Court Opinion

ID: 5469153
Source: CourtListenerOpinion
Date Created: 2022-01-09 20:20:06.499697+00
Date Added: 2024-06-11T08:33:14.146818
License: Public Domain

By the court—Gould, Justice.
These three bases turn on substantially the same ground of defence; they were argued together, and one opinion can give the decision in all.
It is first desirable to free the cases of a claim on the part of the plaintiff, which seems to make them differ from cases heretofore decided in this court. This'claim is, that'the Insurance *162Company, of which the plaintiff is assignee, was organized un-' der the law of 1849, and not that of 1853 ; and that, therefore, a rule applies to the premium notes, different from the rule laid down in Devendorf agt. Beardsley (23 Barb.), and subsequently in this district, in Devendorf agt. Cornell. And that," by this different rule, all premium notes are (by the law of 1849) a part of the capital of companies organized under that act.
This I deem a mistake. The act of 1849 (Laws of 1849, p. 442, § 5) does not call the notes “ premium notes,” but “ notes received in advance for premiums,” &c.; and such notes, when given under that section, are to be “ considered as part of the capital stock;” and these are negotiable and payable absolutely and in full, without assessment or any of the provisions applicable to notes given after the organization, and in the course of the regular business of the company. That act, however (page 445, § 10), authorizes such .corporations, after organization, and, indeed, requires them to declare, in their filed charter, “ the mode and manner ” of doing business as such organized company. And the charter of the company in the cases before us, in its 11th section “(Case, folio 25), provides for taking “premium notes ;” which certainly cannot be a part of the capital stock. So that, under the law of 1849, there was such a thing as a “ premium note,” different and distinct from a capital stock note ; and the premium notes were of a different .tenor from a stock note drawn according to the law, and controlled by different rules as to calls and collection.
Taking these positions to be correct, the case of White agt. Haight (16 N. Y. Rep. 310) by no means conflicts with the other decisions I have alluded to. At p. 314 of that case, it is admitted that the note there sued (called, indeed, a “ premium note,”) “ formed part of the original capital.” So that it was, of course, under the 5th section above referred to; and though, oti. its face not of the tenor required by the act, it was (and such was the decision of that ease), payable as by that section the law controlling the intent of the parties^ and making that *163intent accord with the law. And the whole of that decision is, that such a note—one given as part of the capital stock—-is a stock note, and payable as such, no matter what its tenor.
In the cases before us, however, there is neither admission nor proof that either of the notes was a part of the original stock. Nor does the referee find either of them to be so.
The plaintiff claims, indeed, that the points on which the Devendorf cases were decided were not taken before the referee. But, allowing (what is by no means certain) that the 4th ground on which a non-suit was asked, “ that the complaint does not state facts sufficient to constitute a cause.of action,” is not aptly taken, as taken for the want not of proofs but of allegations, or as being too indefinite; allowing this not to be well taken, the second ground for asking the non-suit, “ the defendant is liable only to his proportion,” &a, is plainly consistent with no other line of defence, than that the note was not a stock note, and so liable merely to assessment, &c.
I should hold these notes to be, according to their tenor (in the absence of proof to the contrary), premium notes, and not stock notes; and thus fully within the decisions in the Devendorf cases. Of course, the judgments should be set aside, and a new trial be had.