Union Insurance v. Greenleaf

Appleton, C. J. The defendant is sued as the maker of a promissory note payable to the order of the National Insurance Company and indorsed “National Ins. Company by Hiram Ruggles, president.” By the tenth by-law of the National Insurance Company it is provided that “the promissory notes given by the company, and indorsements or assignments of the notes or securities of the company shall be made by the president.” By the eighth by-law he has “full power to settle and adjust all losses and return premiums and other claims of the company, as he shall deem to be just and expedient for the company ; to refer compromise or contest in law any demand which he may think it improper to allow.” The indorsement was to 'pay a pre-existing debt which was thereby extinguished gpro tanto. The National Insurance Company have had the benefit of it by a discharge of indebtedness. It does not appear that they have made any objections to this act of their president. The transfer was to adjust or settle an indebtedness which is not denied, and as this settlement has never been impeachel, we think, notwithstanding the clause [127] in the same article, which authorizes him to assign or indorse notes when authorized by the directors, that having transferred the note in part payment of a debt due, and having general authority to settle adjust and compromise claims against the company, that the plaintiffs have at any rate made out a prima facAe case, and are to be regarded as indorsees. Cabot v. Given, 45 Maine, 144; Baker v. Cotter, 45 Maine, 236; Brown v. Donnell, 49 Maine, 421. The note reads as follows: “Boston, Oct. 17, 1872. $326. Twelve months after date, I promise to pay to the order of the National Insurance Co., of Bangor, for value received, three hundred and twenty-six dollars, payable in Boston. No. 2207. Arnold G-eeeni.eab'.” The following memorandum is printed across the face of the note in red ink: “This note must be paid at maturity without regard to the termination of the risk.” The note was negotiable. In Taylor v. Curry, 109 Mass., 36, it was held that a promissory note given to an insurance company is not rendered unnegotiable by bearing on its face the words, “on policy No. 33,386 although the policy contains a provision for the set-off of notes due the company, in case of a loss. The note wras indorsed before maturity. The plaintiff company had met with losses. The National Insurance Company had met with losses to less than a third of its capital. But knowledge that a loss has been made by an insurance company is not evidence of the insolvency of the company so losing. "Whether the National Insurance Company transferred notes to the plaintiffs or the plaintiffs to the National Company, there was no more notice of insolvency in the one case than in the other. Either company might for aught that appears have been the indorsee of the other, and that without any impeachment of its good faith. Shortly after the transfer of the note in suit the National Insurance Company suspended its business, an injunction issued against its further proceeding, and receivers were appointed. [128] Upon the fourteenth day of November,. 1872, the policy for the premium on which the note in suit was given was surrendered and cancelled. But this was done after the note had been indorsed to the plaintiffs. The defendant claims that he is within the provision of E. S., c. 49, § 26, which provides that “a policy of insurance issued by a life, fire or marine insurance company domestic or foreign, and a deposit note given therefor shall be deemed one contract; and a loss under such policy or other equitable claims may be proved in defence of a suit upon said note, though it were indorsed or assigned before it was due,’ and when a company becomes insolvent the maker of the note shall only be liable for the equitable proportion thereof which accrued during the solvency of the company, and if the insolvency occurs within sixty days of the date of the note it shall be void except for the amount of the maker’s claim, if any, on the company,” &c. The main question for determination is whether the note in suit is a deposit note within the true meaning of this statute. By § 25 we learn what are to be regarded as deposit notes. They are to be given for a policy and for such sum as the directors may determine. Such part as the by-laws require is to be immediately paid towards incidental expenses, and is to be indorsed thereon. The remainder is payable in such instalments as the directors from'time to time require for the payment of losses and other expenses to be assessed on all who are members when such losses or expenses happen, in proportion to the amount of their notes. It is therefore uncertain what if any part of the deposit may be required to be paid. The same doubt exists as to the time when payment will be demanded. The deposit note as described in § 25 must be the one to which reference is had in § 26. But the note in suit was no such note. It was payable at a definite time. It was to be paid irrespective of the termination of the risk for which it was given. Its payment did not depend upon assessments to be made by directors contingent in amount upon the losses of the company. It was [129] given for the premium instead of making a payment in cash. It matters not whether the premium is paid in money or in a note on time, which is indorsed in good faith before maturity. In either case the insured risks the solvency of the insurer. He who so gives negotiable paper must abide the legal consequences of its negotiation. The meaning of a statute is to be ascertained from its language. Undoubtedly much aid may be had by recurring to preceding legislation on the same subject. When there is a material change of language we must suppose there was a change of legislative intention. Words are to be understood as used in their customary signification, unless from the context a different meaning is apparent. If in a revision there are omissions, it is not for us to say whether those omissions are by accident or design. Still less are we to assume an omission to be accidental and then insert by construction what may have been omitted by design. Here is nothing doubtful or obscure. The note in suit cannot within the meaning of §§ 25 and 26 be regarded as a deposit note. It is no defence to the note that the National Insurance Company has failed, it being in the hands of a bona fide holder. Nor can the cancellation of the policy subsequently to its indorsement lessen or destroy the rights of the holdef. The note was given for a good consideration, was indorsed before its maturity in good faith, and must be paid. Alliance Mutual Insurance Co. v. Swift, 10 Cush., 433; Cobot v. Given, 45 Maine, 144. Defendant defaulted. Cutting, Walton, Baebows and Daneoeth, JJ., concurred. Petebs, J., did not sit in this case.