Opinion
April Term, 1850
W. Kent, for appellant.
S. Beardsley, for respondents.
The note in question was a valid security in the hands of the insurance company, the original holders, and could have been enforced by them against the defendant. ( Deraismes v. The Merch. Mutual Ins. Company, 1 Comst. 371.)
Was it duly transferred by the insurance company to the plaintiffs? is the question in the present case. The 12th section of the act under which this company was incorporated provides "that the company, for the better security of its dealers, may receive notes for premiums in advance, of persons intending to receive its policies, and may negotiate the same for the purpose of paying claims or otherwise, in the course of its business." ( Sess. Laws 1843, p. 71.) These powers were essential to the existence of incorporations of this sort. It was anticipated that their capital would consist chiefly of notes, received for premiums, and that unless they were rendered available, the corporations would be compelled to suspend operations, upon the first serious loss that occurred. They were therefore authorized to negotiate their premium notes, for the purpose of paying claims, or otherwise, in the course of their business.
The judge ruled that the testimony established "that this note was transferred to the plaintiffs by the president of the company, for a loss, in the usual way, and in the ordinary course of business; according to their custom to pay in notes." As there was evidence tending to prove these facts, the finding of the judge is conclusive, and the negotiation of this note is accordingly brought within the very letter of the 12th section.
But if the facts had been otherwise, I apprehend that the company were not restricted by the statute, to a negotiation for the purpose of payment, exclusively. They might procure the note to be discounted, and apply the avails, in discharge of their responsibility for losses incurred; or if this could not be done, the same result might be obtained by a transfer of the notes to the plaintiff, upon the indorsement of the company, the creditor giving time until the securities matured. In a word, any bona fide settlement of a presumed loss, contingent or absolute, made with the dealers of the company, in the usual course of business, was, I think, authorized by the comprehensive language of the statute.
It is however objected, that the assignment of the president was not obligatory upon the company. Their corporate powers were to be exercised according to their charter, by a board of trustees and such other agents as they might appoint. The president was such agent. This is manifest not only from the general usage of the company, but from their by-laws, which empower "the president, vice president, or either of them, to make contracts for the corporation, to transact all its ordinary business, and to perform whatever belongs to the executive department. (1 st By-law.) The negotiation of notes in the usual course of business was an act of this description; and it is accordingly found as a fact, that "the plaintiff dealt with the president as the authorized agent of the company, in the usual way, and without notice."
The 8th section of the article to prevent the insolvency of moneyed incorporations, it is said, prohibits this transfer, as it was not authorized by a previous resolution of the board of directors. (1 R.S. 591, § 8.) To this objection there are two answers. First. If the 8th section conflicts with the charter of this company, the former must yield to the latter, as the last expression of the legislative will. Second. There is evidence to show that the policy was surrendered by the plaintiffs at the time of the adjustment of the loss, and in consideration of the assignment of the securities in question. As the judge reports the facts, "the plaintiffs were in possession of the notes honestly and fairly, for a good claim, without notice of any want of authority in the president to make the transfer." Assuming these facts to be true, the plaintiffs were bona fide holders of the note for a valuable consideration, without notice, and consequently not within the exception established by the section of the revised statutes above mentioned. The provision is, that the section shall not be so construed as to render void any assignment or transfer, in the hands of a purchaser for a valuable consideration and without notice. The judgment of the superior court must be affirmed.
Judgment affirmed.