Randall v. McClain

Fawcett, J.

The Nebraska Mercantile Mutual Insurance Company was organized under the laws of 1897, ch. 45, and was doing business, at the time of its insolvency, under such statute, as amended by chapter 48, laws 1903. In January, 1908, the company was adjudged insolvent, and plaintiff appointed receiver. October 27, 1909, plaintiff, as receiver, by direction of the. court, filed his amended petition against defendant McClain and some 800 other defendants, residents of 70 different counties of the state. The action is based upon an assessment declared by the district court against the defendants upon their several contracts or certificates of membership, or policies as they are sometimes called, in the company. The suit is a suit in equity brought in the district court for Lancaster county, in which county some of the defendants resided. Service was had upon them, and a summons issued to each of the counties in the state where other defendants resided, where such defendants were duly served by the sheriffs of their respective counties. Some of the members of the company paid their assessments and are not included in the suit. Some, who were included, made default, and judgments by default were entered against them. The appealing defendants appeared specially and objected to the jurisdiction of the court over their persons, for the reason that they are residents of counties other than Lancaster; were served with summons in the counties of their respective residences by the respective sheriffs thereof; that they are not jointly liable with any defendant of Lancaster county upon the causes of action set forth in the petition, and that no summons had been served upon them as required by law. Their special appearances being overruled, they then separately demurred upon the grounds: (1) That the court had no jurisdiction of the persons of defendants;. (2) defect of parties defendant; (3) several causes of action improperly joined; and (4) that the petition does not state a cause of action. Their demurrers being overruled, they answered., some separately, and some joining, with others of their county. In their answers they preserve the objections made in their special appearances, and add that the action was one for the recovery of money only and the summons served contained no indorsement of amount for Avhich judgment would he taken in case of default; that the respective claims against the defendants Avere several, and not joint; that they could not he brought from the counties of their residences into Lancaster county to defend; that at the time of the alleged assessment there Avas nothing due from the defendants to the receiver; that no proper or legal assessment Avas made; that the contracts of insurance limited the liability of defendants to the amount of premium stated in the policy; that defendants are not members of the insurance company in the sense that they can be assessed for the liabilities of the company; that there is no multiplicity of suits; and that defendants Avere entitled to trial in the counties of their residences, and to a jury. The reply to each ansAver was a general denial. The decree was in favor of plaintiff upon every issue, and a large number of the defendants have appealed.

We deem it unnecessary to consider the various assignments in detail. Counsel for defendants rely largely upon Burke v. Scheer, 89 Neb. 80; while counsel for plaintiff pin their faith to McCall v. Bowen, 91 Neb. 241. We think this case is ruled by McCall v. Bowen, supra. In Burke v. Scheer, supra, the case was submitted upon a general demurrer to the petition. That case involved a construction of the statute relating to mutual hail insurance societies, the provisions of which are materially different from the provisions of the law under Avhich the insurance company of which plaintiff is receiver was organized. In Burke v. Scheer but two questions were in fact determined, viz., that the legislature, by the act governing mutual hail insurance societies, prescribed both the maximum of a member’s liability and the form of action by Avhich payment of that liability could be enforced. The petition in that case did not sIioav that any by-laws had eA^er been adopted, and it Avas argued by plaintiff that because the liability of the members had not been limited by the by-laws their liability was unlimited and that each member or policy-holder was personally liable for all of the debts of the company. We held, and quoted the statute to show, that no member could be required to pay more than the amount of his obligation. We also held that under section 124 (Comp. St. 1909, ch. 43) of the act under which the society was operating, which provided that “suits at law may be brought against any member of shell company,” etc., there was no authority for the receiver to proceed in equity; that, the legislature having prescribed both the maximum of a member’s liability and the form of action by which the payment of that liability may be enforced, “we do not think the fact that the company has become insolvent can in any manner enlarge such liability or change the form of action which may be resorted to for its enforcement.” That was all we decided or intended to decide in that case.. The discussion in the opinion is predicated upon the statute we were then considering, which, as we will show, is quite different from the statute governing mercantile insurance companies. The statute under consideration here (laws 1897, ch. 45) provides: “Section 3. All persons who effect insurance in any company organized under the provisions of this act shall thereby become members of such company and continue to be during the period their insurance is in force, and no longer.” Section 9 provides: “If any member of such company for the space of thirty days after written or printed notice of assessment has been- mailed to him or her, postpaid and directed to the post office as stated in the application for insurance, shall neglect or refuse to pay the sum assessed, such company may sue for and recover such amount and cost.” There is no such provision as section 3 in the law under consideration in Burke v. Scheer, and the section as to the bringing of suit expressly provides: “Suits at law may be brought,” etc.

In McCall v. Bowen, supra, the company was organized under the statute authorizing the organization of hog-raisers mutual insurance companies. The provisions of that act are set out by Mr. Justice Letton on page 245 of the opinion, and we held: “The liabilities of a member of a company organized under this act are fully as great as those of a stockholder in an ordinary stock corjioration. It is immaterial whether the members of this body corporate be designated as members or stockholders, because during the term that their policy of insurance covers they are as essentially members of the corporate body as owners of stock in a stock corporation are of such a corporation.” We reaffirm what is there said. The statute under consideration here being practically identical with the one under consideration in McCall v. Bowen, this case must be ruled by that. Having reached this conclusion, defendants’ assignments of error must all fail.

Affirmed.