16 Barb. 280 | N.Y. Sup. Ct. | 1853
In framing a general law for the organization of insurance companies, it was an object of the first importance to provide security for the payment of liabilities. To effect this object, the 5th section of the act requires a capital to be raised
It has been supposed that the propositions for insurance which the company, by the 4th section of the act, is authorized to receive, must, to make the transaction valid, contain a specific description of the property to be insured, so that the company, when it should have complied with the other requirements of the act and be ready to commence business, might make out its policies in accordance with the proposition. But I do not understand that any such thing was contemplated by the legislature. The object of the legislature, as we have seen, was to provide a sufficient capital for the security of creditors. To do this, in the case of mutual insurance companies, a specified amount of notes was requisite. The consideration of these notes was to be future insurance. Whether that insurance should ever be effected or not, was a matter with which the legislature had no concern. Its end was gained, if the notes were made. These were to be given, not upon contracts of insurance, but upon agreements on the part of the company that it would, upon request, after it should be fully organized, enter into contracts of insurance with the makers. When such contracts should be made, the premiums paid thereon would probably reduce the
Again; it is objected that the note of the defendant is not such a note as by the 5th section of the act the company was authorized to receive as a part of its capital. The notes so to be received are required to bg payable “ at the end of, or within, twelve months from the date thereof.” This note is payable “ in such portions, and at such time or times, as the directors of the company may agreeably to their charter and by-laws require.” In other words, it is payable on demand. The object of the legislature, obviously, was, to have the capital of the company available for the payment of debts, when required. It cannot be pretended that a note which, in legal effect, is payable on demand, is not as available for the purposes of the company, as if payable at a specific time within a year from its date. Indeed, I think a note payable on demand may well be said to be payable “ within twelve months from the date thereof.” It is enough that there has been a substantial compliance with the requirement of the statute in this respect. I am of opinion, therefore, that the proposition of the defendant for insurance and the acceptance of that proposition by the company, and the execution of the note by the defendant, were in conformity with the statute, and that enough appears upon the face of the complaint
But had there been any failure of the company to conform to the requirements of the statute, I do not think the defendant would have the right to avail himself of the objection. He made ■a proposition for insurance to the company, assuming that it had legal capacity to entertain such a proposition, and enter into an agreement with him in accordance with his proposition. Such an agreement was entered into between him and the company. He has received the benefit from the agreement for which he stipulated. He has been credited and paid for the use of his credit as a part of the capital of the company. It does not lie with him now, when called upon to perform the agreement on his part, to say that his proposition was not such as the statute contemplated, or that the company had not legal authority to contract with him. (Brouwer v. Appleby, 1 Sand. S. C. R. 168. Palmer v. Lawrence, 3 Id. 170. Dutchess Cotton Manufactory v. Davis, 14 John. 238.)
Nor can the objection that the assignment under which the plaintiff claims title to the note in question is illegal and void, be sustained. It was held, in Haxton v. Bishop, (3 Wend. 13,) that an assignment by a moneyed corporation to a trustee, for the benefit of creditors generally, was not within the prohibition contained in the 6th section of the act to prevent fraudulent bankruptcies. That section is incorporated into the revised statutes, and is the 4th section of the title containing special provisions relating to corporations. (1 R. S. 603.) But, without reference to the character of the assignment, this 4th section of the 4th title of the chapter of the revised statutes relating to corporations, has no application whatever to an insurance company organized under the act of 1849. Such a company is a moneyed corporation, (1 R. S. 598, § 51.) Being a moneyed corporation, it is subject to the provisions of the second title of the chapter of the revised statutes relating to corporations ; and it is declared by the 11th section of the 4th title, that the provisions of. that title shall not apply to any moneyed corporation which shall be created after the first of January, 1828, and which should be
11 The only other question which I deem it worth while to notice relates to the condition upon which the note is made payable. • The defendant agreed to pay the company, or its treasurer, ten thousand dollars, “ in such portions and at such time or times as the directors may, agreeably to their charter and by-laws, require.” The note was received as a part of the capital stock of the company. The statute declares that such notes shall be valid and negotiable and collectible, for the purpose of paying losses, or otherwise. Thus the note is made transferable, and may be collected for the purpose of paying the liabilities of the company. It is payable at such time as the directors may require. Those directors adopted a resolution under which all the assets of the company, including this note, were transferred to the plaintiff, in trust that he should collect them and apply the proceeds to the payment of the debts of the company. Such a resolution must, I think, be regarded as a requirement that the note should be paid. It is a substantial compliance with the condition upon which the note was made payable. The note could only be collected for the purpose of paying debts. It was made negotiable for that purpose. It was payable when the directors should declare that payment was needed for the purpose of discharging the liabilities of the company. By the res
Harris, Justice.]
That section is as follows: “ No such conveyance, assignment, or transfer, nor any payment made, judgment suffered, lien created, or security given, by any such corporation when insolvent, or in contemplation of insolvency, with the intent of giving a preference to any particular creditor, over other creditors of the company, shall be valid in law; and every person receiving, by means of any such conveyance, assignment, &c. any of the effects of the corporation, shall be bound to account therefor to its creditors or stockholders, or their trustees, as the case shall require.”