The defense to this action, most insisted upon on the part of the defendant, rests upon two grounds. 1. That the note was given for an insurance policy which was executed and issued without any authority of Jaw, and is therefore void, and the note without consideration. 2. That there is nothing in the complaint, or the evidence, to show that any thing was due, and payable, upon the note, when the action was commenced.
1. The note is dated on the 3d of May, 1850, and shows upon its face, that it was given for value received, in policy of insurance Bo. 558, issued by the company of which the plaintiff is the receiver, bearing the same date;
This company was organized under the act of 1849. (Bess. Laws of 1849, ch. 308, p, 441.) The fifth section of the act provides that mfttual insurance companies shall not commence business, until agreements have been entered into, for insurance, the premiums on which shall amount to one hundred- thousand dollars, and the notes received therefor. By section 11, the authority of the company to commence business, and issue policies, is declared to be, the certificates of the comptroller and secretary of state, required by that section, filed in the office of the clerk of the county in which the company is located. The certificate of the comptroller or the persons appointed by him, must show that the company has received, and is in actual possession of, the premium notes to the amount of 1100,000.
It appears that these certificates of the comptroller and secretary of state, were not filed until the 18th of June subsequent *117to the date of the note and policy. But while the authority of the company to commence business, and issue policies, is made to depend upon the making and filing of these certificates, it is apparent that the act contemplates that the corporation shall enter into contracts, before the certificates are made or filed, and by necessary implication, authorizes the making of such contracts. This is necessarily so, as one of the certificates must show that contracts to the requisite amount have actually been made. These contracts would of course become of no avail, if the organization was not subsequently completed, by the making and filing of the certificates. They are to be regarded in the nature of preliminary engagements, to become valid upon the complete organization of the company, according to the requirements of the statute.
The difficulty on this point, however, grows out of the fact that the note in question is not such a note as is required by section 5. Those notes are expressly required to be payable at the end of, or within, twelve months from their date. They are to be considered a part of the capital stock of the company, and are to be negotiable, and collectable for the purpose of paying losses. This clearly is not such a note. It is not payable at the end o£ or within, twelve months from its date, and is not negotiable. It is payable to the company, or its treasurer for the time being, and in such portions, and at such times, as the directors of said company may, agreeably to their charter and by-laws, require. The charter is thus made a part of the undertaking. By referring to the charter, section 15, it will be seen that members depositing their notes were only bound to contribute towards the payment of losses and necessary expenses, after the application of all other funds provided for that purpose, and in proportion to the amount of their notes. And by section 16, the directors, after ascertaining losses sustained, or after judgment for any loss or damage, are required to settle and determine the sums to be paid by the several persons liable to contribute towards the payment, as their proportion, and to publish notice thereof. Every member so assessed, has thirty days after publication of the *118notice, in which to make payment of the amount assessed, as =his proportion, before an action can be maintained for its recovery. It will thus be seen that the note in question is in no respect like those prescribed by section 5 of the act of 1849. The charter was not, I apprehend, designed to regulate the class of notes taken preliminarily, under section 5, but such notes only as should be taken, after the organization should become complete, and the charter of force as a law, or rule of action.
It is to be presumed, I think, from the certificates of the comptroller, and the persons appointed by him to make the examination, that the company had at that time at least §100,000 in notes of the description and character required by section 5. But this could not have been one of them. From the allegations in the complaint, and the evidence afforded by the note, which is the only evidence upon the subject, it appears that the • company received the defendant’s application, a,nd the note in question, on the 3d of May, 1850, and issued the policy on the same day. The note acknowledges the receipt of the policy. This was a month and a half before the company was authorized to commence business and issue policies, under their charter, or to enter into any engagement except upon receiving notes of the character prescribed by section 5. The transaction was, therefore, without any authority whatever, at the time, and I do not see how the subsequent perfection of the organization could render it valid. It could relate back to such transactions only as were authorized to be done preliminarily, and render them valid. It could not operate to legalize a void transaction. Corporations have no powers, except such as are conferred in express terms, or by necessary implication, by their charter.
It seems to me, therefore, that this policy, issued at that time, upon the note in question, was without any authority to uphold it, and that consequently it is void, and the note without consideration. This objection was distinctly taken by the defendant’s counsel upon the trial, in his motion for a nonsuit.
2. Conceding, however, for the purposes of this action, that *119the policy was regularly issued, and the note a valid subsisting obligation, is there any sufficient evidence that it was due, or any portion of it, when the action was commenced ? It is insisted on behalf of the plaintiff, that the note must be deemed and taken to be due, because the statute required notes taken, at the time this was given, to be made payable at the end of, or within twelve months fi$m, their date. But this does not follow. We must look at the note, and the charter, in order to determine when it was payable. It may be that it was taken contrary to the statute. The statute could not operate to make it due and payable within a year, if by the terms of the agreement, it was payable at a different time. Nor will it render a transaction valid, which has been entered into contrary to its provisions.
We have already seen, by referring to the terms of the note, and the charter, that the defendant, so far from being liable to pay unconditionally the whole amount, or to pay at any specified time, was under no obligation to pay at all, until after all other funds provided for the payment of losses and expenses had been applied; nor until the expiration of thirty days after his proportion of an ascertained loss, or of a judgment, had been determined by the directors and notice of such proportion published. And then the amount assessed, only, could be collected. It is clear, therefore, that as between the defendant and the corporation, nothing was due, and no action could have been maintained upon the note without showing at least an assessment, and the publication of a notice thereof. The creditors, as to their right of action against the corporation, stand upon a different footing. . Their right of action does not depend at all upon any assessment or notice, but upon a loss, and non-payment according to the terms of the policy. And it remains to be seen whether a receiver of such a company, who represents both the corporation and its creditors, can maintain an action upon a premium note, against the maker, when the company could not, had no receiver been appointed. In other words, without any determination of the amount to be paid, and notice of such determination, or assessment, published. It is true that the note, although given and payable to the company, is given for the *120benefit of the insured, who may sustain losses, and whose right of action as respects the company, does not depend upon any of the conditions of the premium note, and that the receiver sues and recovers, primarily, for the benefit of the creditors. But the action is upon the promise, and must be maintained upon it, or it cannot be maintained at all. Although the promise is for the benefit of persons insured, sustaining losses, there is no obligation to pay generally the face of the note, but so much only as shall be necessary to satisfy such losses, after the proportion had been ascertained. And I do not see how the insolvency of the company, and the appointment of a receiver, can change such a promise into an absolute unconditional promise to pay the entire sum mentioned in the note. At the time of the insolvency of the company, and the appointment of the receiver, the makers of these premium notes were debtors of the company in uncertain amounts, whose debts were not yet due, and would not become due until the amount should be ascertained and determined, and notice given. The appointment of a receiver could not operate to change the nature or terms of these agreements. Courts have no power, any more than legislatures, to change and impair the essential obligations of a valid contract, and to convert a limited and conditional obligation into an unconditional one. And no such rule as that contended- for on behalf of the plaintiff is necessary for the protection of the rights of the cred-. itors. No danger is to be apprehended, of any failure of justice. The statute (iSess. L. of 1852, p. 67) expressly confers upon receivers of such corporations, under the authority and sanction of the court appointing them, the same power to make assessments, upon premium notes, which the directors had, and to give notices in the same manner. And they are given the same rights and remedies, upon the non-payment of the assessments, that are given to the directors or to the corporation, by the charter. Tho appointment therefore clothed the plaintiff with the necessary power to determine the amount of the defendant’s indebtedness, and the time of payment; but the apportionment did not determine either. The provisions of the revised statutes, (2 R. S. 469, § 69,) making it the duty of a receiver to proceed immediately *121to recover any sum remaining due, upon any share of stock sub*scribed in the corporation, was not intended to confer, and could not confer, a right of action, until the payment had become due by the terms of the subscription.
[Monroe General Term, September 7, 1857.The same answer may be given to the order made at the special term, ordering and directing the plaintiff to proceed and collect the unpaid balances on the premium notes. That order could not'change the time of payment, or the conditions upon which, by the contract itself, payment was made to depend. In either case it is made his duty to proceed by action, as soon as a right of action accrues. If the obligation to pay is made by the terms of the subscription or promise, to depend upon an assessment, and notice, which he has power to make and give, it is his duty to proceed forthwith and make such assessment and give the notice. The promise cannot be enforced, by action, until some breach is established against the promissor, by the evidence, whether the action be by the directors, or an assignee, or a receiver. The mere failure of the corporation to pay, according to the terms of the policy, and even becoming insolvent, is no sufficient evidence of any breach on the part of the promissor. Indebtedness by the corporation is an essential prerequisite to any liability, but the immediate obligation of the maker to pay, depends upon other and further conditions. Conceding these notes to constitute the capital stock, or to be in the nature of subscriptions to capital stock, it does not follow that they can be collected until they become due and payable. Assessment and notice are essential conditions, as respects both the amount to be paid, and the time of payment; and until these are shown, no breach on the part of the maker is established. (Devendorf v. Beardsley, 23 Barb. 656. Bangs v. McIntosh, Id. 591. Thomas v. Whallen, Gen. Term. 8th district.) As there was no allegation or proof upon this subject, the nonsuit was properly granted, and a new trial must be denied.
Johnson, Welles and T. R. Strong, Justices.]