## Facts

- Virginia chartered a mutual fire insurance corporation in 1794 to insure buildings and to allocate losses and expenses among insured members according to the sums insured.
- Under the original arrangement, town and country properties were pooled so that members broadly shared fire-loss liability across locations.
- Loss experience in towns exceeded that in the country, prompting legislative action.
- In January 1805, Virginia enacted a statute separating town and country interests and risks so that town members were not liable for country losses and country members were not liable for town losses; the statute was requested by a majority of members, present or represented pursuant to an earlier authorization.
- After the 1805 statute, the Society’s directors adopted a February 25, 1805 resolution imposing a “quota” assessment.
- The Society sued James Currie (a town member) to collect the quota; the District Court of Petersburg entered judgment for the Society for $291.73 based on the board resolution signed by the Society’s president.
- Currie’s administrators appealed, challenging the validity of the legislative change, its binding effect on absent members, and the authority of the president who signed the assessment.

## Issues

1. Whether the General Assembly could validly alter the Society’s chartered structure by separating town and country risk pools when the change was sought by the Society’s majority and did not violate a fundamental charter principle.
2. Whether a member was bound by the 1805 statutory change and resulting assessments despite not personally attending the meeting at which the change was requested.
3. Whether the Society validly elected its president where the charter contemplated a president chosen “out of” three directors, and whether the president’s signature could authenticate the assessment resolution.

## Decision

- The Supreme Court of Appeals of Virginia affirmed the judgment for the Mutual Assurance Society.
- The court held the 1805 statute valid because it did not destroy the mutual-assurance principle; it reallocated risks while preserving mutual liability within each separated class.
- The court held Currie bound by the statutory change because the Society acted through majority decision-making and authorized representation; corporate action taken within charter powers bound all members.
- The court held the president’s election valid even if he was chosen at the same time as the other directors without a prior, separate appointment as a director; his acts, including signing the assessment resolution, were effective.

## Legal Principles

- Legislative modifications affecting a corporation’s internal arrangements may be effective when requested or accepted through the corporation’s authorized governance and when no fundamental charter principle is abrogated.
- A mutual insurance charter’s core mutuality principle can remain intact despite restructuring into separate risk pools, so long as members remain mutually liable within the defined class.
- Corporate decisions made through authorized majority processes, including representation mechanisms permitted by law, bind members who were absent from the meeting.
- Officer-election irregularities that do not defeat the substance of authorized corporate choice will not invalidate corporate acts where the election occurred at a legally constituted meeting and the officer acted within apparent corporate authority.

## Conclusion

The court enforced the Society’s quota assessment, concluding that the legislature’s separation of town and country risks—sought by a corporate majority—preserved the mutual insurance scheme, bound all members, and was implemented through valid corporate governance, including the president’s election and execution of the assessment resolution.


Currie’s Adm’rs v. Mut. Assurance Soc’y, 14 Va. (4 Hen. & M.) 315 (Va. 1809)