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instituting of the receivership proceeding. The acts of the association were
binding in all respects upon these members.
Wardle v. Hudson, 96 Mich. 432, 55 N.W. 992 (1893). An action brought by the
receiver of an insolvent mutual insurance company to recover an assessment
levied against a member, by order of the court in liquidation proceedings, was
barred by the statute of limitations as it was not commenced within six years
after the assessment fell due.
Wardle v. Townsend, 75 Mich. 385, 42 N.W. 950 (1889). The court upheld the
validity of an assessment by the receiver of an insolvent mutual insurance
company as being unreasonably excessive. the court held that, as some of the
assessments may reasonably be expected to prove uncollectible, the receiver
may make the aggregate assessment large enough to cover all probable
deficiencies. Furthermore, costs were properly awarded to the receiver,
although the sum recovered was less than the statutory prescribed amount,
$100.00.
Minnesota
Dwinnell v. Felt, 90 Minn. 9, 95 N.W. 579 (1903). An insured brought suit to
recover an assessment paid to an insolvent insurance company on the basis
that there was inducement to accept the insurance policy upon the
representation that there would be no contingent liability. The court denied
recovery because the policy stated that the insurance company was a mutual
company and the insured was subject to pay assessments. The insured also
could not bring a defense of fraudulent misrepresentation when the policy was
retained and the policyholder received the benefits of the insurance.
In re Minneapolis Mutual Fire Ins. Co., 49 Minn. 291, 51 N.W. 921 (1892). The
court held that premium notes of the members of the insolvent mutual insurer
were subject to assessment to pay such unearned premiums.
Langworthy v. C. C. Washburn Flouring‐Mills Co., 77 Minn. 256, 79 N.W. 974
(1899). The receiver of an insolvent mutual fire insurance company brought
suit to recover an assessment. The insurance company issued two policies to
the policyholder in consideration for two premium notes executed by the
policyholder. The policyholder challenged the collection of notes on several
grounds. First, it argued that the insurance company had no power to insure
the policyholder's flour mills. The court rejected this argument and held that
the policyholder, regardless of the interpretation of the insurance company's
charter, was estopped from questioning the validity of the insurance contract
because it had benefited from the insurance contract and the insurance
company had borne its burden under the contract. Further, the assessment
may include the expenses of winding up the affairs of the insurance company
because the payment of the expenses of the company, as well as its losses,
was secured by their premium notes.
Swing v. Cloquet Lumber Co., 121 Minn. 221, 141 N.W. 117 (1913). Members of an
insolvent insurance company had given the insolvent insurer a premium note
which was subject to assessment for losses and expenses. The insurance
policy provided that no member would be liable for losses and expenses in an
amount greater than the notes given by the policyholders. The policyholders
also argued that the notice of assessment was invalid because it stated an
amount in excess of the amount for which the policyholder was liable and it
was incorrectly stated the time within which the assessment should be paid.
The court held that these errors in the notice of assessment did not make it
invalid because the notice incorporated the decree in full and the decree
indicated the precise amount assessed on account of the policy and the time
within which the assessment should be paid. However, the court agreed that
the policyholders should receive credit for the amounts previously paid on the