Stockley v. Hartley , 12 Pa. Super. 628 ( 1900 )

Opinion by

Beaver, J.,

The affidavit of defense, the sufficiency of which is the basis of inquiry in this case, alleges, as a defense to the action brought to recover the pro rata share from the defendants of an assessment laid by a decree of the court of common pleas of Dauphin county upon the policy holders of an insolvent mutual livestock insurance company, that the assessment is excessive in amount and based upon allegations as to liability of the company which are not true in fact, and, in the supplemental affidavit of defense, that the policies in the case of the defendants, by virtue of which a recovery is had from them, were null and void at the time of the decree of the court directing the levy of the •assessment. There is a very marked discrepancy between the amount to be realized by this assessment, as calculated by the appellant and appellee, the appellant alleging that it is ten times the amount of the indebtedness of the company and the appellee that it is six times that amount. In either case it would seem that the amount of the assessment was larger than was necessary to provide for the payment of the indebtedness, but who is to determine that ? Clearly the court making the decree. The defendants allege that they had no notice of the application to the court of common pleas of Dauphin county for the making of the decree, but that did not preclude their being heard subsequently in an effort to have the decree modified. How many of the policyholders of the company, whose policies were in force at the time of the making of that decree, were insolvent ? How many were dead, whose estates were insolvent ? What was likely to be the cost of collecting and distributing the fund necessary to pay all the liabilities of the company? These and other questions were, of course, presented to the court making the decree and there is, therefore, good reason for the rule which has been laid down and is now well established that an order such as this is entirely within the jurisdiction of the court making it, is conclusive of all prior matters involved in it and that it cannot be questioned in any collateral or ancillary proceeding such as the present. The case of Fire Ins. Co. v. Boggs, 172 Pa. 91, and the subsequent phase of the same case, known as Kramer v. Boggs, 5 Pa. Superior Ct. 394, clearly determine this question. “If,” as was said by the Supreme Court, in Wood v. Standard Mutual Livestock Ins. Co., 154 Pa. 157, “ it clearly appeared that the fact thus alleged (the grossly excessive character of the assessment) is true, it would no doubt be good ground for invoking our interference, but it is denied by the appellee that the assessment is greater than is reasonably necessary for the purpose intended, and his contention is that the losses and expenses attending the collection of such assessments are so great that the net amount likely to be realized is but a small percentage of the gross assessment.” Such is the contention of the appellee here and it would seem that all these questions were carefully considered at the time the decree was made and subsequently by the court making the decree.

The decree is further objected to on the ground that there was included in the schedule of losses policies upon which there is no liability bj'- reason of the fact that six months from the time of the loss has elapsed without the bringing of suit, and the defendants allege that four policies held by themselves are of this character. It is sufficient to say in this behalf that the receiver may waive the limitation which is placed in the policy for the benefit of the company and prefer to pay all the losses, without respect to that condition. The defendants cannot set up that defense. The period within which suit was to be brought under the policy was a limitation made exclusively for the benefit of the company and it alone can take advantage of it.

The decree of the court of common pleas of Dauphin county expressly reserves to each individual member of the company the right to set up any defense he may have to the collection of the assessment ordered. This, of course, relates to such defenses as are peculiar to the member and are based upon individual grounds. The defendants allege in their supplemental affidavit of defense, as peculiar to themselves, the fact that they “ intentionally and for the purpose of rendering said policies null and void, refused to pay any of said dues or assessments after the 13th day of November, 1897, and that all of the policies of said defendants held in said company, including those referred to in this suit, then and thereupon became null and void, and were so treated as null and void by the said company.” This under a paragraph of the policies issued by the company “ that a failure to pay dues or assessments for mortuary or expense fund within the time provided for in the notice of assessment shall then and thereupon render this policy null and void.” Null and void as to whom? Surely as to the defendants themselves as respects their right to recover from the company. Their own failure did not and could not nullify the right of the company to recover from them their share of the indebtedness of the company. This was a mutual company. The members were bound to each other through the company to discharge their mutual obligations. The refusal of one to pay his assessment, although such refusal took away from him the right to recover from the company any loss which he might subsequently suffer, could not in the very nature of the case nullify his obligation to pay what others had suffered at the time he was under obligation, by reason of his membership, to join in bearing the loss: Susquehanna Ins. Co. v. Leavy, 136 Pa. 499; Matten v. Lichtenwalner, 6 Pa. Superior Ct. 575. Taking the original and supplemental affidavits of defense together and assuming that everything therein set forth is true, they do not constitute a legal defense to the plaintiff’s claim. The court below was correct, therefore, hi making absolute the rule for judgment for want of a sufficient affidavit of defense.

Judgment affirmed.