
    The Rockland and Hardenburgh Town Fire Insurance Company, Respondent, v. Jerry S. Bussey, Appellant.
    
      Town co-operative insurance — irregularity in the incorporation of a de facto company is not a defense to assessments by it — they may be levied to pay an indebtedness.
    
    A person who applies for and obtains a policy of insurance issued by a defacto town co-operative insurance company cannot, in an action brought by the corporation to recover an assessment levied upon him, question the regularity of its incorporation where it appears that he paid all the prior assessments levied upon him.
    Where such a corporation elects, as it may lawfully do, to levy assessments from time to time as losses occur, it may include in an assessment moneys borrowed to make good a deficiency in a prior assessment arising from its failure to collect assessments from policyholders.
    Appeal by the defendant, Jerry S. Bussey, from a judgment of the County Court of Sullivan county in favor of the plaintiff, entered in the office of the clerk of the county of Sullivan on the 9tli day of October, 1899, reversing a judgment of a justice of the peace in favor of the defendant, entered upon the verdict of a jury.
    
      J. M. Maybee, for the appellant.
    
      C. L. Andrus, for the respondent.
   Herrick, J.:

The defendant made his application to the plaintiff for a policy of ■insurance; he received a policy from ithe paid his assessments from that time forward down to the one now in question, thereby becoming a member of what was at least a defacto corporation, and he cánnot now raise any question as to the regularity of its incorporation. (White v. Ross, 4 Abb. Ct. App. Dec. 589; Whitford v. Laidler, 94 N. Y. 145, 151; Commercial Bank of Keokuk v. Pfeiffer, 108 id. 242; U. S. V. Co. v. Schlegel, 143 id. 537, 543.)

' The contention of the defendant, that he' has not had a policy with the' plaintiff, I do not think can be sustained. He made his application for a policy ; it was delivered to him; he thereafter made objection to it that it did not include all the property that he desired to have insured; it was returned by him to the secretary of the company, by whom it was changed, and one of the directors swears that he redelivered it as so changed to the defendant; the defendant denies this, but he continued thereafter to pay the assessments made against him as one of the policyholders of the company. Under such circumstances it seems to me that there can be no question but that if he had sustained a loss he could have recovered-from the company, and, tested by that, I think lie also is subject" to the obligations as a member of the company.

The assessment, for the collection of which this action is brought, is made up from the defendant’s pro rata share of the loss from two fires, of money borrrowed by the company, amounting to the sum of $143.93, and expenses aggregating $91.13; and it is argued before us that in the item of expenses is included the amount of unpaid assessments levied to .pay former losses, which, it is contended by the appellant, it has - no right to collect from the members, and that, therefore, he should not be assessed his pro rata share of such amount.

The plaintiff' is a town co-operative insurance company, incorporated under article 9 of the Insurance Law (Laws of 1892, chap. 690).

It is obvious from reading sections 267 and 268 of that act that the policies issued are intended to afford complete indemnity for all losses incurred to the extent of the amount set forth in such policies, and it must be apparent that complete indemnity will not be-afforded if the iusurej only receives the amount of assessments paid in upon any loss, unless a general assessment is made to meet the estimated loss or damages and expenses for the entire year, pursuant to section 268.

The plaintiff, it appears, did not deem it wise to avail itself of this provision of the statute, but made assessments from time to time as losses occurred, as it might lawfully do, and I think it is entirely within its province, when the amount collected from any such assessments fails to meet the requirements of the company, to make up such, deficiency by a subsequent assessment therefor upon its members.

It will be observed that, under section 268, such corporation has the right to borrow money for the purpose of making good any loss sustained, and under the law the only way it has of meeting its obligations and expenses is by an assessment upon its members, and such assessments the defendant agreed to pay' when 'he became a member of the corporation by applying for and taking out a policy of insurance thereupon. And the items for borrowed money and expenses, assuming that such expenses included the necessary money to make good the failure to collect assessments from policyholders for former losses, are properly included in the assessments against the defendant.

The judgment appealed from should, therefore, be affirmed, with costs.

All concurred.

Judgment affirmed, with costs.  