
    Sands, Receiver, &c., v. Sanders.
    Whether the statute (ch. 369 of 1854), authorizing directors of a mutual insurance company, organized under the general act, to give notice of an assessment “ in such manner as they shall see fit, or as the by-laws shall have prescribed,” vests any discretion in the directors, or in a receiver upon insolvency, where the by-laws prescribe the mode, qucere.
    
    A general assessment, and notice that each premium note of every class is assessed for the full amount thereof, is sufficient where the losses in the class to which the note belonged exceed the amount of all the notes received upon -that class of risks, and the losses of the company exceed what is collectible on all the notes of all classes and dates. It is unnecessary that the assessment should state the particulars of the assets and debts, upon which it is founded.
    Personal notice of the assessment and a demand of payment, less than the statutory time of publication previous to the time of bringing suit, does not aid a defect in such publication.
    Appeal from the Supreme Court. Action on a premium note given by the defendant to the ADtna Insurance Company. The company, of which the plaintiff was receiver, was organized as a mutual insurance company, under the act of 1849, and did business as such from April, 1851, to January, 1854, when it was declared insolvent, and one Edward Eames appointed receiver of its property and effects. On the 8th October, 1851, a policy of insurance was issued to the defendant, by which he was insured in the company for the term of one year from that date, and the defendant gave his note as follows:
    “ $180. For value received in policy No. 1447, dated 8th October, 1851, issued by the JEtna Insurance Company, of Utica, I promise to pay the said company, or their treasurer for the time being, the sum of one hundred and eighty dollars, in such portions and at such time or times as the directors of said company may, agreeably to their charter and by-laws, require. Jacob Sanders, Jr.”
    This was a premium note in the hazardous department of the company, whose policies and business were divided into this and other classes styled farm risks.
    On the 19th February, 1855, Eames, the receiver, assessed the said note of the defendant to the amount of $64.37, for losses which accrued while the defendant’s note arid policy were in full force and effect, and also for expenses for which the said note was chargeable; which assessment was made due and payable on the 17th May, 1855, and duly confirmed by an order of the Supreme Court on the 21st March, 1855. Notice of the assessment was published in two papers only, printed in the county of Oneida. The 12th by-law of the company provided as follows: “§12. The directors may make such
    assessments upon the premium notes as they may think necessary. Notice of such assessments shall be given by the secretary by the 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 their payment; and in such other newspapers as the directors or executive committee- may deem necessary or expedient. The directors or executive committee may also cause such notice to be published in handbills, posted up in such places as they may direct.”
    Eames continued to act as receiver of the company until the 15th May, 1860, when the present plaintiff was duly appointed in his place. On the 23d June, 1860, the plaintiff assessed the note in action for losses, and for expenses and liabilities accrued whilst the defendant’s note and policy were in force, and also for expenses and liabilities incurred in executing the plaintiff’s trust as said receiver, and which expenses were chargeable upon said note. This assessment was duly confirmed by-an order of - the Supreme Court, and was published in three newspapers in Oneida county, for the time required by the by-laws of the company. The time fixed for the payment thereof was the ,22d August, 1860. This, assessment was general, assessing all the notes of all classes and of all dates to their full amount.
    The referee found, as matter of fact, that the amount due for - losses which occurred in the hazardous department, and which were due and not paid, for the time that 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 which accrued during the year that the defendant’s note and policy were in force; that no assets came to the plaintiff’s hands as receiver except the stock and premium notes of the company, which amounted 'to $167,428.96, and that the same were insufficient to pay the losses and expenses due from the company; that before the commencement of this action the defendant was personally notified of the assessment of the receiver Eames, as well as of the assessment of the plaintiff, on the 23d June, 1860, and payment thereof was personally demanded, on behalf of the plaintiff, at the defendant’s residence.
    The referee’s conclusions of law were: First, That the note was not an original capital stock note, but that the same was a premium note, and subject to payment only agreeably to the charter and by-laws. Second, That the assessment of the receiver Eames was invalid, for the reason that the notice thereof was published in but two newspapers in the county of Oneida. Third, That the assessment of the plaintiff, of the 23d June, 1860, was invalid, as the same was general, and thereby all the notes in all classes, and of all dates, were assessed to their full amounts.
    The referee, for the two last reasons, nonsuited the plaintiff, and directed judgment to be entered in favor of the defendant, with costs.
    •On appeal to the Supreme Court, at general term, the judg ■ ment was affirmed, and the plaintiff appealed to this court.
    
      H. R. Mygatt, for the appellant.
    
      H. P. Townsend, for the respondent.
   Wright, J.

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, Barnes, 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, I860. On the 23d June, 1860, the plaintiff (who before that time had been appointed receiver in the place of. Fames) 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 Fames 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 -¿Etna Insurance Company for giving notice of assessments on the premium notes; but 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, and publish 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 arid 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 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. Haying 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, Barnes, 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. Barnes 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 fatit 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 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 notéis 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-dáy, 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 expense and delay, when the same could all he 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 Weight, 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 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 Rosekbaets, Js., agreed with him, and the three concurred otherwise in the .opinion of Weight, J., except that Rosekeans, 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.

Emott, J.

This action is brought by a receiver of the .¿Etna Insurance Company of Utica, alleging two assessments made upon a premium note given by the defendant. One Eames was originally appointed the receiver of the company, and on the 19th day of February, 1855, he made an assessment óf its premium notes. The amount of this assessment upon the defendant’s note was $64.57, and this is one ground of the present suit. The validity of this assessment is disputed on three grounds:

First. It is said that it is not made by any regular rule, and that it is unjust and unequal. This is a question of fact, which is not before us upon this appeal. The referee,' before whom the cause was tried, finds that Eames, as receiver of this company, made this assessment for losses and expenses for which the maker of this note was liable. He held the assessment invalid, on account of an objection arising as matter of law upon the undisputed facts, which will be presently adverted to, and did not consider how far the objection, that the assessment was unequal, was well founded in fact, nor whether such inequality, if it were shown, would constitute a valid • objection in law. It is not our province to examine the evidence and decide the question of fact upon which this question turns, and which has not been passed upon by the court below in any of the stages of this case. Until the question of fact is decided, however, the question of law discussed in the argumeat on this branch of the case does not call for any expression of opinion by this court.

The next objection made to the assessment of the receiver, Eames, is, that it includes the expenses of collection. The finding of the referee upon this point is, that the assessment was for expenses for which the note of the defendant was chargeable. There is nothing more in the case upon the point, and I am unable to see how the objection can avail the defendant in that state of the case. But I know of no reason why the legitimate and proper expenses of its collection should not be included in an assessment. There is no other means of providing for such expenses, which are, nevertheless, unavoidable. I am not aware that the power to include such expenses in assessments has ever been denied by the courts, and in Bangs v. Gray (2 Kern., 477), it was impliedly, if not expressly, sanctioned by this court.

The last objection to this assessment, and that upon which the Supreme Court held it invalid, was, that notice of it was not published in accordance with the by-laws of the company in regard to assessments .by the directors. The receiver of such a corporation is authorized by statute (Laws of 1852, ch. 71, § 2), to make such assessments as, by the charter thereof, the directors are authorized to make; and notice of any such assessment “ may be given in the same manner as is provided in the charter of said company for the directors of said company to give.” The charter of this company contains no special provisions in respect to such notice; but authorizes the directors generally to call for payment of the premium notes at such times as the directors may deem requisite. The legislature, however, in 1853, regulated, by general law, the mode of assessing premium notes by the directors of mutual insurance companies. (Laws of 1853, ch. 466.) This statute, as amended in 1854 (Laws of 1854, ch. 369), prescribes the manner and the extent of assessments by such companies upon their premium notes. Its provisions have been considered by the courts in various cases, and have always been held to be controlling, not only as to the amount of the assessment, but the manner of making it. They are in effect amendments or alterations of the charter or organic law of these companies respectively, and become incorporated in and a part of such •organic law. The power of directors, and, therefore, of a receiver, upon the point now under consideration, is to be measured and determined by any such provisions which may effect it, in the same manner as if they had formed a part of the articles of association or charter of this company. * -This act provides that notice of assessment shall be published in such manner as the directors shall see fit, or as the by-laws shall prescribe. • No action can be brought upon such an assessment "until after the expiration of thirty days from such publication, nor until personal demand has been made for payment. The kEtna Insurance Company had adopted bylaws which, among other things, regulated the publication of notice of assessments. They directed that notice of assessments should be published in three newspapers' printed in Oneida county three weeks successively, the last publication to be thirty days before the time fixed for payment of the assessment. The notice by the receiver, Eames, of his assessment, was published only in two papers, and, therefore, not according to the by-laws of the company. I think such an assessment cannot be sustained. All the requisites of the statute must be complied with before the makers of premium notes can be compelled to pay assessments upon them, and this applies as well to the provisions which relate to the manner, as to those which concern the substance, of the assessment. It is said that the meaning of the statute is, that publication should be made as the by-laws direct, unless the directors order otherwise, and in that case as they see fit; and that the receiver who succeeds them enjoys the same unlimited discretion. This is not, in my judgment, a fair construction. It gives too little force to the by-laws which were thus expressly referred to in the act, which we must suppose were intended by the legislature to be controlling when such by-laws existed and affected the question. The fair import of the act is, that such publication of the assessment must be made as the bylaws direct, if they contain any direction on the subject; or if they do not, then such as the directors see fit.

. The defect in the publication of the assessment made by Barnes is not aided by the personal notice which was proved,for two reasons: First, because a personal demand is required by the statute in addition to the notice by publication; and second, because the publication must be made and completed according to the statute and the notice thereby contemplated, thus giving thirty days before the assessment is payable. If a personal notice were claimed as a substitute for or equivalent to notice by publication, it should have been given thirty days before the time of payment and before suit, as the notice by the publication would have been. The personal notice in this case was a demand of payment, which was made on the same day on which the suit was brought.

I am, therefore, of opinion that the assessment made by Barnes was invalid, and that upon it this action would not lie. But the conclusion at which I have arrived upon the other questions in the case render this opinion of less importance.

After this assessment had been made, Eames was removed from the receivership, and the present plaintiff appointed in his place. On the 23d of June, 1860, the plaintiff made another assessment. This assessment was general, and it re paired payment of and assessed every premium note belonging; to the corporation to the entire amount due and unpaid the reon, declaring that the same was necessary to pay the del ts of the corporation.

1 i appeared on the trial that the policies and business of the JEtna Insurance Company were distributed into classes. In one of these, designated as farm policies, there had been no losses.' In the other divisions, however, described as hazardous risks, the losses had been so large as to require not only the premium notes given for policies of that class, but all the premium notes, and also the stock notes, and the whole assets of the company, to meet them. It is objected to this assessment that it is general, not discriminating between the notes given for these two classes of policies. The answer to this, so far as the defendant is concerned, is, that his policy was issued and his note given upon the insurance of what is known as a hazardous risk. All the notes of that class would be assessed to their full amount, if the assessment had been made by classes, and the notes of this class charged primarily with the losses o.n policies of a similar description. As the losses in this one branch of the business of the company were sufficient to absorb all that could be collected from all its notes, it was certainly not material to the defendant that.the notes given for farm policies should be separately assessed; nor is it necessary to discuss the rule in ordinary cases. The referee finds as facts that the assessment made by the plaintiff was for losses and for expenses and liabilities accrued while the defendant’s note and policy were in force. He also finds that the amount due for losses which accrued in the hazardous department, and which are due and not paid, for the time that the defendant’s note and policy were in force, is more than can be collected on the notes of that department which were in force, and were liable for the losses and expenses which-accrued during the same period. These facts seem to me to dispose of the theoretical objection to the general assessment made by the plaintiff on the ground of the injustice which might result from such an assessment in cases which could be supposed.

The Supreme Court seem also to have held .that the assessment was defective and insufficient, because it did not state the particulars of the assets and debts of the company upon which it was based. I confess that this idea seems to me to be founded upon a misconception of the nature and purpose of what is called an assessment under these laws. The act of the receiver in assessing premium notes is precisely the same as that of the directors in case of losses, which the company has not the ready means to pay, while it is yet solvent. The statutes upon which their action is based (Laws of 1853, ch. 466, § 13; Laws of 1854, ch. 339, § 3) authorize and require the directors, if they find it necessary after ascertaining the amount of a loss sustained by any member of the company, to “ settle and determine the sums to be paid by the several members thereof as their respective portion of such loss, and publish the samethat is, to publish their determination of the sum to be paid by each member. This is what is meant by an assessment, whether made by directors of a company or by the receiver who succeeds to their powers. It is the determination how much each member of the company shall pay to make good a loss or losses sustained by others. Fo particular form is requisite for this; nor is it needful, as was held in Bangs v. Duckenfield (18 N. Y., 598), to specify in the assessment the name of the parties bound to contribute, or the amounts of the notes. It is sufficient that the requisition be certain, or such that the parties called upon have the means of reducing it to certainty. It -is perfectly true that the assessment must be just and equal, after the rule of proportion laid down by the statute, and that there must be such a state of the assets and liabilities of the company as to justify the call. But it is very clear to my mind that the Supreme Court fell into an error in supposing, as they seem to have done, that all this should or could appear by the assessment itself. That is simply the resolution of the directors, or the act of the receiver, fixing the amount of the liability of the members of the company. It is said that the burden of proof to establish the facts requisite to a valid assessment should be thrown on the receiver or party suing under it. The question of the burden of proof in such cases is the-question presented by this objection. It would hardly be conceded by the defendant’s counsel that mere statements or recitals in an assessment, or in the preliminary proceedings to it, would be proof; certainly not that they would be conclusive proof of these vital facts. If such recitals, and statements were contained in the assessment, or in any of the formal proceedings which resulted in it, the question would still remain, whether the plaintiff was bound to sustain these statements by evidence, or whether the defendant was required to attack and impeach them. But here the referee expressly finds the facts which are necessary to sustain the assessment, and the objection only comes to this: that these facts are not set out by the receiver in mating it. I am certainly of opinion that such an objection should not prevail.

The other points taken by the respondent’s counsel have been disposed of by previous decisions of this court.

I, therefore, have reached the result that the assessment made by the present plaintiff is valid and sufficient to sustain this action against the. defendant, and that this judgment should be reversed and a new trial ordered.

Demo, Ch. J., Selden and Marvin, Js., concurred in this opinion, and Rosekrans, J., in so much as relates to the effect of personal notice and demand.

Judgment reversed, and new trial ordered.  