liable for loss until the interest be paid.” This by-law, with others adopted by the said managers at the same time, was approved at the next general meeting of the members of the said company. Cornelius Connor was not present at either of these meetings. After the destruction of the property of Messrs. Vansyckle and others, and shortly before the passage of this by-law, the Fire Insurance Company adopted a new form of policy, and after the passage of the said by-law, on the same sheet on which the policies were printed, this by-law, with the other by-laws, was printed, a copy of which said policy and the said by-laws, is hereunto annexed and made part of this case. On the 14th of April, A. D. 1845, Cornelius Connor having been notified of the destruction of certain property in New Jersey, belonging to Samuel Yansyckle and others, paid to the agent of the said company at Mauch Chunk $17.16, his proportion of the said loss, which Avas subsequently remitted to and received by the treasurer of the said ‘The Eire Insurance Company of Northampton county,’ and on the 17th day of August, a. d. 1848, having been in like manner notified, there was paid to the treasurer for the said Cornelius Connor the sum of $15.60, the amount of his contribution to the loss occasioned by the destruction by fire of the property of Messrs. Wagner & Huber, in the borough of Allentown. On the 22d day of June, A. n. 1849, Cornelius Connor received by mail the circular, signed by the treasurer of the said company, of which the folloAving is a copy:— “ (Circular.) Office of The Eire Insurance Co. of Northampton county, Easton, June 21, 1849. “ Mr. Cornelius Connor, Sir :—The interest on your deposit-note is in arrear, as will be seen by the annexed statement. This interest should be punctually paid, and unless it be so done, the managers have instructed me to call in the notes of those AYho do not pay. By the annexed by-law you will see the importance of •attending to the payment. “ 9. If a note be given for the deposit on any policy, and the interest thereof (to be paid semi-annually) be at any time three months in arrear, the policy of insurance shall be suspended and of no effect to make the company liable for loss until the interest be paid. Yery respectfully yours, H. D. Maxavell, Treas’r. To 3J years’ interest, due May 5, 1849, $33.11.” Which circular is made part of this case, prout the same. On the 15th of July, A. D. 1849, the buildings of the said Cornelius Connor, mentioned in the said policy, were destroyed by fire, and notice thereof given by him to the officers of the Eire Insurance Company. Several days after the fire and notice given, Lewis Menner, on behalf of the said Cornelius Conner, proffered to pay the arrearages of interest due on the said above-named note to the treasurer of the said company, who declined to receive the same. The Act of Assembly incorporating the said company,—the said policy of insurance,—the said note,—circular,—by-law,— forms of new policy, are all made parts of this case. If on this state of facts the court shall be of opinion that the plaintiff is entitled to recover from the said defendants the amount of the said insurance, then judgment to be entered in favor of the plaintiff—-if not, then judgment to be entered in favour of defendants. This to be considered in the nature of a special verdict, and either party to be at liberty to take a writ of error to the Supreme Court of this Commonwealth. The court below, after argument, directed judgment to be entered in favor of the plaintiff. His Honor, Jones, J., filed an opinion, which was in part, as follows: — “By effecting an insurance with a company constituted like the defendants, the insurer becomes a member of the corporation, and as such is presumed to know the terms on which he insured. But, although he becomes a member of the corporation by the act, the insurance, as between himself and the company, is a contract, no term of which can be altered save by the consent of the parties thereto; his character as a party to the contract is not merged in his character as a member of the corporation. They are characters as independent of each other, and as distinct, as though they were different individuals. Hence no act of the corporation, whether it be expressly or only impliedly assented to by a member, as such, can be allowed to effect a contract of the corporation with that member10 Mass. 384; 13 Id. 282. “ The power conferred upon the managers of the Mutual Insurance Company by the general meeting of 'the corporation of' the 6th August, 1830, to ‘ pass all by-laws, rules, and regulations necessary for the well government of the affairs of the company,’ does not, as we conceive, authorize the passage of any by-law to have a retrospective operation upon contracts of the company, such as the one before us. ■ To bind Mr. Connor by the by-law of 15th August, 1848, No. 14, his consent, not as a corporator, but as a party to the contract of insurance, was necessary, and the power-to pass the by-law no more reaches him in that latter character than does the by-law itself. In the case of Commonwealth v. Cain, 5 Ser. JR. 510, no contract existed; it was a case between corporators as such. “ This by-law was passed in August, 1845, and if it was capable of being extended to the case of plaintiff against his consent as a contractor, it would bind him as a corporator whether he received notice of its passage or not—the assent, though absent when it passed the general meeting, would be presumed; Stetson v. Kemp-ton, 13 Mass. JR. 282; and it would bind him from its passage. But in that case the company could not, as has been done here, ask contribution to losses from the plaintiff, upon the footing of the policy or contract, and then deny its liabilities to make good the losses against which it had insured him, upon the footing of the by-law. If Mr. Connor was bound by that by-law, he was bound from its passage, and not from the date when he received notice of its passage three years aftemoards, having in the meanwhile performed every duty to the company which his contract with them required at his hands. “ Let judgment be entered in favor of the plaintiff.” It was assigned for error, . 1. The Court erred in directing that judgment should be entered in favor of the plaintiff; they should have directed the judgment to be entered in favor of the defendant below. 2. The Court erred in deciding that Cornelius Connor was not bound by the by-law of the 15th of August, 1845.