Frakes v. Mutual Fire Co.

Mr. Justice Moore

delivered the opinion of the court.

Exceptions duly taken to some of the findings of fact were overruled, and it is maintained by defendant’s counsel that errors were thereby committed as follows: (1) In concluding that at the time stated the plaintiffs were partners. (2) In failing to find that prior to the fire notice of cancellation of the policy was given by defendant to plaintiffs. (3) In concluding that before the loss no notice was given that the policy would be canceled if the assessment was not paid. (4) And in finding that no assessment was made or notice thereof given, as required by the by-laws, in order to annul the policy.

1. Considering these assignments in the order stated, it is argued that no testimony was received tending to show that plaintiffs were partners at the time the policy was issued or when the fire occurred. It appears from the transcript that when the cause was called for trial counsel for the respective parties made statements of the facts involved, admitting that at the time of the fire the plaintiffs were the owners of the stock of merchandise and of the store fixtures, and were engaged in business at the place specified in the policy. The court, addressing plaintiffs ’ counsel, said: “The policy is admitted and the loss is admitted, is it not? Do you have to prove anything else?” The defendant’s counsel thereupon remarked: “Of course we admit they [the insurance adjusters] found there was the amount of loss as stated” (by plaintiffs’ counsel). The court: “I think that I will hold that the defendant has the burden in this case, ’ ’ to which ruling no objection was made or exception taken. The plaintiffs’ counsel thereupon stated the amount of loss as determined by the adjusters and the proportion thereof chargeable to the defendant as hereinbefore detailed. The policy of insurance was then introduced in evidence and the plaintiffs rested.

Though the averment in the complaint that the plaintiffs are partners is denied in the answer, no testimony in support of that issue appears to have been given. The certificate of the trial judge appended to the bill of exceptions declares that the transcript contains a full, true and correct statement of all the evidence offered by either party, including the exhibits. The attestation does not purport to give a minute statement of the facts or the admission thereof as made by counsel for the respective parties at the trial of the cause. In the absence of such affirmative showing, it will be presumed from the findings of fact made by the court that the plaintiffs were and are copartners, that defendant’s counsel at the trial solemnly admitted the association of the persons hereinbefore named for the purpose of carrying on business together, thereby rendering other proof to substantiate such issue unnecessary.

2. It is maintained by defendant’s counsel that the uncontradicted testimony conclusively shows that notice of cancellation of the policy was given by defendant to plaintiffs prior to the fire, and that the finding that no snch notice was given until after the loss occurred is erroneous. The proper solution of this question depends upon the kind of notice required by the terms of the policy. The written agreement for indemnity against loss by fire which was received in evidence contains a clause as follows: “Whereas L. S. Frakes Company in accordance with the application which is made a part of this contract, has become a member of the Mutual Fire Company of Portland, Oregon (hereinafter called the Company) and bound himself to pay his ratable proportion of all assessments made in accordance with the ‘ constitution and by-laws ’ and the stipulation herein named, and also the payment of one hundred two and 90/100 dollars, the Company does insure,” etc.

A part of Article V of the Constitution of the defendant company, the whole of which is printed in the policy, prescribing the duties of officers, reads: “The secretary shall be the recording, corresponding and accounting officer. He shall attest all certificates and orders, and keep a complete record of all business of this company. He shall collect all assessments, receive all premiums, and pay the same to the treasurer daily.”

Article VIII of the Constitution, as far as material herein, provides: “All losses, charges and expenses shall be paid out of a fund to be known as the ‘ General Fund. ’ This fund shall at all times be maintained by assessments levied only by the board of directors when in their judgment the necessity exists, and upon all the members of the company, and shall be prorated in accordance with the amount of their policies respectively.”

The policy also contains a copy of the defendant’s by-laws, Section 2 of which is as follows: “Upon the written request of the insured, which request in connection with the assurances that pertain thereto, shall be attached to the policy at the time of its issuance and become a part thereof, this company will issue a fully paid-up policy for the time agreed upon as provided by law, upon the payment of the total amount of the assessments that could or would be levied upon any given policy in accordance with the constitution and by-laws, provided, however, that such money so received, other than what was then due the company, shall not be paid into the ‘General Fund,’ but shall be paid into a fund known as the ‘Advance Assessment Fund, ’ which fund shall be held by the corporation in trust, subject to the following conditions: "When any assessment may become due and owing on said policy, that the said company is authorized to levy said assessment against the said insured in the ordinary and usual way, but the said assessment shall be collected only out of said advance assessment fund.” In construing the language of that section, in an action wherein the complaint charged the levy of any advance assessment, and such averment was admitted by the answer which impliedly, at least, stated that the sum of money so determined upon had not been paid within 30 days after the giving of notice thereof, it was held that the policy was self-executing, and that upon default in the payment of the assessment it became ipso facto void: Mutual Fire Co. v. Maple, 60 Or. 359 (119 Pac. 484, 38 L. R. A. (N. S.) 726). In that case, though nothing is said in the opinion with respect to the giving of a notice of assessment, the decision proceeds upon the theory that such announcement was duly received.

It will be kept in mind that in the case at bar the policy recites that the plaintiffs had obligated themselves to pay their ratable proportion of all assessments, and that the contract of insurance also acknowledged the payment of $102.90. It would appear that the sum so admitted was not an assessment but a premium, which amount agreed to be paid as the consideration for the insurance the secretary was authorized to receive pursuant to Article III of the Constitution. If, however, such sum was an advanced assessment within the meaning of Section 2 of defendant’s by-laws, and should have been paid within 30 days after notice thereof was deposited in the postoffice at Portland, Oregon, the mailing of a notice giving such warning is a condition precedent, the performance of which must be complied with before the policy is rendered ipso facto void: Schmidt v. German Mut. Ins. Co., 4 Ind. App. 340 (30 N. E. 939).

3. H. B. Wagnon, manager of the defendant, which is a mutual insurance company, testified that its' board of directors had authorized the levy of advance assessments of 70 per cent of the annual premiums of old standard insurance companies whenever a policy was issued; that pursuant to such sanction a levy of that kind was made by the officers upon the plaintiffs ’ application for insurance; that, .if the money realized by such method was insufficient to liquidate the loss occasioned by a fire covered by one of its policies, another assessment would be levied upon all persons whose requests for insurance, when granted, made them members of the company; that the information contained in a policy and a bill accompanying it, stating that the sum of money referred to should be paid within 30 days, were mailed to the plaintiffs and afforded all the written notice that was given. On cross-examination, the witness in answer to the question, “Then, it was a notice with the policy when the policy was delivered?” replied: “Sure it was, with all policies, sure; I have just been telling you we could not get along without that, we could not get any money to pay with in any other way. Q. Well, did you send out the policy? How do you know there was a notice sent out with this policy? A. Well, I don’t know whether I mailed it or my son mailed it, or the girl that wrote it — somebody mailed it out of my office, that is one sure thing. They got it at any rate; there’s a sure thing — sure pop they got it, and it was sent out of the office by somebody.”

H. B. Wagnon, Jr., who is secretary of the defendant company, corroborates the preceding witness with respect to the manner of levying an advance assessment. He identified an envelope which was received in evidence having thereon, inter alia, the sentence: “Policy mailed by A. S. ” In alluding to which, he testified that the letters last set forth were the initials of the stenographer in their office at the time. Beferring to the notice of assessment, this witness stated upon oath: “The policy itself so called for it, and there was a written statement mailed with the policy also.” Adverting to the plaintiffs, he was further asked: “And was there any statement mailed or delivered to these people afterward?” He replied: “It was, and in person by myself.” The court thereupon inquired: “What kind of a statement was it?” The witness answered: “Just like this one (exhibiting a paper); these have been printed since, but they are of the same nature. ’ ’ The plaintiffs ’ counsel then asked: ‘ ‘ Simply a bill, that is, a statement in the nature of a bill sent out with the policy?” The witness replied: “In each one; yes, sir.” The statement of the demand thus referred to was nothing more than a mere declaration of the amount due on the policy. Whether such bill was sent out by mail or delivered in person by H. D. Wagnon, Jr., which cannot be determined from his testimony, is unimportant, for the information thus furnished was not a notice that the contract of insurance would become void if the payment was not made within 30 days.

4. Where, as in the case at bar, the by-laws require that notice of assessments must be given in writing, testimony offered to prove that a parol notice was given is immaterial: Dial v. Valley Mutual Life Assn., 29 S. C. 560 (8 S. E. 27).

5. The stenographer who, it is asserted, mailed to the plaintiffs the policy was not called to prove that any notice of a levy of assessment was made. The secretary’s certificate, under his hand and seal of office, that an assessment had been made, and the amount thereof as provided by Section 8 of the by-laws, was not offered in evidence unless the policy can be regarded as affording such proof. No notice of the levy of an assessment, directed to the plaintiffs, appears to have been deposited in the postoffice at Portland, Oregon. The testimony, however, unmistakably shows that the $102.90 referred to in the policy was an advance assessment, but, in the absence of such sworn declarations, it might reasonably have been inferred that the sum so stated was the premium, so that the policy, though signed by the secretary and tested by his seal of office, did not, in our opinion, furnish the required information, and evidently is not the notice specified in Section 8 of the by-laws.

We concur in the findings made by the trial court that are challenged by assignments of error numbered 2, 3, and 4, which specifications practically involve but one question. Other errors are alleged, but, deeming them unimportant or not involved, the judgment should be affirmed, and it is so ordered. Affirmed.

Mr. Justice Bean, Mr. Justice Eakin and Mr. Justice McNary concur. Me. Chief Justice McBride not sitting.