Mutual Life Insurance v. McSherry

Yellott, J., delivered the opinion of the Court. The appellant was authorized by the Act of incorporation to acquire property, not exceeding one hundred thousand dollars, as a guarantee capital for its business. John A. McSherry, the appellee’s intestate, was a director in said corporation, and, on July 1st, 1873, contributed $10,000 to this guarantee capital in the form of a demand note to the order of Rand, McSherry & Co., and endorsed by that firm. John A. McSherry continued "to be a director of the corporation until November 28th, 1874, on which day ⁴³ his death occurred, and the appellee and Joseph H. Audoun were appointed his administrators by the Orphans’ Court of Baltimore City.

At the time of giving the note, already mentioned, there was a By-Law of the corporation which provided that “In case of the resignation, displacement or death of any director who holds any portion of the guarantee capital, the securities or property contributed by him to said guarantee capital, shall be returned him or his representatives by the board thirty days after the election of his successor.” On the 5th of April, 1876, the appellee was elected a director to fill the vacancy caused by the death of the said John A. McSherry. There can be no doubt that, thirty days after his election to fill the vacancy, he and his co-administrator could, in conformity with the provisions of the By-Law, have demanded and would have been entitled to receive the note for $10,000 given by his intestate as his contribution to the guarantee capital of the company. But no such demand was made. On the same evening when the appellee was elected a director, he and his co-administrator being present, a resolution was unanimously adopted to withdraw all except twentjr per cent, of the guarantee capital, that being necessary “ to restore the reserve assets of the company to the required legal standard.” It was further provided, by this and a subsequent resolution, that the company should issue scrip for the amount of the assessment; “ such scrip, principal and interest, payable as soon as the reserve assets of the company shall exceed the reserve required by law and the amount of scrip authorized and §10,000.” It is shown by proof in the record that the reserve assets of the company have never, since June 20th, 1877, exceeded the reserve required by law and the amount of scrip authorized to he issued by the resolution of April 5th, 1876, and $ltf,000. ⁴⁴ On J une 20th, 1877, the appellee’s co-administrator, who liad charge of the funds and all the arrangement of the estate, as is shown by the appellee’s testimony, gave his check to the appellant for $2000, being 20 per cent, of the amount contributed by his intestate to. the guarantee capital, and received a certificate in conformity with the resolution of the company, and had the note for $10,000, originally given by his intestate, returned to him at the same time.

There was subsequently an allowance for this payment in the administration account. The death of the appellee’s co-administrator occurred in April, 1884, and this suit was instituted in November, 1886, for the purpose of recovering the $2000 paid by him in June, 1877; or more than nine years before-the commencement of the action. There are, in this record, no prayers for instruction's offered by the plaintiff in the Court below, and the only questions which can be considered and determined by this Court are such as are presented by the exceptions taken to the rejection of all the defendant’s prayers except the sixth. The first prayer of the defendant asks the Court to say to the jury that, assuming the evidence of the plaintiff to be true, and giving him the benefit of every inference which could be reasonably drawn to his advantage from it or from that offered by the defendant, he has made out no such case as could entitle him to their, verdict under the issues joined in the cause, and their verdict must, therefore, be for the defendant.

The view which we take of this case renders it unnecessary to determine anything in relation to the ruling on this prayer. The second and third prayers of the defendant are founded on its plea of limitation. The appellee, in his replication, meets this plea by averring a fraudulent concealment of his cause of action by the defendant, and alleges that he brought his action within three years from the time when he could, by usual and ordinary diligence, discover the fraud. These averments are put in issue by the ⁴⁵ defendant’s rejoinder.

The proof adduced