
    Sands, Receiver, v. Boutwell.
    A mutual insurance company, organized under the general law (ch. 308 of 1849), may divide its business and risks into distinct departments, or classes, pledging the premiums received in each department as the primary, fund for the payment of losses in that department.
    Whether a provision is valid which exempts premium notes received in one department from liability to assessment for losses incurred in another department, gMcere.
    The receiver of an insolvent corporation organized under this act may include in his assessment a reasonable sum for the expenses of making and collecting the same. In the absence of any proof to the contrary, ten per cent upon the amount of losses assumed to be a reasonable charge for such expenses.
    Where the by-laws required the notice of assessment to be published in one newspaper in the county of M., “ and in such other newspapers as the directors may deem necessary,” it seems that a publication in one newspaper in M. county is sufficient, unless a direction for further publication by the directors be shown.
    Appeal from the Supreme Court. Action upon a promissory note in the words following:
    “ [The Secretary may number and date this note.] $1,200. For value received, in Policy No. 61, dated November sixth, 1851, issued by the Columbian Insurance Company, I promise to pay the said company, or their agent for the time being, the sum of twelve hundred 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.
    “ Oliver Boutwell.”
    The referee, before whom the cause was tried, found these facts: The company was a corporation located at Amsterdam, in the county of Montgomery, duly organized, according to the general act for the incorporation of insurance companies, passed April 10, 1849, and transacted such business at that place from June 13th, 1851, the date of its organization, until on or about the first day of August, 1862. The business of the company, in pursuance of its charter and by-laws, was divided into two departments, called The Farmers’ Department, and The Merchants’ Department; and it was provided in the charter that the premium notes received on applications should not be assessed for the payment "of any losses, except in the class to which they belonged. The by-laws declared: That the premium notes received upon risks approved in the Merchants’ Department should be liable to assessments for all losses and expenses occurring in and belonging to said department, and none other; and that the premium notes received upon risks approved in the Farmers’ Department should be liable to assessments for all losses and expenses occurring in and belonging to said department, and none other. The company was duly and legally dissolved, and upon such dissolution one Alexander Sheldon was duly appointed receiver, and subsequently the plaintiff was appointed receiver. The note was made on the 6th day of November, 1851, and was given on an application for an insurance in the Merchants’ Department; and in consideration thereof the company issued and delivered to the defendant a policy of insurance upon property, in the Merchants’ Department. The 'receiver ascertained the amount and extent of the losses and other unpaid liabilities of said company in the Merchants’ Department, and determined the respective portions of such losses and liabilities which each member of the company was liable to pay, and settled and determined that the defendant was liable to pay on his note the sum of $625.06, and assessed the defendant in that sum, and required payment thereof to him; and notice of such assessment, and of the time for the payment thereof was given by the receiver, by publication in a newspaper in Montgomery county for three weeks successively, the last publication being not less than thirty days prior to the time fixed for the payment. The 16th by-law of the company required that notice of all assessments should be given by the secretary, by publication in one newspaper published in Montgomery county, three weeks successively, “ and in such other newspapers as the directors or executive committee may deem necessary.” The referee found for the plaintiff the full amount of the note and interest, upon which judgment was entered for him, which was affirmed at general term. The defendant appealed to this court.
    
      Kellogg & Merritt, for the appellant.
    
      Henry R. Mygatt, for the respondent.
   Davies, J.

Three points are made by the counsel for the appellant in support of the appeal:

First. That the company had no right to divide their business into two departments, or the receiver to assess the notes of one department only, although the assessment be for losses occurring upon risks taken in that department to which they belong. This point is disposed of by the decision of this court in the case of White, Receiver, v. Giles Ross and others (decided at September term, 1860), when this court held, that the provisions of the charter of the company, dividing its business into distinct departments, was not in conflict with any provision of the act of April 10, 1849, authorizing the formation of insurance companies; that both classes are to be assessed by the receiver, and that it could not be doubted that all the notes of the company constitute its capital, and that although the notes of one department must first be assessed to pay the losses in that department, yet if they are proved not to be sufficient, and anything remains in the other department beyond paying the claims upon it in that branch, resort must be had to those remaining assets, until the whole are exhausted. The principle is here distinctly enunciated, that the division of the business of the company into distinct departments is legal and unobjectionable; and that the notes belonging to each department are primarily to be assessed, and sufficient collected therefrom to pay the liabilities of the particular department to which they belong; and if not adequate for that purpose, then resort is to be had to the notes of the other department, after sufficient shall have been collected therefrom to liquidate the liabilities of that department, .to meet any. deficiency The whole amount of the defendant’s note being required to discharge the liabilities of the Merchants’ Department, to which it belonged, he was properly called upon to pay it.

Second. It is objected that the addition, by the receiver, of ten per cent to the amount of the assessment made by him for the expenses of the assessment and the collection "thereof, was unauthorized, and rendered the assessment void. The charter of this company is not presented to the court; but it seems to have been assumed that its provisions are like those found in. the charter of the Genesee Mutual Insurance Company, referred to in the case of Bangs v. Gray (2 Kern., 477). In that case,, an assessment, which included ten per cent added thereto,, estimated as the expenses of collecting, &c., received the approval of this court. In the absence of any proof to the contrary, we are to assume that ten per cent was a reasonable and proper sum for the expenses of making the assessment and collecting the same. Assuming, therefore, that the assessment was made for the exact sum necessary to discharge the liabilities of the company, it would follow, if the receiver had no power to add thereto an amount sufficient to cover the expenses of making the assessment and collecting it, that such expenses would necessarily be deducted from the amount due to the policy holders. The result would be that the insured would have cast on them the burden of these expenses, and not the insurer. Such a result is contrary to the spirit and intent of the act creating these companies, and hostile to the principle upon which insurances are made. The contract of the insurer with the insured is that of complete indemnity- and whatever expenses or burdens, are incurred to carry into effect this contract should be borne by the party who has obligated himself to make the indemnity, not he who is to receive it. These views are in harmony with those expressed by this court in Bangs v. Gray (supra), and by the Supreme Court of Massachusetts in Jones v. Sisson (6 Gray, 296).

There remains to be considered the third objection, taken by the appellant, in opposition to the recovery in this action. He claims that the assessment made by the receiver was void, for the reason that the 16th by-law of the company required that whenever an assessment should be made by the company, “that notice of the assessment should be given by the Secretary, by publication in one newspaper published in Montgomery county, three weeks successively,' and in such other newspapers as the directors or executive committee may deem necessary,” and that notice of this assessment was not thus given. It is a sufficient answer to this objection to say, that the referee has found no fact which would authorize this court to assume that there was such a by-law of the company. The referee has found that the plaintiff has proven all the material allegations contained in the second cause of action stated in his complaint. In reference to this point the averment in the complaint was, that the receiver had made the assessment, and required the same to be paid to him, on or before the fourth day of July, 1853, “ and notice of such assessment, and of the time for the payment thereof, as required by the by-laws of said company, was duly given by said Sheldon, as such receiver, by publication in the Amsterdam Intelligencer, a newspaper published in the county of Montgomery, for three weeks successively, the last publication whereof, was not less than thirty days prior to the time fixed for the payment.” This finding, therefore, establishes the fact that notice of the assessment was duly given by the receiver, as required by the by-laws of the company, and we are not at liberty to hear suggestions, in opposition to this finding, that the notice was not given in accordance with the by-laws of the company. The by-laws are not set out in the case; but assuming them to be as stated by the appellant’s counsel, in their printed brief, we do not see that they afford any evidence that the referee has found incorrectly upon this point, or that by any proper construction, this by-law should be deemed as controlling the action of the receiver, an officer of the Supreme' Court, and who must necessarily act under its direction. The by-law in its terms, only seeks to govern and direct the action of the company and its officers when the assessment is made by them. It applies in terms only to an assessment made by the company, and as to such an assessment, directs how notice thereof is to be given by its secretary. In the absence of any direction by the directors or the executive committee, the notice is- to be published in one newspaper in Montgomery county. If the directors or said committee should deem it necessary to publish the notice in other newspapers, then it was- to be the duty of the secretary to publish it in such other newspapers as directed. In the absence of such direction, manifestly it would not have been the duty, even of the secretary, to publish it in more than one newspaper. Supposing, as the argument of the appellant’s counsel assumes, that the receiver is the representative of the directors in mating this assessment, and is bound to conform to the by-laws of the company in reference to it, then it would follow that he has the same discretion, as to its publication, that the directors had; and if he did not deem it necessary to publish it in more than one' newspaper, such publication would be no infraction of the by-law.

In any aspect in which this objection may be regarded, it cannot be sustained. The judgment appealed from must be affirmed, with costs.

Rosekrans and Marvir, Js., dissented.

Judgment affirmed. 
      
       The expression of an opinion that the notes received in one department may be ultimately liable for assessment to meet the deficiencies in another department, notwithstanding a by-law to the contrary, was, according to the Reporter’s understanding, a mere obiter dictum in the case of White v. Ross, as it seems to be in this case.
     