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App. Div.]

Fourth Department, March, 1908.

In the case at bar it seems to me there can be no question as to the applicability of these provisions of the Code. The defendant was plainly and concisely charged with having misappropriated and stolen the money belonging to the People's Mutual Life Insurance Association and League. The amount which he had appropriated was alleged; the circumstances under which he misappropriated the same were alleged. We think it is not of consequence to him whether or not the person or entity from which he stole was an individual, a corporation, joint stock association, copartnership or other entity authorized by the laws of this State to carry on business under its laws. In other words, we hold that an indictment which charges a defendant with stealing from and misappropriating money belonging to another, concededly not his own, is a good indictment, and that it is not essential to allege the character of the person, corporation or entity from which he so stole it or whose money he so misappropriated, provided always that it is alleged that it was not his own.

The judgment and order appealed from should be reversed.
All concurred.

Judgment reversed, demurrer overruled and proceedings remitted to the clerk of Ontario county, pursuant to section 547 of the Code of Criminal Procedure, in order that the defendant may plead to the indictment.

FRANKLIN T. HAMMOND, as Receiver of the ATLAS MUTUAL INSURANCE COMPANY, Respondent, v. SEYMOUR H. KNOX, Appellant.

Fourth Department, March 4, 1908,

Notice of judicial proceedings - effect of failure to appear - mutual fire insurance - assessments constitutional law

decision of foreign

court levying assessment given credit here - exemplified record as evidence - right to cancel policy - effect of insolvency.

In every action or proceeding in court where one interested has been duly notified at the outset and neglects to appear, he is entitled to receive no further notice unless required by statute.

Where the statute under which a foreign mutual fire association is organized empowers it to make assessments upon members to pay losses and authorizes the

Fourth Department, March, 1908.

[Vol. 125.

supreme judicial court of that State to examine as to the necessity of such assessment and order the same to be made, a notice by mail of such application is sufficient, and if a member so notified fails to appear and contest the proceedings, he cannot afterwards assail them upon the ground that no process of the court was served upon him.

By virtue of section 1 of article 4 of the United States Constitution the courts of this State must give full faith and credit to an exemplified record of proceedings in the court of another State imposing an assessment on the members of a mutual fire association organized under its laws, and such record is also prima facie evidence as to the proper amount of the assessment. Common-law evidence of the necessity or validity of such assessment is not necessary in order to enable the receiver of such corporation to recover an assessment.

Although the rights and liabilities of the members of such association are primarily fixed by their contract, the foreign statutes regulating the assessments become part of the contract.

Although the policy issued by such association contains a clause that it may be canceled at any time at request of the assured, and if so canceled, and the premium has been actually paid, the unearned portion shall be returned, the right to cancel is not available to the assured after the association has been adjudged insolvent.

Although after insolvency the court has allowed the receiver to settle with an assured by accepting the earned premium to date of insolvency, expressly excluding "any claim for any possible future assessment," he is not relieved from future contributions required by the terms of the policy.

APPEAL by the defendant, Seymour H. Knox, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Erie on the 11th day of June, 1907, upon the decision of the court rendered after a trial at the Erie Trial Term, a jury having been waived.

Frank Gibbons, for the appellant.

L. M. Cummings, for the respondent.

SPRING, J.:

On the 11th day of March, 1904, the plaintiff was appointed receiver of the Atlas Mutual Insurance Company, a mutual fire association organized in pursuance of the laws of the State of Massachusetts, with its principal place of business in Boston in that State. The defendant resides in the city of Buffalo, in the State of New York; and in September, 1903, the insurance company issued to him two fire insurance policies. The premium on one policy was $555, and the other $2,620. Each policy contained an "agreement by the

App. Div.]

Fourth Department, March, 1908. insured as a condition of this policy that the said insured or their legal representatives shall pay in addition to said cash premium all such sums as may be assessed by the directors of said company, pursuant to the laws of the commonwealth of Massachusetts, but in no event shall said assessment or assessments exceed a sum equal to the amount of said cash premium."

This action is commenced by the receiver to recover of the defendant assessments claimed to have been made in compliance with the contract provision quoted, and the regularity of the proceedings terminating in the assessment is assailed. The record on appeal does not purport to contain all the evidence given upon the trial. It is made in form a bill of exceptions, containing a synopsis of each of the exhibits received in evidence and which pertain mainly to the proceedings culminating in the assessments against the stockholders. These exhibits and the findings of the court, which in the main include in detail the various steps taken, with very little oral proof, comprise the case on appeal.

The proceedings were instituted in pursuance of certain statutes of the State of Massachusetts. The Revised Laws, chapter 118, sections 47 and 48, are as follows: "Section 47. If a mutual fire insurance company is not possessed of cash funds above its reinsurance reserve, sufficient for the payment of incurred losses and expenses, it shall make an assessment for the amount needed to pay such losses and expenses upon its members liable to assessment therefor, in proportion to their several liability. Section 48. If by reason of depreciation or loss of its funds or otherwise, the cash assets of such a company, after providing for its other debts, are less than the required premium reserve upon its policies, it shall make good the deficiency by assessment in the mode provided in the preceding section."

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Section 49 provides that if the directors of the company determine that a necessity exists for a call or assessment upon the members, application may be made "to the Supreme Judicial Court for any county, by a petition in the nature of a bill in equity, praying the court to examine such assessment or call, the necessity therefor, and all matters connected therewith, and to confirm, amend or annul the assessment or call or to order that the same be made as law and justice may require."

[Vol. 125.

Fourth Department, March, 1908. A hearing is had before the auditor appointed by the court, and upon his report the court acts, making such a decree as "justice and equity require," and the decree is final "and conclusive upon the company, and all persons liable to the assessment or call, as to the necessity of the same, the authority of the company to make or collect the same, the amount thereof, and all formalities connected therewith. An assessment or call altered or amended by vote of directors and decree of the court thereon, shall be binding upon all parties who would have been liable under it as originally made, and in all legal proceedings shall be held to be such original assessment or call."

The findings show that while the defendant was insured in the company "losses occurred in the lawful business of the said company, and by reason of depreciation and loss of its funds the cash assets of the said company, after providing for its other debts, became less than the required premium reserve upon its policies." That "by reason of such depreciation and loss it became necessary to levy a mutual assessment upon the members of the company to provide for and pay the same in accordance with the laws of the Commonwealth of Massachusetts." The plaintiff was appointed receiver of the company March 11, 1904, by said Supreme Court, and made application in December following to that court for an order or decree directing the assessment to be made upon the members. The defendant had notice by mail of this proceeding, "and of all proceedings thereunder," including the hearing on the report of the auditor. In pursuance of the decree an assessinent was ordered by the directors of the company "of $73,500 upon the former and present members of the company liable thereto, the same being necessary for the payment of incurred losses and expenses of collecting, and of receivership, the company being insolvent."

The assessment was, on May twelfth thereafter, duly ratified by the Supreme Court, but no notice of the application was served upon the defendant, nor was there any appearance upon his part in any of the proceedings. Schedules were made in said decree apportioning said assessment among the merabers of the said company, and the defendant's aliquot proportion, as fixed by the decree, was $1,342.92, and which he refused to pay on demand.

The record is not clear as to the exact amount of the liabilities of App. Div.]

Fourth Department, March, 1908. the company. The resolution of the directors passed February 11, 1905, declares that the assessment of $73,500 is "necessary for the payment of accrued losses and expenses," including those of the receivership; and this resolution was confirmed by the court and the assessment made on that basis. The amount to be raised was to be "levied with rests at the time of each substantial fire loss," and aggregates $26,750.61. Then follows this clause in the resolution: "And that there be added by way of overlay to the amount so levied upon each particular policy such a percentage of every such amount as will bring the aggregate of the amounts levied on all such policies including said overlay up to the sum of seventy-three thousand five hundred dollars ($73,500) the amount of the assessment herein voted and ordered."

An additional petition in the proceeding sets forth the amount of the assets of the company, and states that the "aggregate possible liabilities of the company, not including the expenses of receivership, are $75,583.50." The evidence taken before the auditor is not in the record, but the synopsis of his report is that it was necessary to raise by assessment $36,751.61, and that there were creditors in New York State to the amount of $25,050.32; and it appears there were large sums due from assessments upon policyholders residing in that State.

The purpose of the statutes of the State of Massachusetts authorizing assessments against the members of these mutual companies was to provide a summary, speedy method of providing a fund to meet losses as they occurred. What seems to be a low premium was fixed by the Atlas Company, but there was an additional liability not in excess of the cash premium provided for in the policy. The policyholders were widely scattered for the business of the company was carried on in many of the States, and personal notice was not required to be served upon them, but notice by mail was deemed to be sufficient. This notice apparently was not required in each stage of the proceeding. The defendant had notice by mail of the original petition to the court and of the other steps in that distinct part of the proceeding, but did not appear and no notice of the subsequent proceedings was given him. Had he appeared, I assume he would have been entitled to notice of every step leading up to the final decree. In every action or proceeding in court where one inter

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