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Washtenaw Mut. Fire Ins. Co.

Washtenaw Mut. Fire Ins. Co. image
Parent Issue
Day
6
Month
June
Year
1873
Copyright
Public Domain
OCR Text

Office of tu. ■ vr Mutual i Flftli lxsi Ahn íYr'onr, May 31,-jl,, 1873. ) To thp members of said company .- Gentlemen : - toar Board of Director have thought proper to publish for your informatioii the following sta.1 ents 1:1 regard tot] ot Jai: ■■ loss, and al-o tlie amountoi Inriod upo eaoh Í1.O0 - exütanoe oJ ho c mpany. Ou the tenth diyof ' ■% 1872, the: Tl,. ar 1 1 DireAori adopted o j-1 declaring that t! oomgany wonld not iii, me ofuen bcra v.'Lüs! thrashio ly steam puvvcr. an 1 ■■' ' notbe held for Iobs f caused by steai encino or iirti theriIn the m:mth of September, 1872, the barn o James Morgan, of Pittsfield, and its ont sofedin thu éoïbpany were deatroyoá by fíre, communicatcil from a steam thresher en, uoyal by Hivd Morgan at the time in threahing )■ of grain. On nvestigatiqn it was found that tho engiue liad set íire to a stack of straw tle day before the flre cansing the loss, at another barn of MrMorgan's, and that thongli avvaro of that faot he ila'l H resher to be set to work on tra wmuward BÍUe of lus barn, on the day of th fire, thou-ii a brisk wind was blowin. 1] claimod, however, that vfheu he commence work the coursa of thowind f rom tlio eugiu paaseil by córner of tJie baru. It aiso appeuro:! tliat the same entine had, 01 sevcral other previous oocasioni, iftnited als, suoli as straw aTid oul rails, thtragh it dii not appear that Mr. Morgan was aware of tb( faot, exeept the ono pieviom instaneè at his other barn above mentioued. ïhe testiraony showed tliat the smoko stack o he engine eiuitted sparks not visible iirtlie daj me, but which at night were seeu to be immer ma and fiery. It appearcd that Mr. Morman was not aware oí he by-law of June lüth, 1872, at tlie time of the íiru, and but ior tlie fact thyt I seetned to thi Board that tliere had beun great negligeace and v.-uut oí rcasonalile caro on tha part ui llr. Morgan, the circnmstanoe oí suca want of kuowledge on his part would have boen regfirded bj tho directors as giving him tí Btl-ong i -iaim on the conipany. Some oí the memhcrs advmd payment of thc loss# witli tha understaudig liiat no othar Iose'a aused bj sach mean; would bo paid. Mauv thers objectecl that it woiild e a dug precedent, and demandëd tliac thu claim should be contested. Tho directora counsoleil Ju Iga BtóTws, tho couusel of the campaay, who was of opinión .hat the eompany wad not'legally Hablo for tho oss by reasou of tho by-law. The case being one oï gi-eat iuiportauce to the. ompany we reqaested Judge Beakea to take tho ritten opinious of Mr. Lotluup and Jiidga Walker, of Detroit. Their opinious concurn-d ïth that of the counsel for the comp;uiy, tha!. thero was no leftk] hability for the loss under the pohcy of insurauoo isiuei by the compauv. We subjoin a copy of the opiuions. ïfo reasonable effort was spared on the part of tho directora to reach a' satisfactory resuit. The case was fully subnüttoil, and was twice argued before the arbitrators, Hoa. Edwin Invr.-nj.. and Hon. Henry W. Kogers. We subjoin a copyoí th v, ril! en opinión of the urbitratora, by whioh it wül be seen that they deoided t!ie case againstthe company. The directora have paid theaward (?Ï389.1j). Thereauitof the case shows the uecessitv oí aídihoiK-il by-law. Tlie directora have, thereiore, taken the matter imder eai-eiul oonsideftition, and have adopte:! and plare.1 in the hands of the mcmbcr sucli by-iauo as iu liieir udgment was indispeuaable for the iateresta of the com jiruiy, aud its memtera. Tiiis coiapauy oommenoed taking ris'ks ilarch 3d, ISCü. at ■! o'clock, r. ir. 1861, Oet., PirsfAssesstnent, S1.5B per 81000 1 'hl 1863, Oct., One Assessinent, 1.55 " 1W1, Xo Asai-ssiiienl, '■iarch, Una Assessment, 1.00 " " IÜCO, Maruli, Uliu I ,. l.(jo u ., 1867; -■- v., T'.vo Assissments, 3.00 .- 1868, Juñe, One Asseasnient, 1.00 " " 1809, Jau. and Sepfc., Tv.u Asses3Jiiunts, 2 40 " ' 1870, Sept, One Assyssmvi,:-, l.üi i 11 1871, Mareh, öné , , i.-g „ 1872, Jan. and Xov., Twj Asseas■ '"'"'t. . 3.1086 " " fo Mai-ch, .3, 1S73-13 y(,, 3,5 „ „ Avciuye pur yau; l.jlüá ' . ïhs comyauy has rlune business for 13 1-1 years at the above rato of ag3e8sments: owes bot a small mount, a;id v.-ül not juako au aesesment until ivo moot with anothor lar-. We belicvu it to ba rtronger noiv than eVi foro, and dustinnd to gM&t ifflrfüïnêss to our farmers, 111 iunüsliing cïioap and reliablo insurance. HE-VRTW. YFA.IT ) ,!;i;; ',''I.L, ' ( Directors. K. SHELDOif, 3 KKASOXS FOK THE AV.ABD. James Morgan, Claimaut va. The Washtenaw Mutual Pire lnsuranca Company', blespoudent. ThisSa referenêe under 'the 5th Sectíon of the Hwpondeni's Ciarter, which proyidea lora submission oi conti'oversiea uni.-h may ari Ween assurers and thé assared. in èertaiu soeciUetl cuses. L At the hearing, the fellowig ajnong other pomts were ■ . Thn (',;,,,,..(' i. msuredin th oojnpmy, April I8th, 1871, unon ■uso, Bhods and bariis, situated ou hú ïann ni u asntemtw Courrty, and on the 25th oJ tuml.er, 182, onc „{ tiu, barns and shedi their contentó wore burned by reaon oí the use oí ei eteam thrasher, the loss beirig $1,294 The aomp&uy wet tmder ugenera) ïaw oí (lu: State, aud the CJaonant on baing inaurd ba. camc a memboptheïeoi ; thatrelátion oontinued to anti ftftai the date of the los. The director af the company, iu aádétio to a Ren,eral specialJy authorized toe by-iawsin reteionci apecifietni and lor other puiHOses with a view to ;i reuter „v, ui ,,,„ uupcuy HiMircii, toeether vriti rachother by-laws asth deern expedi"-■"' !'"' ""■■ wteie ■■ "i said compaDy, i laws shall be binding upon the mémbera thereof. I In !■■■ :i. y eoiiüiins claune in these words: 'An,i it is liereby declarad aud agreed betwa n tin; uisiired and the oorpóratiou tliat thia oiicy ia mode and acoepted in refi reoee to the charter and by-iaws of thjs eorporatipn, and ti: difaons herete aimcxcl aod appende I which are 10 bei-OBortedtoiaorcteï tomrtie and explain hta and obligatio ,, [ ;ili.i tuis Corporation, n alJ casus notterainotherwise speciatly prowdeti for." On the lOtli doy af June, 1872. Ote Board of Directora adopted and entered upon their rerorda the followirig: At a ineetiug ot the Board ui üireutow H w.u resolved, tliut tl, oompauv wouiii not lUBure the property of mi i wliilst tin. ihing i-v steain power, nd would not be Luid for los, n" causeU by Btuam eniiine oc ure thereirom. Nonöticebl lliiuftcöon of the dfreotors was gwen or ftttempted to begiveti to the Olaimant oor hadhp rruy knowledge theraoj mitil after the ïnsurcd property was bnined. Itwaiiasisted bj the Claimant that the wmo. lutioii pi th.' dire. to) . oí Juno UHli, abo lorth, by reason ol its inapt aud inartificial conBtenction did nor omomit to a by-Iaw, and me Bucli, aud should uot -n en. (hril the directora bád no power to enact ty-éaws ofi i: . ;., aUil fttan_ rete no sucli bj--law could pi anv biodiui force upon peraoiis hotding oontracts -oí insuraaoe at the time oí iu enactment, .nle,s notiüed tlicrtüi. Ou behalf of the Respondent t was areued that tl.osc pmnö irera nol weU taken, ,i„t that ■ ■ ' ■ umaul being a member of the oom tud Ir. thi action of the directora That o B eontractor made no differeuce itioae in respect to this question be!'■,' indietinsukhable. uuier in'unta were raired and discuKsed by the oouasej with muoh real and abilBui .11 the mi taki n bv the 6, il is unnecossary to state them ere Without coming to u. decisión e ■ to whether the Rectora inteuded In th. ir autiuu, of June lüth ."''" '" ■ Qsuriu nin existeuce, or ifa faii imterpretation of the language of the reuolution justifiea that com ir tlicy had the anthority to take such áction, we are of the opinión that il was of no binding force or etfect ,upon the Claimant n lus characteraea oontractor fcithout actual .. A by-law or tBSolution without notice, that proonduct to the asai I which di it should worfc ouabie. es y by-law to be n on ible should i provide fo ry ït. Wel) tliougi in! oonaideratio lij ,, a lt_ ■11 wc have I seemed to us repugnant to eijuity uul ■ ■■ bei 11 unable to find uied, we faii to sE auy valid te as objeotionabli i ii il does uut, contoin, n by n of thoee which it doe. But evon if this by-law be notin ítself unreasonabie, we are entirely sahsfied that the L laiuiant in thil bound by it without actual notice of ita cxistÜ11-J3. E. hA.V RENCE, H. W. ROGES8. OP XI UN OF ItO.V C. 1. WALKKB. ÜBTBOIT, Siarcli Tth, 1873. tira. U. J. IIkakks, Deai Sir: r havo been carefuUy examining the question Bubmitted bv you, m relation to the liability of the VVaahte.1'. I. Co-, in the case and underthe facta Thosa ftMSta I understand to bc as fot■"■ e 'si:., rirtne oí the genewJ law, ander : e.i ad artíeles of associtftion adopted Feb. 1., u, i871. By tlio 17th Beotion of irticlesil Uprovided Üiat any person may lember of s;u I Cómpany by matine au applicatiou tor inaurauce, ,ii:l complyins withth ,„ the ohartet and )■ and may irithdra froin noh membersliip bv givmg vnitton notice and paying dl aaaessmente lur iüsses and dobt up tj the time of said withdraw J. Uy seötion 7 of Baid artíclen tho teneral po Br the Board of Di section 23 the board is Mpecialli izod lomake by-lavrti upón Beveral sub" '■!. trad "forother pürposes, with a ■ seouritj of the umperW in"sured, together with Buoh other by-laws as thev mufhl deam expedient, " whioh by-laws shaU bé ■■ on the membara of said company " liic Clalmant, in this case, became amember ol the company by becoming Insured therein and the poüoy coutaina the expresa i.voviaum taatit is made and accepted in reforence to -tho charter and by-laws of this cornoraHmi ■,,,,! onditioaa thereto anuexed." White ach poiicy was existing on the lOfli of 18(2, the Boiivd of Directora ndoptecl ;i bythe cqmpany rould not insure the in -i menibers whilsf threshing by ttbxm i ', and ould no( be held for iuss if couseil ' '■■ lire tlien.JVom Of this by-law tlie Ciapaant had ao actual uotioe, mul ■i Bteam thresher aud . Ma ba v,4a burnt. The questión ia whether midor thia state of ■ opmpany is hablo to the usurad on his y. lst. Ido not understaud that anj auagtioii is made as lo the validit) or reasonableuesa of thia li wasenuoted bythe propeï autíioritv i .y withm the scoiie of theiv power and onable in iteeli and well calcuJ ,■ promote the interests oí all the memoera ot the ■ on. d. The general rula is olear, that the mema eorporation T( indByita bv-lawa md thia whether they have actual notio thereof or mi! . AagaU & Am os on Corp., (3 E 1.) p. 360; Grant uuurp., p, ir. WiJcuck on Cori)., secs 214 -52 ; Comyn's Dig. By-Laws B. T; James 1L lutm.y, (■!,,, :.,.r.,.,;i7...s: Looder ra'. Van AcL 15, .JartheHT, !M ; Oud len w. Eitwiek, 6 Mod TOjTheButchl km "i this ronraot ■ the Corporation be laanioipal or private a cliaracter, iu the abone aathoritiea fullyshow 48,1' ■■''■'■' ■"-1"' o State, aud Üuae withiu it uriadiotion are boud 1 by ita lawa, whether they lava aofeial . „r them or not. so the aemberap] a oorjOTiation are bouua bv th awBthereoi, whether they have actual knowl■'■ nut. There isa con, lu ive jresumtóipn m the one case that they kaow the w, an i „. the ether that they know the byuv- auaWjfy betweeu the' tare of the h ! by.aws oi u Hporation ig disinctly stated in Conuaiiiga es. Webster, 43 My '1 principie has boon tonoanoed ftod I rith referenoe to mutual iusunuice ompanies, m a large number of casen lt is ruo '" ; these cases the by-Iaw ex 9te :: ' ' ■ SBued, but the priniptethat the members are bouul by the bvws is anuouTicnd wit' mt quaUflcdttoiii Susque launa Insur. Co. ri.Ferreu, 7. V & S 18; WoodfuT es. 1'Lb Ashville M I ('o i unes' K. C, 6 S; Boyle t. In,. Co. 7 do 373imerel p Bubuque fl. F. I. Co., 18 I„wa 319 ! olest-i. lu.-,. State M. I. CV, 18 Iowa? 426 ii-.Uvay is. Hamilton M. I. Co., 29 Conn 89 : U1..I.1ÍU-S is. Webpter.43 Maiue, 192; BeUe.h'M. :.('... ,-s VauW „.,;,,_ 334; Oi oouiaa it n l,v-i;:w conecta with the charr, or tor wiy other cause is Ulegal the corporaöu caunot be bouud thereby. Such are tlu ïolFÍJ M. F.' I. Co. rs. Harvey, 46 Tili: ■ ■ ; "' ! "i caí is whethcr the at can be boimd ,d ;l,,„ eanj a member and oí which he had no BOtiOO. Tuai, 1,1 genera] a immibor of a cprporation is ■ bytlieby-lawo{ a Corporation enacted ■ ■-■'"''■ '' - authoritsj citea abov-o itro f;i upon this poini Lat in tiiis oase there irag a contract between ■ and the questfon i a hy-la-.v. it a corporation can aó raör Ugtion of il ntraot, either with the enactmeiit of y-la-, than oau a .Sute viui.u,, Lta '■' i law , (Juuk L9S ; lAmois C F . , th?ï" ' o il.;. Does ' ■' b, ■..,. i.: i stion ü a u ,1 . ..rnant viólate made uy tni . :1 , . ih ■ ' obli ta'"' „ira,-:,. Ifi .,!,„;,., tjacorioratio.i, it can.,,;, ,,- Babsoqiieni earigW s ri lu thia case Míe iJoal ai DJnMton ímt Ibe """■ ,t".1!'-L roin timo to tune aaito pleasnro. the claimanl proïi oefrtod ■tlirtíieveucc to in, by-lawa and by the el T!'is, i think, cleiiriy :, the by-Uw ahali be thua binding. 'J , .. llv, aro n. t!'"l;l '■■'' the „,;„-„„,.„ auil ara to be binding upon all alike without refereuce to tbe ate oí inemberdhip trac thal limita the power ,i I iltei tatóg%y4wwialnew , o as , l: V, : afore, of this by-law of Juno 1,1.,,... . .„, rtolatetoe contra leried barmony w The special bardghip in the given age of onfwcingaby-lawa ■ 10 had nto nol v ■.-.-htm '!■ deoisiou of ffila ,, ' ,," niotucipal oorporation h ivo uo Ie 'al rizhf to oh ceason tbat th, rtetti 01 hu. ( o. r.v. Góufaer, 17 ïenn., I 16 lii that wue n a ,. , ■,.! .. „ lupany ciü med thu [„ ,v;l, ,,,,ld. by-law-,byi1 ,,'"" èxprê'ss an opinión l'v the temía ót by all the bv-lag oi the oompany, and il the Phl'aP'e eutcase; forte thiaeaaethe ;LS5l':1, "'■"■'■'■s '" '' ':-hll-l,,rs. Tnia is a part ol the oo ■ Nor do the '..;,,■! h that opiuioB .ustion the soundne Iainthsrefo pany isiiotUai,:,.: iu :i,,Ié Cl. WALKEB. HOX. (I. v. X. LOTHBOP'S OPIiUON. n t t. öeteoit, March 2.';, 1873 Bír-J haya witU couaidraWa cara iaited-thc inta , h;,v'r sabriuttBd to roe with n f( naw Mutual Ins. (Jo., and itonghto and tions nnder their by-!aw ofjuueiüth, Is;treltthvelo] ariaingfromthease oí stoaa 1. Idonoi thinkfheSa, It:,. 5th, and larf of tl ;by-lawB printod on the ptrticy have any appiiaation to Uie oase. J l 2 Theby-la-H of JunelOth, 1872, is a teasona1 l cli arly authome 1 of the charter, wüi Beonnty of the pi ciearlv ■■■■" '"'■■'-1- of the ,iu reapeul b in mu nlioiit it. And , tsiii oraboul abanj, ■ -v ■ doclared to ba binding on the mem i i . t)v,v I be withoml iavtí „;, doubt, . ■ . . . . the validity of the b -i. If is wel] settieiithat mi n non must take notice of all va Kjured - pamonaUy partioipated m ita auoption. inquiro what waa the legaleñ 4aw oi Juii i lOth, IS. 'I "I ■ l'l i existiny üwurtw i he mem b ra I ti.is will de-. D i corporator mi r I I Fo- to his insiiraiioe, no reli , com. relftticnoe of a p fchen, it must be pouceded, that no jacre w tjrt I actiiiiiuí the company can affect ur modífv bis contract rights. Alter considerable exomination and reflectiou I am of the opinión that his eontrolling relation to the company is that of a corporaíor, and that tus rightt andprivileges in respect to his insufanee, are not independent oí' this relation. He Iimk no separate contract relation as an asured. He becomes insured and can onhj bocome insured by becoming a inembor of the company. Ho becomes a member by "makina apphcation for insuriiin;" tni by "entering into a vpnttun agreement ttiorefor." Charter, Sec. 17. As such member, and so long as he continúes a member, hi speoifled property, to a ítipulated viilué, remanía insured : and it would Mem tlnit membenhip and nwuranee are irjseparably connected, and that when one ctases the other does also. Seo, 17 and 27. Tilia insurance, tlierefore, as it depends on membership, is in sonie sense to be regardoil as a em-poraU nght. lt is one whic-h each member sharea on equal terms with all the other meiribera; and it grows out of the nature of their mutual assocmtion. Thn terms of insurance are the same to all member and must be so : and this would l)e equaUy tnie ïf classes were made with respect to different kinds of property. The policy that is iBBued, therefore, has hardíy any oilice ezoapt as a specifieation of the property iusured and of the amotmt of the risk. Tf these viows are correct what i the rcsult ? I seems to me to be this ; The assured has all the nghta that flow from and attanh to liis merabership, and none beyond or independent of it. l'hat is, he can have uo ritthta and privileges which flow purely from contract, as rrom ma reiatlon as a corporator. Hú plaoé and privilege as a niembor cannot iT destroyed by the, mero act of the comnany. N i ir .mi his in.sur.mcc be destroyed or be put uuilcr imy special limitation. His rightu must be the Btune as til othei-s. He must have the same rights guavaiiteed to him, as lie and lijs associa(ês, though Uie coinpany, guarautec to each ofcher inembcr. Butthe extent of this guaranty, whera not B ted by the Stat.' law, or the charter, is necesearily the subject of regulation by general bylaw. If this vrere not so, then the company woold have no control over their risks when onc asaume 1. The circumstances might be so chaned by the assured that the risk vvüuld be such that il thus offered in its uevv conditiou it would not bo aocepted. It seoms to me clear that this is inconsistent with the naturo of the Corporation itsolf. The essential idea of such companies is, not for protit bat íor tho mutual protection of its own mem. bers. And n auch companv i.an safely opérate vi! bout thu power to regúlate, witliiu reasonable limite, the oonduct, of its membera in dealin"witli tho subject of the risks ; tliat is, the iusured pioperty. I! ;nii, therofore, of the opinión that the assured does not, in respect to his insurunce, stand to the company in tho position of a Btranger, having a contract with it, but that his relation ' a corporator is the controlling one iu rwpaet tu all his rights m the company, and that iiis dealirtgs illi the instirerl property may be regulated by reasonalilo by-laWï, I reach the condusiou that tho. liy-law ot June lOth, applied to all exratina; members and all existinfr inauTOBoes. ö. I think tlie same conclusión must be reached on narrower grounds. TIkí policy in express terms was declareJ to be "made and aceepted in reference to the ciiarter"ifcc. Kow séctioit 28 of the charter espressly declarod tliat the Director might adopt such oy-iavvs as ■■ttuty raight deen neuessary," "vvith a view to thogreater security of the propertv insured'' : "wliich by-iaws"shall be binding oii tlie memhers of the company." Now tliis is dcplared not with reference to property wliich might be thereafter insured and pensoni who shonld thereafter be memben, but on property insured and on persons then members. In plain words it recognizes the members of the company, and their property whinh they i;ive brought ander the care of mutual protection, as withiu the domain of projier corporate rogulation. I Imve not eifel authorities. From my conrersation with yo;i I know you are familiar with thi'iii. With perhaps one, or at the most two exceptions, they are in.harinony with my reasonm. The case tliat is 'offered stands on what seema to me to be the untenable position, that, as to his insurance, the member of a Mutual Company, is to be règarded as a stranger havini; independent contract rights. Very Truly, &c., Q EU. V. N. LOTHKOP.

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Old News
Michigan Argus