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The 192nd General Court of the Commonwealth of Massachusetts

Section 84: Mutual fire companies; review or order of assessment by supreme judicial court

Section 84. If the directors by authority of law make an assessment or call on the members for money, or vote that there exists a necessity therefor, they or any person interested in the company as an officer, policyholder or creditor may apply to the supreme judicial court for any county, by a petition in equity, praying the court to examine such assessment or call, the necessity therefor, and all matters connected therewith, and to confirm, amend or annul the assessment or call, or to order the same to be made as law and justice may require; but if an application is made by any party except the company, or a receiver, or the commissioner, the court may decline to exercise jurisdiction thereof. If the directors unreasonably neglect to make an assessment or call to satisfy an admitted or ascertained claim upon the company, any judgment creditor, or any person holding such claim, or the commissioner, may make the application to the court. Upon such application, if made by the directors, or upon an order of the court, if made by any other person, the directors shall set forth the claims against the company, its assets, and all other facts and particulars appertaining thereto.

The court shall order notice by publication or otherwise to all parties interested, and upon the return thereof shall examine the assessment or call, or the necessity therefor, and all matters connected therewith. Any parties interested may appear and be heard thereon. All questions arising shall be heard and determined as in other equity cases.

The application shall be referred to an auditor, who shall appoint a time and place to hear all parties interested, and shall give personal written notice thereof to the commissioner, and by mail, so far as he is able, to all persons liable upon said assessment or call. The auditor shall hear the parties, and report upon the correctness of the assessment or call, and all matters connected therewith. The court may confirm, amend or annul the assessment or call, or order one to be made, and may make such orders and decrees as under all the circumstances justice and equity require. If the assessment or call is altered or amended, or one is ordered to be made, the directors shall forthwith proceed to vote the same in legal form, and the record of such vote shall be set forth in a supplemental bill or answer.

When an assessment or call has been so confirmed, ascertained or established, a decree shall be entered which shall be final and conclusive upon the company and all persons liable to the assessment or call as to its necessity, the authority of the company to make or collect it, the amount thereof, and all formalities connected therewith. An assessment or call altered or amended by vote of directors and decree of the court thereon shall be binding upon all parties who would have been liable under it as originally made, and in all legal proceedings shall be held to be such original assessment or call. All such proceedings shall be at the cost of the company unless the court for cause otherwise orders, and in all cases the court may control the disposition of the funds collected under such proceedings.

If the court finds that the net proceeds of any assessment or call will be insufficient to furnish substantial relief to those having claims against the company, it may decree that no assessment shall be collected; and if, upon the application of the commissioner or a member of the company or of any person interested, the court is of opinion that further attempts to collect an assessment then partially collected will not benefit those having claims against the company, it may stay the further collection of said assessment.