Donaldson v. Fortna ( 1921 )

Opinion by

Head, J.,

In October, 1916, the insolvency of the Central Mutual Fire Insurance Company was judicially ascertained and a decree was entered dissolving the corporation and ordering the liquidation of its business. The effect of this decree was to call into activity the powers vested in the insurance commissioner of Pennsylvania by the provisions of the Act of June 1, 1911.' At the time of the entry of the decree referred to the defendant was a member of said company and held a policy of insurance issued by it, then in full force. When she applied for and received her policy she signed a written obligation which became a part, perhaps the chief part, of the consideration paid by her for the policy. In that obligation she declared, inter alia, “I promise to pay to the said company such sum or sums of money, and at such time or times as may be required by the board of directors, for the purpose of paying losses and the necessary expenses of said company, payable within thirty days after notice at the company’s office at Lebanon or to any authorized agent.”

The statute referred to provides, inter alia, that when an order for the liquidation of the business of such an insurance company shall have been made, “Such liquidation shall be made by and under the direction of the insurance commissioner who shall be vested by operation of law with title to all of the property, contracts and rights of action of such corporation.” We apprehend that the words “liquidate” and “liquidation,” used in the statute, need no interpretation or judicial construction. In the use of those words the legislature simply directed its officer to gather together the assets of the defunct company, convert them into cash and apply their proceeds to the payment of the expenses of liquidation and the discharge, in whole or in part, of the debts due to the creditors. Manifestly the obligation signed by this defendant, with others of like character, signed by other policyholders, constituted the real assets of the company.

In the discharge of his official duties, the insurance commissioner levied against this defendant three separate assessments on the several dates set forth in the statement. Notice of each assessment, with the amount thereof, was duly sent by first-class mail to the defendant. Upon the reverse side of this notice of assessment there was shown “A statement of the unpaid losses and the assessment plan. Assessments have been levied upon all known and located policyholders of record as of the time of the occurrence of each loss.If any error is disclosed the liquidator will be glad to adjust it if full facts are given.” The defendant having neglected or refused to pay any of these three assessments, this suit was brought by the insurance commissioner to enforce such payment.

The record seems to show that the defendant has filed in the court below three alleged affidavits of defense. In no one of them does she pretend to exhibit any kind of a defense on the merits to the claim resting on the obligation she signed. She confines her effort to the repetition of the statement that the plaintiff has shown no cause of action against her, cognizable by a court, be-, cause he has failed to attach to his statement of claim “copies of the book entries showing the details of the plaintiff’s alleged claim, including an itemized statement of the alleged losses for which said assessments against the defendant are levied, with the names of claimants, accounts, credits, etc., and a list of the members and the amounts of insurance liable for such assessments.” She does not, of course, deny the insolvency of the company, and, as a consequence, her ultimate responsibility to answer for her proportionate share of its debts. She does not deny that the plaintiff is vested, by the terms of the statute, with the right to ascertain that proportionate share and levy assessments against the policyholders. She does not deny that she received due notice of these assessments and does not aver that she made any complaint whatever concerning their correctness. She does not deny that during the business life of the company it was her company and its executive officers were her agents. She does not deny that she had, at all times, access to the books, papers and records which her own agents were making. She does not deny that, since the insolvency of the company, those records have become at least quasi public records in the custody of officers of the State and that any information they might contain of benefit to her in seeking to defend against this claim was, at all reasonable times, available to her or her counsel.

Now it is the opinion of this court that with the record in this condition, the learned court below was right in making absolute a rule for judgment for want of a sufficient affidavit of defense.

We advert but for a moment to one other consideration, not without weight, in the consideration of this appeal. It must be conceded the insurance commissioner was vested by law with the authority and power to levy such assessments as were here made. That being true, it is quite clear, both on reason and authority, that a legal presumption arises in favor of the correctness of such assessments. Many decisions have been cited in the two careful opinions filed by the learned court below to support this proposition. In Insurance Company v. Vitale, 10 Pa. Superior Ct. 157, this court, speaking by Smith, J., said: “The presumption of law is in favor of the regularity of the proceedings to assess and the legality of the assessment, and this presumption cannot be overcome by a general indefinite denial.” The exact language quoted is incorporated in the opinion of this court in Tanner v. Weber, 59 Pa. Superior Ct. 14, and Trexler, J., speaking for the court, cites many other authorities to the same effect.

The conclusion that necessarily results from the line of reasoning we have adopted seems to us to be in entire harmony with the spirit at least of the latest utterance of the Supreme Court. In Buehler v. United States Fashion Plate Company, 269 Pa. 428, the present Chief Justice handed down an opinion, which declares in the plainest of language what is the duty of a defendant who undertakes to file an affidavit of defense, in dealing with averments of the statement of which the defendant may have no personal knowledge at the time he makes the affidavit. If by any reasonable effort he may secure the knowledge ivhich- would enable him to admit the fact averred or clearly deny it, it becomes his duty to acquire the information that might thus be obtained and make his affidavit accordingly.

The substance of everything we have said is to be found in the careful opinions filed by the learned court below which furnish forceful reasons for the conclusion he reached. The assignments of error are overruled.

Judgment affirmed.