INSURANCE

CHAPTER 4.

INSURANCE OTHER THAN LIFE.

Section 1687. Name.

An insurance company, although authorized to do business by the auditor of state, may be enjoined from using a name which is so similar to the name of a foreign insurance company authorized to do business in the state that it is calculated to deceive the public. Atlas Assurance Co. v. Atlas Insurance Co., 112 N. W., 232.

Sec. 1689. Kind of company.

The provisions as to mutual benefit associations are distinct from those for the incorporation of mutual companies, and the statutory requirement that the word "mutual" shall be included in the name of the company organized under the latter provisions has no application to such a society. Moore v. Union Fraternal Acc. Assn., 103-424.

Sec. 1690. Stock or mutual.

A mutual company cannot issue policies upon the stock plan, and such policies, if issued, are illegal and void. Smith v. Sherman, 113-601. A company issuing a policy on the stock plan will be presumed to have authority to issue such a policy until the contrary appears. One Contracting with the company is not bound to know at his peril whether the company has complied with the condition authorizing it to do a stock insurance business. Harris-Emery Co. v. Pitcairn, 122-595.

Where a company organized on a mutual plan issued policies of insurance on the stock plan, held, that such policies were invalid and that members of the company were not subject to assessment for losses under such policies. Cory v. Sherman, 64 N. W., 828.

Sec. 1692. Premium notes of mutual company.

While it is improper and unauthorized in a mutual company to make contributors to a guarantee fund members of the corporation and require directors to be selected from their number, yet it is not in itself illegal to create a guaranty fund and provide for the repayment of money so advanced by the contributors to such fund when it can be raised by assessments on the members, and the invalid provisions making such guarantors members of the company will not render the guaranty fund notes given by them void. Berry v. Anchor Mut. F. Ins. Co., 62 N. W., 681.

Failure of a party giving such guaranty note to pay an assessment thereon without notice may by the terms of the contract forfeit prior payments made and credits received by him and defeat his right to recover such payments from the company. Ibid.

Sec. 1698. Secretary and other officers-by-laws-records.

While members of a mutual company may be bound by by-laws adopted after they become members, nevertheless the terms of a policy of insurance will be presumed to be governed by the by-laws in force when it is issued, and not to be affected by those subsequently adopted. Farmers' Mut. Hail Ins. Assn. v. Slattery, 115-410.

By-laws duly adopted, but not posted as required by law, are vaild and controlling as to all persons informed of their existence, the posting being required for the sole purpose of imparting constructive notice, and if the existence of the by-laws is expressly recognized, the person who receives such certificate is bound thereby. Fee v. National Masonic Acc. Assn., 110-271.

The directors of an insurance company organized under this chapter, whether doing business under the ordinary or mutual plan, have the right to ordain and establish by-laws and regulations. The parties may by contract mutually agree to the waiver of a by-law. Houdeck v. Merchants' and Bankers' Ins. Co., 71 N. W., 354.

Sec. 1699. Funds invested.

While as between the state and the company the investment of its surplus in bank stock may be unauthorized, such a transaction entered into by the officers for the purpose of avoiding loss to the company may be so ratified by the directors in taking advantage of the benefits thereof as to estop the corporation from treating the transaction as ultra vires. Fidelity Ins. Co. v. German Sav. Bank, 127-591.

Sec. 1706. Settlement of losses.

The authority of making assessments conferred on the directors is exclusive and cannot be exercised by other officers under the direction of such directors. Farmers' Milling Co. v. Mill Owners' Mut. Fire Ins. Co., 127-314.

Sec. 1709. Kinds of insurance-limitation of risk-any company.

A policy of insurance against loss by burglary, although issued prior to 28 G. A., ch. 60, is valid. Bankers' Mut. Cas. Co. v. First National Bank, 131-456.

The statutory provision authorizing insurance against "loss or damage by fire or other casualty" is sufficiently broad to cover such casualty as burglary. Ibid.

In ordinary usage, "casualty" is commonly applied to losses and injuries which happen suddenly and unexpectedly, not in the usual course of events, and without any design on the part of the person suffering the injury, although the result is brought about by the conscious or intended act of another. Ibid.

An association organized by a railroad company for the benefit of employes who participate therein by payment of indemnity in case of accident or death is not within the provisions of the statutes as to insurance. Maine v. Chicago, B. & Q. R. Co., 70 N. W., 630.

Sub-division 5-accident defined. An accident within the meaning of a policy of insurance which provides that the injury must occur "through external, violent, and accidental means," is a result, the inducing cause for which was not put in motion by the voluntary and unintentional act of the person injured. Payne v. Frat. Acc. Assn., 119 Iowa, 342.