The Chief Justice.
This action is brought by the assignee of a policy of insurance to recover a loss sustained by fire. The policy was originally effected by William J. Cántelo, on the 29th of June, 1843, for the term of five years. On the 23d of October, 1844, Cántelo conveyed the property insured to Enoch Durar, the plaintiff, and at the same time assigned to Durar the policy of insurance. On the 6th of September, 1845, within the term for which the insurance was effected, the premises were destroyed by fire.
It has not been questioned, and upon the facts disclosed in the case it must be taken as established, that the original policy of insurance was duly executed, and that in the hands of Cántelo it was a valid policy ; that the policy was assigned in good faith by Cántelo to the plaintiff in due form, so far, at least, as to conclude Cántelo, and to divest him of all interest in: the policy; that the premises insured were also conveyed in fee by Cántelo to the plaintiff and that at the time of the fire they were owned by him; that there was a total destruction of the" premises by fire; that the fire resulted from accident; that due notice of the loss was given by the plaintiff to the defendants; that all proper and necessary steps consequent-upon- the- -loss were taken by the plaintiff to entitle him tó recover, and that the action was- in due form of law. There was an attempt, indeed upon the trial, to show that the transfer of the- property, was colorable only, and that the fire was the result not of accident but of design. But the attempt signally failed, and is now adverted to only, as indicating the probable grounds upon which the defendants originally resisted the payment of the insurance.
The only question really involved in the ease is, whether the policy was so assigned to the plaintiff as to constitute him a member of the company, according to its charter, and to entitle him to recover upon the policy for the loss sustained.
The defendants are incorporated as a mutual insurance company. It is ordained by the act of incorporation (section 2), “ that all persons who shall insure with the said company, and also their heirs, executors, administrators, and assigns, continuing to be insured in said company, as herein after provided, shall thereby become members thereof during the period they shall remain insured by the said company, and no longer.” And, by section 7, it is further ordained, “ that when any property insured by the said company shall be alienated, by sale or otherwise, the policy shall thereupon he void, and he surrendered to the directors of said company to be can-celled ; and upon such surrender the insured shall be entitled to receive his deposit notes, upon the payment of his proportion of all losses and expenses that have accrued prior to such surrender; but the grantee or alienee having the policy assigned to him may have the same ratified and confirmed to him, for his own proper use and benefit, upon application to the directors, and with their consent, within thirty days next after such alienation, on giving proper security, to the satisfaction of said directors, for such portion of the deposit or premium note as shall remain unpaid; and, by such ratification and confirmation, the party causing such security to he given shall be entitled to all the rights and privileges, and subject to all the liabilities to which the original parly to whom the policy issued was entitled and subjected to under this act.”
There are, then, prescribed by the charter two modes, only, in which an individual may in his own right, not by right of representation, become a member of the company. 1. By effecting an insurance, in which ease the party insured deposits his own note for the premium. 2. By taking a transfer or conveyance of the property insured, together with an assignment of the policy of insurance, and, within thirty days thereafter, giving proper security, to the satisfaction of the directors, for such portion of the deposit or premium note as shall remain unpaid, and having the assignment ratified and confirmed by the directors.
The plaintiff claims in the latter of these modes. The material facts disclosed by the case in support of his claim are, that the property insured having been conveyed, and the policy assigned to the plaintiff by the original policy holder, on the 23d of October, 1844, the agent of the plaintiff, on the same day, called at the office of the company, in order to have the transfer confirmed to him. The secretary of the company was then informed by the plaintiff’s agent that the property insured for Cántelo had been sold to the plaintiff, who wished the insurance continued to him. The policy was produced, with Cantelo’s assignment to the plaintiff endorsed upon it. The consent of the company to the assignment, printed in blank upon the policy, was thereupon filled up and signed by the secretary, in the following words: “ The Hudson County Mutual Insurance Company hereby consent that the within policy of insurance be assigned by the assured to Enoch Durar, of the city of Philadelphia, this twenty-third day of October, 1844. (Signed) Stephen H. Lutkins, secretary.” The secretary, then, in reply to inquiries of the plaintiff’s agent, stated that the plaintiff was fully insured, and that nothing further was required of him. In the margin of the company’s book of registry, there being no other transfer book, opposite to the number of the plaintiff’s policy is an entry, the same as was usually made on assignments of policies, in these words: “Permitted to assign to Enoch Durar, Philadelphia, 23 October, 1844.” The original premium or deposit note given by Cántelo was left with the company. No other security was given by the plaintiff. A loss having occurred by fire, about the first of August, 1845, for which the company were responsible, an assessment of two per cent, was made by the directors upon Cantelo’s note, which was paid by the plaintiff. This fire occurred, and the assessment was made by the directors, and paid by the plaintiff, after the assignment by Cántelo to liim, and before the destruction of his own premises by fire. At a contested election for directors of the said company, in March, 1845, the proxy of the plaintiff, given by him as a member of the company, was voted upon. After the fire had occurred, preliminary proofs ivere furnished to the company by the plaintiff’s agent. A bill of particulars and evidence of the amount of the loss was demanded by the company of the agent, without questioning the plaintiff’s membership or right to recover.
Besides the policy in question, there were two others given by the company to Cántelo, contemporaneously with the first, upon parts of the premises conveyed by Cántelo to the plaintiff, which were all assigned at the same time and under like circumstances to the plaintiff, upon all which assessments were paid by him to the company. After November, 1845, additional security for the deposit notes given upon these policies was required of the plaintiff; and upon the plaintiff’s failing to give the security required, the cancellation of the policies was entered by the secretary upon the books of the company by order of the board of directors.
It further appears in evidence that the board of directors met quarterly; but that the issuing of policies, the approval of premium notes, the assent to transfers of policies, were not formally acted upon by the board, but were intrusted to the president and secretary, as the agents of the company.
Upon this statement of the evidence, it is apparent that if the rights of the plaintiff, as a member of the company, are not complete, it is from no ladies upon his part or want of recognition by the company of his rights. Immediately upon the assignment being made he gave notice of the fact to the company, and of his wish to have the benefit of the policy. The company assented to the assignment; the transfer was entered upon their books, and they informed him that nothing further ivas required of him. He complied strictly with the requirements made of him by the agent of the company, at their office. As a member of the company, he paid the assessments upon the original premium note; he voted as a member of the company; his membership was not questioned when he applied for indemnity for his loss. After the fire had occurred, his rights of membership upon two policies, similarly situated, were formally recognised by the board of directors. He was required to give additional security upon them, and upon his failing so to do, the policies were cancelled by order of the directors.
But it is insisted, on the part of the defendants, that it is not in the power of the directors to waive any’ qualification of membership prescribed by the act of incorporation; that, by the charter, three things are essential to the completion of the assignment, viz. — 1. The consent of the directors to the assignment. 2. The giving proper security by the assignee to the satisfaction of the directors. 3. The ratification and confirmation of the assignment by the directors. The soundness of these positions is admitted. The giving of the security, therefore, (as well as the consent and approval of the directors) is by the charter an essential qualification of membership. It remains to inquire whether the essential charter qualifications to constitute the plaintiff a member of the company were complied with.
1. There is no question but that the assent of the directors to the assignment was duly given. It was given by the secretary, who, in this behalf, acted as the agent and by the authority of the board, and was endorsed by him upon the policy in usual form. The company were bound by his act.
2. Was proper security given by the assignee to the satisfaction of the directors? Was any security given in contemplation of the charter? May the original deposit note given by thé party originally insured be deemed the security contemplated by the charter ?
The charter does not require that the assignee of a policy (as it does in ease of the party originally effecting an insurance) shall give his own note. He is required simply to give security to the satisfaction of the directors; it may be by note, bond, or mortgage, his own paper of the paper of a third party. He is to give this security for such portion of the premium as shall remain unpaid upon the original deposit or premium note. The phraseology of the charter might convey the impression that the security contemplated was in addition to the original deposit note. But the true meaning of the charter is undoubtedly expressed in the 14th article of the by-laws of the company, which require that satisfactory security shall be given “ for the payment of the residue of the premium, given for said policy.” The charter declares that upon the alienation, by sale or othenoise, of any property insured by the company the policy shall be void, but it does not declare void the premium note. The insured is entitled to receive his deposit note only upon the surrender of the policy and the payment of his proportion of all losses and expenses accrued till the time of the surrender. If the policy be assigned the note remains good, unless surrendered or the maker discharged from liability by the company. In cases of sale, the vendor would naturally desire to terminate his responsibility upon his premium note, and the company (the party insured having divested himself of his real estate insured) might often desire other and better security. But if the vendor be willing to continue his liability if the company be satisfied with the security, and if the parties agree that the original premium note shall stand as security for the balance of the premium remaining due for the benefit of the assignee, is there any thing in the transaction in contravention of the charter? We have seen that the charter does not require that the assignee shall give his own note; he may give the note of any third party, if satisfactory to the directors. And if he may give the note of the party originally insured, why may not the original premium note stand as the security ? Of the liability of Cautelo, the party originally insured, upon his note during the continuance of the policy, there can be no doubt. He is, by the terms of the charter, liable on his note for all losses accruing up to the time of the surrender of the policy. It was «o held by the Supreme Court of New York, even where there was no assignment, and where the fire occurred after the property insured had been alienated. Neavie v. The Onondaga Mut. Ins. Co., 7 Hill 49.
The by-laws of the company provide that a mortgagee may have a policy of insurance effected by the mortgagor assigned to him upon the security of the original deposit note, and it is in evidence that it is customary for policies to be assigned to mortgagees precisely in the mode, that the policy was transferred to the plaintiff. It is true the by-laws of the company contemplate a different mode of perfecting an assignment to a mortgagee from that prescribed in case of a sale. But does the charter contemplate a different mode? We have seen that the charter provides but for two ways in which a person in his own right can become a member of the company, the one by being an original insurer, and the other as an assignee, “ continuing” (in the language of the charter) “ to be insured in said company, as herein after provided.” Now there is no other mode provided by the charter in which an assignee of a policy can become a member but that prescribed in the 7th section, which in terms applies to all alienations, by sale or otherwise. It is fully conceded that this section may have been designed to apply primarily to an alienation of the entire interest of the- party insured. But it dpes clearly include by its terms alienations by mortgage, as well as by sale, conditional as well as absolute alienation. It includes all alienations by sale or otherwise.
And if assignments in case of mortgage are not made by authority of that section, by what authority are they made? The assignee of the policy can only become a member in the mode provided in the charter. No other mode is provided in the charter, except that pointed out in the 7th section; and, consequently, unless a mortgagee becomes a member by sanction and under the provision of the 7th section, he.cannot be a member or have any right to recover upon his policy. The secretary of the company testifies that the assignment of policies to mortgagees are uniformly made in the same mode adopted in the present case. The permission to assign is endorsed by the secretary upon the policy; it is entered in the books of the company; the assignor’s deposit note is held as security, and, unless the directors demand further security, the interest of the assignee is perfect. No prejudice can arise to the rights of the corporation or of other insurers by holding the assignment valid. It is in the power of the directors, at any moment whenever they deem proper, to demand addi tional security, and if not furnished the policy may be declared void. This course was adopted by the company in regard to the other two policies held by the plaintiff. It was not done in regard to this policy. They had notice of the transfer; it was upon their own books. Their agents received the plaintiff’s assessment with notice of the transfer, and the natural and legal presumption is that they were satisfied with the security of the original deposit note, and that they ratified and approved the transfer. They held the deposit as security ; they consented to the transfer; they assured the plaintiff that he was fully insured, that nothing further was required of him; he voted as a member of the company; they received his money for assessment upon the premium note. Could clearer evidence be offered of the approval of the transfer by the board?
It will not be contended that a formal vote of the board was necessary for this purpose. It is enough if their assent may fairly be presumed from the acts of their authorized agent or from their own acquiescence. No such vote appears ever to have been given by the board. The evidencie shows that consent to the transfer of policies and the approval of secretary was not formally acted on by the board, but was intrusted to their agent.
Haines, J.
This case comes before us upon a special verdict, and upon the facts found by the jury it is to be determined whether the plaintiff has the right by law to recover.
The action is founded upon a policy of insurance effected by the defendants to William J. Cántelo, and by him assigned to the plaintiff at the same time with the conveyance to him of the properly insured.
The defendants resist the claim, upon the ground that there was no contract between them and the plaintiff; that the policy was not approved by the directors of the company, nor confirmed and ratified by the plaintiff; and that he did not give satisfactory security for the payment of the residue of the premium given for the policy.
The seventh section of the charter of the company declares, that on the alienation of the property insured the policy shall be void, and surrendered to the directors to be cancelled; but that the grantee or alienee, having the policy assigned to him, may have the same ratified and confirmed to him for his own use and benefit, upon application to the directors, and with their consent, within thirty days after such alienation, on giving security to the satisfaction of the directors for such portion of the deposit or premium as shall remain unpaid.
The fourteenth article of the by-laws provides, that if the assignee, who shall have purchased the whole property insured, shall within thirty days after the purchase present the policy and assignment to the secretary, he may have the same confirmed and ratified to him; and when the assignment shall be approved by the directors, the secretary shall record the same, and the confirmation thereof by order of the directors, when the grantee or alienee shall have given satisfactory security for the residue of the premium given for said policy.
If the plaintiff complied substantially with the requisites of the charter and of the by-laws, and the policy was ratified and confirmed to him, the defendants are liable for the loss sustained.
The conveyance was made to the plaintiff of all the property insured on the 22d day of October, 1844, and the policy of insurance duly assigned at the same time.
On the 23d day of October, the day following, the plaintiff, by his agent, presented the policy and assignment to the secretary of the company, and informed him of the conveyance and of his desire to have the insurance continued to him. The consent of the company, printed in blank on the policy, was then filled up by the direction of the secretary, and signed by him ; and on being asked if any thing more was requested of the plaintiff to have him fully insured, he answered there was not: and on being further asked if the plaintiff was fully insured, he replied that he was.
The plaintiff took possession of the property, and, by his tenants, occupied it until the 16th day of September, 1845, when the building and machinery were consumed by fire, and became a total loss.
1. The defendants insist that they are not responsible, because the directors never approved the assignment, nor ordered it and its confirmation to be recorded.
The objection is not sufficiently sustained, either by the law or by the facts, to afford a proper ground of defence.
The plaintiff had literally complied with the requisites of the charter and of the by-laws, by presenting the policy and assignment to the secretary, and procuring the endorsement of the assent of the company in the usual form. If any thing more was required in that particular, it was to have been done by the secretary. His duty it was to lay the matter before the directors, for their approval. If they disapproved, they should have informed the plaintiff to that effect, and not have suffered him to rely upon a policy which without their consent to its approval would be void. But “ the register book” of the company, the only record of assignments kept by them, contains, in connection with the registry of the policy to Cántelo, the following : “ Permitted to assign to Enoch Durar, of Philadelphia, 23d October, 1844.” This entry, made by the secretary in the books of the company, and subject at all times to their inspection, presupposes authority to make it. Whether the record was made by order of the directors in this particular case, or in pursuance of general instructions given to him, the authority is the same, and it binds the company. Bank of Columbia v. Patterson’s administrators, 7 Cranch 299; Peters v. Washington Insurance Co., 4 Cowen 645.
It is evidence, famished by their own record, of the confirmation and ratification of the policy, and of their consent to its assignment to the plaintiff.
2. But it is further insisted that the defendants are not liable for the loss, because the plaintiff did not give some new security for the payment of the residue of the premium.
The company had a right to require satisfactory security, by a now note or otherwise. Neither the charter nor the by-laws require them to take the note of the assignee, nor prescribe what security they should take. The charter directs that it be “ proper security to the satisfaction of the directorsthe bylaws express it to be “ satisfactory security.” Cántelo had made the assignment without any agreement for the cancelling of his note. It was, consequently, left in the hands of the company by his consent, and the liability upon it was never removed. If the company were satisfied with the note, that was sufficient. It was “ security to the satisfaction of the directors,” and within the letter and spirit of the charter.
Their agent, the secretary, acting within the scope of his authority, said that everything had been done by the plaintiff that was required of him, and his acts and declarations on that subject bind his principals.
If the proposition to assign the policy was submitted to the directors, they knew, or had the means of knowing, what security they had for the premium, and, if dissatisfied with it, should have so expressed themselves and informed the plaintiff. Their silence implies their assent. If the matter was not submitted to them, but the whole business as to assignments committed to the secretary, his assenting to this assignment, and his recording it, is evidence that be, as the authorized agent of the company, was satisfied with the security, and accepted it.
This view of the case is strengthened by the conduct of the directors themselves after the assignment. In March, 1845, one of the officers of the company procured the proxy of the plaintiff to vote for directors, in virtue of the. polkw; and votes were permitted to be cast upon it in two several elections, the first having been set aside for irregularity.
It is true the election was conducted by inspectors, but they were chosen, doubtless, for their impartiality as well as for their capacity; and it was their duty to see that none but members of the company voted. They acted under the authority of the directors, and upon the evidence of membership furnished by them, which was the books of the company containing the names of the members, and which the inspectors compared with the proxies.
In this transaction the plaintiff was treated as a member of the company, and consequently as a pai*ty insured.
Again, in July, 1845, when the fire occurred on the premises of Mr. Savoy, a party insured, and the loss was to be assessed upon all the members, in proportion to the amount of their premium notes, a list of all the notes was furnished by the secretary to the treasurer, who made the assessment. On that list was a statement of the note of William J. Cautelo, given on this policy; an amount was assessed upon it, and paid by the plaintiff.
The notice of the assessment, it is true, was not directly given to the plaintiff, but was formally made out to Mr. Cautelo, and in his absence served by delivering it to his son. Bnt this does not relieve the defendants; on the contrary it strengthens the evidence against them, for it showed that they regarded Cautelo as still liable to them, and liis note as a subsisting security in their hands upon which they might assess a due portion of the losses. If the note had not been accepted as satisfactory security at the time of the assignment, they had no right to assess upon it any loss incurred after that time; and it is of no consequence whether the plaintiff was directly liable to the company for the residue of the premium or not: the note was left for their security, and they looked to that, and upon it assessed and received its due proportion of the loss. If the money assessed had not been paid, or if they had become dissatisfied with the security, they could have terminated the risk, and cancelled the policy according to the provisions of the 9th section of the charter, and as was done on two other policies between the same parties.
Again, in April, 1815, the finance committee, duly appointed by tlie board of directors, reported that they had examined all the premium notes that belonged to the company, and found that certain persons, and among them William J. Cautelo, on this very policy and on two others, were insured too high ; and that, as to certain other policies named by them, some of the premium notes were not legal, and that on one of them additional security should be required.
Here was the report of a committee specially appointed to examine the securities directly recognising the premium note and the policy in full force and effect, and that report presented to the directors, and accepted and voted upon by them.
But the evidence against the defendants does not stop even here. When notice of the loss in this case was given to the company, and the preliminary proofs delivered to them, they didnot deny their liability, or the existence of the policy, or that the plaintiff was a member of the company, on the contrary, they acted on the supposition of a subsisting valid policy; they required a bill of the particulars and evidence of the amount of the loss, and evidence of the cost of the building and machinery. And they, moreover, appointed a committee to view the premises where the fire occurred.
At the time of the assignment of the policy, two other policies, issued by the defendants to William J. Cántelo, were as- ‘ signed to the plaintiff, and the like proceedings were had upon them in relation to the assignment, confirmation, and security as upon this, and the defendants treated those as policies confirmed to the plaintiff, allowed him to vote upon them, assessed a loss upon them, and, in January, 1846, gave notice to the plaintiff to furnish further security for the premiums; and, because he declined to furnish the security required, the directors declared the risk taken upon them to be terminated and the policies can-celled.
The testimony cleaidy shows that there was a contract of insurance existing between the parties at the time of the loss, and I am fully satisfied that the plaintiff is entitled by law to recover, and that judgment should be entered in his favor, and . against the defendants, for the amount of the damages assessed by the jury, with costs. ■
Ogden, J., concurred.
Judgment for the plaintiff.
Cited in Flanagan v. Cam. Mut. Ins. Co., 1 Dutcher 511; Branin v. Ins. Co., 4 Dutcher 96; Belleville Mut. Ins. Co. v. Van Winkle, 1 Beas. 340.