Smith v. Republic County Mutual Fire Insurance

Citations

• 82 Kan. 697
• 109 P. 390
• 1910 Kan. LEXIS 324

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Mutual Insurance — Fire, Lightning and Tornado — Assessment on Premium Notes. Under the act relating to the organization and control of mutual fire, lightning and tornado- ■ insurance companies (Gen. Stat.- 1909, art. 5, ch. 55) the liability of a member to assessment on his premium note extends: to the following purposes, and no other: First, to maintain a. reserve fund equal to ten per cent of all the premium notes in force (Gen. Stat. 1909, §4227); second, to pay losses which-may accrue, and defray expenses (Gen. Stat. 1909, §4216)..</p> <p>2. - Illegal Assessment. An assessment of premium notes not necessary to maintain the reserve fund at ten per cent of' the premium notes in force and not necessary to pay losses or expenses, but levied merely for purposes to be developed in the future, is illegal.</p> <p>3. --- Same. A company with $4,000,000 at risk held notes-. to the amount of $85,463. It held mortgage loans to the-amount of $20,455, $8546 of which constituted its reserve fund. It had cash on hand in the sum of $4011. Its liabilities were-slightly in excess of $600. Held, an assessment of the premium notes under those conditions was illegal.</p> <p>4. -- Guaranty Fund — Assessments. Section 2 of chapter-273 of the Laws of 1905 (Gen. Stat. 1909, §4241), authorizing mutual companies having certain qualifications to establish a guaranty fund and to increase the same from time to-time, does not permit the assessment of premium notes - directly for such purposes.</p> <p>5. - Contract — By-laws—Signature. The assignee of a policy holder who signed an application agreeing to accept his policy subject to the by-laws of the company, a copy of which application was attached to the policy when issued, can not be heard to say that the by-laws are not a part of the contract, although the copy of the by-laws attached to the policy was not signed in accordance with section 4226 of the General Statutes of 1909.</p>