Farmers' Bank of Saratoga Co. v. Maxwell

The note was given on the day of its date, November 30, 1853, to the insurance company, in consideration of a policy of insurance that day issued. The note is not conditional in its terms, but is payable, absolutely, on a day certain and at a fixed place. It is an ordinary promissory note, and, so far as appears on its face, it may have been given to the company as well for money loaned as for a policy *Page 582 issued. On the 31st day of December following this note was discounted by the plaintiff for the insurance company, in the usual and ordinary course of business, and the money proceeds of the note placed to the credit of the company, which had a regular account with the plaintiff. I do not think there is any pretense for saying that this note was what is technically called a premium note. It is a note given for a premium, it is true, and this is all that is claimed in the defendant's answer. But it is a note absolute in its terms. The company, by its charter, could issue policies on the system of incorporated cash capital companies, as well as on the mutual plan. Its charter provided for issuing policies upon the cash system. For the money to be thus paid, a promissory note on time could certainly be taken. It could not be what is called an investment of the funds of the company under the 8th section of the law of 1849. The 21st section of the act of 1849 authorized this company to unite a cash capital to any extent, as an additional security, and that section, I think, warranted the provision in the charter of the insurance company to whom this note was given. There certainly is nothing in the general insurance laws of 1849, or any other act, which prevents a mutual insurance company taking a note from one of its members, for the absolute and unqualified payment of the amount of his premium of insurance, if the insured is willing to give it in that way. This defendant has said by his note, that he was willing to pay and would pay in any event, and without regard to the fact whether or not the company had sustained losses. When the company held such a note I am unable to see why they could not transfer it, and apply the proceeds to the payments of debts or to meet any of the wants or necessities of the company, or to put their funds in better shape for investment. It was but an ordinary negotiable promissory note. On the trial the defendant offered to show that in March, 1854, the secretary of the insurance company agreed with him that the note and policy should be canceled upon the payment of the premium then earned, and which portion of such premium earned was to be applied upon a loss of the defendant which had been *Page 583 adjusted by the company, and that in pursuance thereof the policy was canceled and the note was to have been returned. This evidence was excluded. The note had been discounted by the plaintiff several months before this alleged settlement took place, and the plaintiff could not be affected by it unless a party to the arrangement. I am of opinion that the complaint should not have been dismissed, but on the facts proved the plaintiff was entitled to judgment, and that the judgment of the Supreme Court should be reversed, and a new trial ordered, with costs to abide the event. SAME v. ANSON D. ELLIS. The judge in this case, in addition to the findings inMaxwell's Case, found the note had been paid by the defendant and canceled by the insurance company before the transfer thereof to the plaintiff. The answer sets up that the insurance company was indebted to the firm of which he was a member, for losses on the 13th of April, 1854, and that the defendant and the company on that day settled and adjusted the note in controversy, and the company agreed to surrender it to defendant. The offer, which was excluded, was to show this settlement in March, 1854. On the trial the defendant read the evidence of James Noxon, the plaintiff's cashier, taken under a stipulation, proving by Noxon's testimony that the note was discounted by the plaintiff on the 31st December, 1853, three months before the alleged settlement. The note in this case was an ordinary negotiable promissory note, payable at a fixed time and place, and in all respects like the note of Maxwell, and made payable to the order of the secretary, and was given for the premium for insurance on defendant's vessel or propeller. This judgment should also be reversed. THE SAME v. SAMUEL L. WATSON. The facts are substantially the same as in Ellis' Case. The draft was drawn and accepted after the note had been discounted by plaintiff. *Page 584