[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 241
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 242 The action being upon a premium note of the defendant, an assessment was a necessary condition to its maintenance. In February, 1855, and after the company in which the defendant was insured became insolvent, Eames, the then receiver of such company, assessed the note in action to the amount of $64.57 for losses which accrued while the defendant's policy and note were in full force and effect, and the expenses for which the note was chargeable. The collection of this assessment was stayed by injunction in a suit brought against the company and the receiver, and such injunction was not vacated or set aside until June, 1860. On the 23d June, 1860, the plaintiff (who before that time had been appointed receiver in the place of Eames) assessed the defendant's note to its full amount for losses and for expenses and liabilities accrued while the note and policy were in force, and also for expenses and liabilities incurred in executing the plaintiff's trust, as receiver, and which expenses were chargeable upon the note. If either of these assessments were regular and valid, the plaintiff was improperly nonsuited.
The only ground for claiming the assessment made by Eames to be illegal, is that notice thereof was published in two newspapers only, printed in the county of Oneida. I do not think this was such an irregularity as to invalidate the assessment, and constitute a defence to the action. There was no provision in the charter of the Ætna Insurance Company for giving notice of assessments on the premium notes; but *Page 243 one of its by-laws, adopted in 1851, prescribed the mode, viz., "by publication in three newspapers printed in Oneida county three weeks successively, the last publication of which shall not be less than thirty days prior to the time fixed for payment, and in such other newspapers as the directors or the executive committee may deem necessary or expedient." It is not important now to inquire what would have been the effect of omitting to publish the notice in three newspapers printed in such county, of an assessment made by the directors or a receiver of the company, prior to 1853. In 1853, in remodeling the general law for the incorporation of fire insurance companies, the directors of any mutual insurance company were authorized, after ascertaining the loss or damage by fire sustained by any member, or after the rendition of any judgment against the company for loss or damage, "to settle and determine the sums to be paid by the several members thereof as their respective portions of such loss, andpublish the same in such manner as they shall see fit, or as the by-laws shall have prescribed." (Laws of 1853, chap. 466, § 13.) The statute thus left the manner of the publication of notice of the assessment to the discretion of the directors. They might pursue the mode prescribed by the by-laws of the company, or any other mode of publication deemed advisable and proper. Another provision of the statute would seem to strengthen this construction. Assessments are to be paid within thirty days next after publication of the notice; but a neglect or refusal to do so within such time, would not put the assessed member in default, so that an action could be sustained against him by the directors. Before he is in default, and a right of action upon his note is given to the directors, he must not only have neglected or refused to pay within the time prescribed, but there must have been a personal demand for payment of the assessment made upon him. (Laws of 1853, chap. 466, § 13.) The only object of the publication is to notify the members of the assessment and the amount they are required to pay, and afford them an opportunity to make payment. All this is effected by the personal demand for payment *Page 244 required to be made, and hence no injustice could be done by lodging with the directors a discretion as to the manner of publication. It is enough, however, for the purposes of this case, that since the statute of 1853, the directors of a mutual insurance company are not required to publish an assessment for losses in such manner as "the by-laws shall have prescribed," unless they choose to do so. Having authority to publish it "as they shall see fit," they may adopt a mode of publication other than that prescribed by the by-laws, without invalidating the assessment. It may be conceded that it is a prerequisite to a recovery upon a premium note, that there should be a publication of the assessment. But the statute has not restricted the mode of publication, but left it optional with the directors to pursue that prescribed by the by-laws of the company, or such other "as they shall see fit."
The receiver of an insolvent mutual insurance company is clothed with all the powers possessed by the directors for making and collecting assessments. (Laws of 1852, chap. 71, § 2.) The referee has found that the receiver, Eames, in this case, published the notice of the assessment made by him in but two papers printed in the county of Oneida. The by-laws of the company provided that the publication should be in three papers. Eames was, no more than the directors would have been, at the time the assessment was made, restricted to the manner of publication prescribed by such by-laws. It is conceded that he published the assessment in two newspapers printed in the county of Oneida, and it was proved and found as a fact by the referee, that the defendant was personally notified of it, before the action was brought. Having a discretionary power or authority as to the manner of publication, the assessment was not invalid, nor was there a failure to put the defendant in default for not paying, for the reason that the latter was not notified of the assessment through the medium of three instead of two newspapers printed in the county of Oneida.
The assessment of the plaintiff, Sands, was not objectionable for the reason assigned by the referee. An assessment in *Page 245 form need not specify the name of the party bound to contribute, nor the amount of the note. A general assessment is good by which a receiver declares that each premium note is assessed to the full amount thereof. There is no indefiniteness or uncertainty about it, and the maker of each note is distinctly informed of the sum he is required to pay thereon. It was no objection to the assessment, in this case, that the premium notes in all classes and of all dates were assessed. All the assets of the company that came to the hands of the plaintiff as receiver, were the capital stock notes, amounting to about $100,000, and premium notes of all classes and dates to the amount of $67,000, and these assets were insufficient to pay the losses and expenses due from the company. The company had divided its applications for insurance into two classes, one of which was known as the hazardous department, and the premium note of the defendant was in that department. The amount of losses in the hazardous department, due and unpaid, which accrued during the year the defendant's note and policy were in force, was more than could be collected on the notes of that department which were in force and were liable for the losses and expenses of that year. In addition, the ascertained losses and expenses of the company were more than the stock and premium notes of all classes and dates would pay. When it appears to a receiver, from the liabilities of the company and the times the liabilities occurred, and from an examination of all the classes and notes of the company, that there is no note that is not chargeable to its entire amount for liabilities which justly attached during the existence of the policy accompanying such note, a general assessment upon all the notes, without regard to classes, and to their full amount, is unobjectionable. All the notes of the company constitute its capital, whether they be in one department or another, and if the necessity exists, resort must be had to the entire fund. An assessment to-day, of one class, to pay all the losses of that class, and an assessment to the residue of the same class at a future day to pay the losses of another class, the assets of which are exhausted, would be idle and attended with unnecessary *Page 246 expense and delay, when the same could all be effected by one assessment. The defendant was liable to be assessed for losses occuring in both classes of this company during the existence of this policy. If it required an assessment to the full amount of his note to pay such losses, the receiver could make it. It is true, that as his note was in the hazardous department, and his policy ran but for one year, he was first liable to contribute for losses in that department, but if these losses did not exhaust his note, what was left was applicable to payment of losses in the other department accruing during the year that his policy ran. And this was the precise condition of all the other premium note makers. The defendant, however, in this case, cannot complain that the assessment was of the full amount of his note. It was proved, and the fact was distinctly found by the referee, that the ascertained losses accruing during the year that the defendant's policy was in force, were more than could be collected on the notes of the hazardous department which were in force and liable for the losses of that year. The receiver was consequently justified in assessing the defendant's note to the full amount, and it was not for him to object that the notes in other classes and of other dates than his own were assessed.
I am of the opinion that both assessments were valid, and that the plaintiff was improperly nonsuited.
The judgment of the Supreme Court should be reversed, and a new trial ordered.
BALCOM, J., referred and adhered to his dissenting opinion in the court below, in which he held that the publication by the first receiver, Eames, was sufficient, on grounds similar to those stated by WRIGHT, J., and also because the direction in the act of 1852, in respect to a publication by a receiver of notice of assessment, was that it should be in the manner prescribed by the charter of the company. The charter, in this case, was silent on the subject. The act of 1854 authorized the directors to publish the notice "in such manner as they shall see fit, or as the by-laws shall have prescribed." He *Page 247 thought that Eames stood in place of the directors, and that, although the by-laws prescribed the mode of publication, it was in the discretion of the directors, or of the receiver, to adopt another mode. Upon this point, DAVIES and ROSEKRANS, Js., agreed with him, and the three concurred otherwise in the opinion of WRIGHT, J., except that ROSEKRANS, J., attributed no effect to the requisition of personal demand for payment in respect to the construction of the law as to the publication of the notice. All the judges concurred as to the validity of the assessment by the second receiver, Sands, upon the grounds stated in the preceding and following opinions.