Stewart v. Lee Mutual Fire Insurance

Citations

• 64 Miss. 499

Syllabus

<p>1. Mutuai, FiRE Insubance Association. Contract with. Power of directors to vary.</p> <p>The entire management of the “ Lee Mutual Pire Insurance Association” was by its charter placed in the hands of a board of directors. The association accepted members on the payment of certain fees, assessments, and dues, and issued to them policies of insurance, by which it was agreed that on the destruction by fire of the property insured the association would order and collect an assessment from every other policy-holder for the benefit of him whose property was burned. .Held, that the contract could not be varied by the directors by means of a by-law, so as to put an assured in a particular class which called for an assessment only on the policy-holders of that class, unless the assured knew of and assented to such by-law.</p> <p>2. Same. Failure of officers of to levy assessment. Liability of company.</p> <p>And in such case if the directors fail or refpse to levy an assessment as provided for in the policy, the association is liable in damages to the full extent of the policy-holder’s rights, although the directors honestly believe that they could only be required by law to make the levy provided for in the by-law referred to.</p> <p>3. Same. Misappropriation of funds. Liability of directors.</p> <p>And if the directors of such insurance association have divided among themselves and other incorporators and paid out for taxes and attorneys’ fees certain funds which ought to be applied to the payment of losses by policyholders, they are personally liable to a policy-holder having a good claim for loss against the association, though the misapplication of funds was made in good faith.</p> <p>4. Same. Liability of officers for misappropriations of funds.</p> <p>But officers of such association, whose duties are executive and who are subject to the direction and control of the directors are not liable for such misappropriation of funds, if they have simply performed their du