BETTS v. CONNECTICUT INDEMNITY ASS'N.

(Supreme Court of Errors of Connecticut.

1899.)

INSURANCE COMPANIES-RECEIVERS-POWER

TO LEVY ASSESSMENTS AS ASSET-CAPI-
TAL STOCK AS LIABILITY.

1. On an application for the appointment of a receiver for an insurance company, in deter mining the assets of an indemnity association, which has power to levy assessments on its members, no value can be assigned to such pow

er.

2. Charter of the Connecticut Indemnity Association (10 Sp. Laws, p. 616, § 3) provides that such association may commence business when a capital of $50,000 has been subscribed, which shall be in lieu of a reserve. Gen. St. § 2854, provides for a reinsurance reserve, based upon the value of policies; and section 2870 provides that such reserve shall constitute a liability. Held, that under these provisions the capital of the Connecticut Indemnity Association must be treated as a liability in proceedings to appoint a receiver on the ground of insolvency.

3. Under Gen. St. § 2869, providing that if, on the hearing of a petition by the insurance commissioner for the appointment of a receiver for an insurance company, the assets of the company are less than three-fourths of its liabilities, such receiver shall be appointed, a receiver will not be appointed where the assets at the time of filing the petition are less than three-fourths of its liabilities, but at the time of the hearing are more than three-fourths.

Petition for a receiver by Frederick A. Betts, as insurance commissioner, against the Connecticut Indemnity Association. Dismiss

ed.

Theodore M. Maltbie and James T. Moran, for petitioner. John W. Alling, Henry Stoddard, and John P. Kellogg, for defendant.

BALDWIN, J. The defendant's charter (10 Sp. Laws, p. 616) refers (section 1) to its object as "assessment insurance in case of death or otherwise, payments for which may be collected annually or otherwise as agreed," and gives it power (section 2) to "issue policies and certificates of membership." It was also provided (section 3) that it "shall have a working capital" of not exceeding $250,000, and "may commence business under this charter when fifty thousand dollars shall have been subscribed for and paid in to said working capital, which shall be in lieu of a reserve." The same section declares that if, at any time, "the funds collected by assessments and set apart as a mortuary or other fund for the payment of" claims for "indemnity in case of sickness, accident, old age or death, by virtue of a certificate of membership or policy," be insufficient for the purpose, "then said working capital shall be liable for the payment of such claim, and any assets or property of said association may be taken or applied for the payment of the same." In determining the amount of its assets for the purposes of this proceeding, no value, in my opinion, should be assigned to its power to levy assessments. For assessments which have been actually made and collected, the company is entitled to credit, but it probably 44 A.-5

has no right of action for any such dues, even if levied, which remain unpaid. Association v. Hunt, 127 Ill. 257, 20 N. E. 55; Lehman v. Clark, 174 Ill. 279, 51 N. E. 222. Life insurance, whether offered on the assessment plan or in return for stipulated premiums, is ordinarily a unilateral contract, and, if the holders of the defendant's policies are under any obligation to respond to calls, it is one the nature of which has been left so indefinite as to afford no proper basis for its valuation as an asset. The charter provision that the working capital "shall be in lieu of a reserve" must be read in view of Gen. St. §§ 2854, 2870, by which the term "reinsurance reserve” is given a precise meaning. The defendant, by reason of its power to assess its policy holders, was relieved of the necessity of maintaining so large a fund of this character as that required in the case of ordinary life insurance companies; but the place of the fund to the extent of $50,000 (which was the minimum amount that it was required always to maintain) was equally among its liabilities, so far as regards proceedings in insolvency. Its possession of a certain amount of accumulated capital was demanded for the security of its policy holders, and than the $50,000 is confessedly far less than amount of what would have been its proper reserve, had it been incorporated to transact the business of life insurance in the ordinary manner. Gen. St. § 2869, provides that if, upon the hearing of a petition of this character, the assets of the company are found to be less than three-fourths of its liabilities, a receiver shall be appointed. Proceeding upon the basis of estimate stated above, I have found that the assets of the defendant were, when the petition was brought, less than three-fourths of its liabilities. I have, however, also found that, pending the petition, its liabilities have been so far reduced that at the date of the hearing they were less than its assets. In my opinion, the statute makes the time of the hearing (provided the door has been opened by proper pleadings) that as of which the financial condition of the company is to be ascertained. If every claim against the defendant had been discharged, and it owed nothing, except by virtue of its obligation to maintain a working capital of at least $50,000 taking the place of the ordinary insurance reserve, its possession of assets to that amount would clearly make it useless to appoint a receiver. The function of such an officer, under this statute, is to wind up an insolvent company. If the company is not insolvent, there can be no occasion for the termination of its existence. The defendant still has outstanding liabilities, but they amount to less than its assets, and these largely exceed $50,000 in value. There would seem to be no difference, in point of law, between the standing, in a proceeding of this character, of a company which, during its pendency, has absolutely freed itself from debt, and one remaining in debt, but to an

sume the duties and burdens incident to the acquisition of the new territory. Pierpoint, J., in discussing the subject of the settlement of paupers, upon the annexation of the territory upon which they resided in one town. to another town, though not deciding this point, said that such persons were left to the application of the general principle applicable to such cases; that the rule established in other states having pauper laws similar to ours was "that such persons stand in the same relation to the town to which the territory in which they lived was annexed, as regards their settlement therein, as they occupied to the town from which such territory was taken, there being no express statutory provision on the subject." Town of Wilmington v. Town of Somerset, 35 Vt. 232. Collamer, J., remarked in Town of Corinth v. Town of Newbury, 13 Vt. 496: "But the existence and extent of a town as a municipal corporation, with all its civil privileges and duties, depend, not on the charter, but on laws, subject to constant changes, and its geographical limits liable to alteration. To the same limit that its jurisdiction extends to exact of the citizens taxes, duties, and allegiance do also extend the corresponding municipal obligations to obligations to sustain schools, roads, and paupers. Such rights and duties are correlative and inseparable." See 18 Am. & Eng. Enc. Law, 798; Inhabitants of Groton v. Inhabitants of Shirley, 7 Mass. 156; Town of Oxford v. Town of Bethany, 15 Conn. 246; Overseers of Poor of Bethlehem Tp. v. Overseers of Alexandria, 32 N. J. Law, 66. By the term "settlement" is meant such a residence in a town as entitles a person to support or assistance upon becoming a pauper. When a person acquires a settlement in a town, a duty is imposed upon that town to furnish him support if he become poor and in need of assistance. By the settlement act, were it in force, this pauper, down to the time the Gore was annexed to Newport, would have had her settlement in Coventry, with a right to be supported by that town. Under the section of the statute above quoted, she had a three-years residence in that town, with the same right to support or assistance. Upon the annexation of the Gore, upon which she resided, to Newport, her settlement and right to support would have been transferred to that town. Does the rule apply under the residence act? The plaintiff contends that the liability of towns to support their paupers is purely statutory, and that it is entitled to reimbursement from defendant town upon the ground that that was the town of the pauper's last threeyears residence. That the liability of towns is statutory is established by the cases decided by this court and cited upon plaintiff's brief. We think, however, that the pauper's residence, with the right to support incident thereto, was transferred to Newport by the annexation of the Gore to that town by legislative authority. Newport took the territory

and the inhabitants thereon, with the liability of assisting and maintaining them if they became poor and in need of relief, as it took the highways with the duty of maintaining and keeping them in repair. This holding is irrespective of the statute, and upon the common-law principle that Newport took the territory with the incidental benefits and burdens.

The plaintiff claims that R. L. § 2811, subd. 9, provided that the settlement of paupers should go with the territory transferred, and that upon the repeal of that statute there was no authority of law for the transfer of the settlement of paupers when the entity of the town in which they had been settled remained. We think this is not the true construction of the statute. It was the common-law rule that persons having a settlement, and residing upon the land transferred, went with the land, in respect to their settlement. There must have been both a settlement and an actual residence or home upon the land when the act authorizing the annexation was passed. Persons not then residing upon the land, though having their settlement there, did not go with the land. 18 Am. & Eng. Enc. Law, 793; Town of Mason v. Town of Alexandria, 3 N. H. 303; Inhabitants of Westborough v. Inhabitants of Franklin, 15 Mass. 254; Inhabitants of Brewer v. Inhabitants of Eddington, 42 Me. 541. It was to meet this state of the law that R. L. § 2811, subd. 9, was enacted, providing that a person having "a legal settlement therein, but being absent at the time of such division or annexation, and not having acquired a legal settlement elsewhere, shall have a legal settlement in that town wherein his last dwelling place or home is upon such division or annexation." This statute was so construed in Town of Wilmington v. Town of Somerset. City of Rutland v. Town of Proctor, 68 Vt. 153, 34 Atl. 427, is not a case in point for the plaintiff. There the latter town was created from territory formerly belonging to Rutland. The only point decided was that, in computing the three-years residence, the time of the pauper's residence in Rutland before the incorporation of Proctor could not be considered, though the entire residence was upon upon the same territory. Judgment reversed, and judgment for the defendant.

START, J., dissents. TAFT, C. J., concurs in the result. Will not say Newport is liable.

PAGE v. WARNER et al. (Supreme Court of Vermont. Chittenden. April 13, 1899.)

JUSTICE OF THE PEACE-JURISDICTIONAMOUNT INVOLVED.

Under V. S. § 1040, giving justices of the peace jurisdiction of civil actions, except those

specified, "where the debt or demand does not exceed $200," a justice of the peace has jurisdiction of an action to recover a balance of less than $200, due on a judgment, although the original judgment exceeded $200.

Exceptions from Chittenden county court; Ross, Judge.

Action by Kate L. Page against C. H. Warner and another. From a judgment for plaintiff, defendants except. Affirmed.

The action was begun before a justice of the peace, and a motion was there made that it be dismissed for want of jurisdiction. The motion was overruled, and an appeal taken by the plaintiff. The motion was renewed in the county court at the September term, 1898, Chittenden county, Ross, J., presiding, the copy of the original record of the judgment and the execution and return thereon being made a part of the motion. The motion was overruled, and judgment rendered for the plaintiff.

Brown & Macomber, for plaintiff. G. W. Kennedy, for defendants.

TYLER, J. By V. S. § 1040, justices of the peace have jurisdiction of all actions of a civil nature, except those specified, where the debt or other matter in demand does not exceed $200. In this case the original judgment was for $249.15. Execution was issued, property was levied upon and sold, and the proceeds applied, so that, when this suit was brought, there remained due upon the judgment only the sum of $145.52 and interest. The defendant insists that the test of jurisdiction is the amount of the judgment recovered, and not the amount remaining due when the action is brought; but this is not maintainable, either upon principle or authority. The same question has been many times, though in different forms, before this court. In Southwick v. Merrill, 3 Vt. 320, the court said: "Where the want of jurisdiction appears from the face of the writ, the defendant may avail himself of the objection by plea; but where, from the writ, the court prima facie has jurisdiction, but it appears on trial, from the plaintiff's own showing, that his debt or demand is not of sufficient amount to give the court jurisdiction, the course is to dismiss the action on motion." The converse of this is true in the present case, for the declaration and the claim presented showed jurisdiction in the justice. It was said in Miller v. Livingston, 37 Vt. 467, that the "matter in demand," as used in the statute, meant "the plaintiff's cause of action"; or, in other words, "it is the claim which the plaintiff brings his suit for the purpose of enforcing." See Shoe Co. v. Dechenes, 68 Vt. 387, 35 Atl. 335. If the plaintiff had brought her suit in the county court, and her declaration had shown the part payment of the judgment, or if she had declared for the full amount of the judgment, and the part payment had been shown at the trial, the action must have been dismissed as "cognizable by a justice." Judgment affirmed.

BELLOWS v. SOWLES et al. (Supreme Court of Vermont. Franklin. Feb. 3, 1899.)

ACTIONS-DEBT ON JUDGMENT-EXECUTION

LEVY-RETURN-EVIDENCE-PARTIES-EX

CEPTIONS-WAIVER-HARMLESS ERROR.

1. Whether an action is in case or debt is to be determined from the facts alleged in the declaration, and not from what the pleader may have inadvertently called it.

2. A declaration in debt on a judgment, stating that the judgment remains in full force, and unsatisfied in part, to wit, for a certain sum, sufficiently alleges that the judgment is unsatisfied.

3. The fact that a return showed a levy on realty, and nothing more, and that the execution was returned unsatisfied, does not render the execution inadmissible in an action of debt on the judgment on which it was issued.

4. The mere levy of execution on lands does not operate as a satisfaction of the execution. 5. Where a command in an execution was to collect "50 cents for a former writ," this sufficiently showed it to be an alias execution.

6. In an action of debt on a judgment, the testimony of the clerk of the court is competent to identify an alias execution issued thereon.

7. In an action of debt on a judgment, error in admitting evidence respecting an agreement between plaintiff and another to share equally the avails of their respective suits against defendant is harmless, as it could not affect the finding in respect to any fact material to determine the rights of the parties.

8. In an action of debt on a judgment, where defendant claimed the judgment had been satisfied by an arrangement between him and plaintiff of record, it was competent to show assignments, of which defendant had notice, by which others became the real plaintiffs in interest.

9. Introduction of evidence by defendant after overruling a motion for judgment in his favor waives exceptions to the ruling.

10. Exceptions to the rendition of final judgment will not reach the objection that the judgment was too large, the judgment being based on the findings of facts, to which there was no exception on the ground that it was not supported by the evidence.

Exceptions from Franklin county court; Munson, Judge.

Action of debt on a judgment by James F. Bellows against Edward A. Sowles, defendant, and another, trustee. There was a judgment for plaintiff, and defendant excepts. Affirmed.

Wilson & Hall, Ballard & Burleson, and Farrington & Post, for plaintiff. Edward A. Sowles, in pro. per.

THOMPSON, J. 1. The defendant insists that this action cannot be maintained, because, as he says, the plaintiff has declared in case, instead of debt. As this is an action to recover the amount due on a judgment of the county court, it is true that debt is the proper form of action. Although, in the copy of the writ furnished this court, the count begins with the words, "In a plea of the case," yet what follows is a declaration in debt on a judgment, and such misnomer does not change its character, and it is to be held to be what it is in fact, and not what the pleader may have inadvertently called it. Coggswell v. Baldwin, 15 Vt. 411.

2. There was no variance between the record of the judgment admitted in evidence and the judgment described in the declaration.

3. To the admission of the execution issued on the judgment in suit the defendant excepted on the grounds that the declaration did not sufficiently allege that the judgment was unsatisfied, and because the officer's return shows a levy on real estate and no further action upon his part, and because such return is insufficient. The declaration sufficiently alleges that the judgment was unsatisfied. Its language is, "Which judgment remains in full force and unsatisfied in part, to wit, for the sum of $8,123.17." The fact that the return showed a levy on real estate, and nothing more, and that the execution was returned unsatisfied, did not render the execution inadmissible. The mere levy of an execution on lands does not operate as a satisfaction of such execution. Freem. Ex'ns, § 282; 7 Am. & Eng. Enc. Law, 157. There was no error in admitting this execution. Nor was it error to admit in evidence the alias execution. It showed on its face that it was such an execution by the command therein to collect "fifty cents for a former writ." It was also competent to receive the testimony of Wilbur P. Davis, the clerk of the court, to identify this execution.

4. If it were error-which we do not decide to admit evidence in respect to the agreement between the plaintiff and Osman F. Bellows to share equally the avails of their respective suits against the defendant, it was harmless error, as it could in no way affect the finding of the court in respect to any fact material to determine the right of the parties to this suit.

5. It was admissible to show the assignments, of which defendant had notice, by which Wilson & Hall, Farrington & Post, and George A. Ballard became the real plaintiffs in interest, especially in view of the claim by the defendant that the judgment had been satisfied by an arrangement between him and James F. Bellows, the plaintiff of record.

The introduction of evidence by the defendant, after his motion for a judgment in his favor had been overruled, waived his exception to this ruling. He also contends that his exception to the rendition of final judgment should now be sustained on the ground that the judgment was $1.60 too large. There was no exception to the finding of facts on the ground that they were unsupported by evidence. The final judgment was for the amount named in the finding of facts, which must be taken to be conclusive as to the sum due. Were it conceded that the judgment is $1.60 too large, it would not avail the defendant. A party cannot stand by in the county court, and suffer it to enter judgment on what he knows to be an erroneous verdict or finding of facts, and not call the attention of the court to the error in any way so that it may be corrected, and then be heard to impeach the judgment for errors which he knew

existed, and which he might have had corrected by calling the attention of the county court to them. Wilson v. Blake, 53 Vt. 305. It having been found that the judgment in suit had not been satisfied, as claimed by the defendant, the plaintiff was entitled to a judgment on the facts found. Judgment affirmed, and case remanded to be proceeded with as to trustee.

HOLT v. LADD et al.

(Supreme Court of Vermont. Orange. Jan. 12, 1899.)

GARNISHMENT - FOREIGN RAILROAD - SERVICE ON RESIDENT AGENT-CHATTEL MORTGAGE-PRESUMPTION OF OWNERSHIP.

1. A nonresident railroad operating a leased line within a state through a superintendent residing therein is liable to trustee process as to debts in its hands contracted in operating the road in the state, and payable there.

2. Such debts are attachable by service on the resident superintendent, under V. S. § 1310, making them attachable by trustee process duly served on the "authorized agent" of such nonresident debtor.

3. Where a chattel mortgagee takes possession, and appoints the mortgagor his agent to manage the business, and the agent makes sales on credit, and reports them to the mortgagee, and the purchaser knows of the mortgage before he is garnished by a creditor of the mortgagor, as between mortgagor and mortgagee the debt belongs to the latter; and, where the evidence in the garnishment proceedings fails to show whether the mortgagee took such debt into account in ascertaining the amount due in the foreclosure, the presumption is that he did, and hence that he owns the debt as against the attaching creditor.

4. A mortgagee of machinery is not entitled to an indebtedness accruing to the mortgagor from the use of the machinery before possession was taken under the mortgage.

Exceptions from Orange county court; Start, Judge.

Trustee process by H. H. Holt against A. P. Ladd and others, defendants, the Boston & Maine Railroad Company, trustee, and the Citizens' Savings Bank & Trust Company, claim

Heard on commissioner's report. Trustee was adjudged liable in the sum of $145.21. Claimant excepts. Exceptions sustained, and judgment reversed.

The trustee, the Boston & Maine Railroad, is incorporated under the laws of Maine, Massachusetts, and New Hampshire. When this trustee process was served, it was operating the Passumpsic Railroad, in Vermont, under a lease. The leased road is known as the "Passumpsic Division of the Boston & Maine Railroad." Its principal office is in the town of Lyndonville, Vt., in charge of the division superintendent, who resides in the same town, and has charge of the Vermont business of said division. The employés are paid directly by the trustee, and not through the division superintendent. Before their insolvency, Babcock & Howard had a contract with the Boston & Maine Railroad to pump water through an aqueduct belonging to the railroad into a tank, for which they