to be filled, or upon the death or disqualification of a person elected to office before the commencement of his official term, or upon the occurrence of a vacancy in any elective office which can not be filled by appointment for a period extending to or beyond the next general election at which a person may be elected thereto, the governor may in his discretion make proclamation of a special election to fill such office, specifying the district or county in which the election is to be held, and the days thereof, which shall be not less than thirty nor more than forty days from the date of the proclamation."

It is my opinion that the Governor is authorized, in the situation presented in the city of Hudson, to proclaim a special election to fill the office of alderman of the first ward caused by reason of a tie vote at the general election held on November 6, 1917. From a reading of title 6, section 20, of the city charter, I am led to the conclusion that the power of the common council to order an election to fill a vacancy is limited to those vacancies enumerated in section 30 of the Public Officers Law, viz., the death of the incumbent; his resignation; his removal from office; his ceasing to be an inhabitant of the State, or, if he be a local officer, of the political subdivision or municipal corporation of which he is required to be a resident when chosen; his conviction. of a felony or a crime involving a violation of his oath of office; the judgment of a court declaring void his election or appointment, or that his office is forfeited or vacant; his refusal or neglect to file his official oath or undertaking, if one is required, within the time prescribed by law.

It should be observed that section 292 of the Election Law provides for the filling of vacancies which have occurred because of a failure to elect, to those occurring before the commencement of the term, upon the death or disqualification of the person elected to office, and, lastly, to a vacancy "in any elective office." A vacancy "in any elective office" is a vacancy arising during the term of that office, and the power of the Governor to fill such vacancy is limited to cases where the office "cannot be filled by appointment." If the vacancy had occurred after the beginning

of the term of office, no question would arise as to the power of the common council of the city of Hudson to order a special election to fill such vacancy. This vacancy, however, has occurred from a failure to elect by reason of a tie vote, and clearly comes within the provisions of section 292 of the Election Law empowering the Governor to order a special election.

Also assuming that the common council of the city of Hudson was possessed of the power and authority to call a special election to fill the vacancy in question, pursuant to title 6, section 20, of the city charter, such body is without power at the present time for the reason that such section directs that a vacancy "shall be filled by a special election to be ordered by the common council at its first regular meeting after the occurrence of the vacancy.” The first regular meeting of the common council, after the vacancy occurred, having passed, no authority exists in such body to call a special election at this time. The Governor now has, and has had for a period of over seventy years, a well-defined power in instances of this character to call a special election; and even though the common council have the power to call a special election, at its first regular meeting after the occurrence of the vacancy, the omission to exercise that power would be a sufficient reason for the Governor to issue a proclamation for such special election.

I therefore reach the conclusion, for the reasons hereinabove set forth, that the Governor is authorized, in his discretion, under the provisions of section 292 of the Election Law, to proclaim a special election to fill the office of alderman of the first ward of the city of Hudson, where a vacancy exists by reason of a tie vote at the election held on November 6, 1917.

In the Matter of CONSTRUING THE INSURANCE LAW, SECTIONS 70 AND 170, Relative to Surety Companies and Title Companies Guaranteeing Mortgage Loans

(Opinion dated March 25, 1918)

Surety companies cannot guarantee the repayment of loans secured by a bond and mortgage.

Several surety companies propose to issue a bond to Federal Land Banks in connection with loans to be made by such banks to farmers upon the security of bond and mortgage, and it is proposed to facilitate these loans by having the banks accept as to title an abstract covering twenty-one years last past, approved by the bank's abstractors, and a bond given by the borrower with approved sureties, such bond reciting that in consideration of the premium the surety company guarantees to said bank the repayment of any part of said loan that may, through any defect in the title of the mortgagor to the mortgaged property, be uncollectible from the mortgagor, his heirs or assigns. Under the New York statutes a surety company may guarantee the performance of a contract and when writing the bond herein considered it is this power which the surety companies claim they are exercising.

Held, that the form of bond in question does not guarantee the performance of a contract, the contract of the farmer being to repay the loan, but the surety company does not guarantee in any respect the contract of the borrower to repay such loan. The bond simply indemnifies or insures the bank against loss by reason of a defect of title in the mortgaged premises. The surety company may not undertake the proposed business. Where the hazard is that of title the Legislature has conferred the insurance company business upon title companies to the exclusion of all other insurance companies. Sections 70 and 170 of the Insurance Law.

Hon. Jesse S. Phillips, Superintendent of Insurance, submitted the following statement of facts:

"Several surety companies, as appears from a communication of the Superintendent of Insurance dated February 20, 1918, intend to issue a bond to Federal Land Banks in connection with loans made by such banks to farmers upon the security of bond and mortgage. In order to facilitate these loans by obviating delays due to a complete investigation of the title of the mort

gaged premises, an abstract covering twenty-one years last past is to be accepted by the banks after approval by the bank's abstractors and a bond given by the borrower with approved sureties conditioned as follows:

"Now therefore, in consideration of a premium of Dollars, the

...

Surety Company does hereby guarantee

to said bank the repayment of any part of said loan that may, in consequence of any defect in the title of the mortgagor to the mortgaged property, be uncollectible from the mortgagor, his heirs or assigns.""

Based upon the facts above stated the superintendent also submitted an inquiry, together with a request for an opinion thereon, as to whether the proposed transactions will invade the field of business held by title companies under the statutes, or, more precisely, whether such transactions are or are not title company business exclusively under the provisions of the Insurance Law.

LEWIS, Attorney-General.- Under our New York statutes a surety company may be formed for the purpose, among other powers, of "guaranteeing the performance of contracts (Insurance Law, § 70), and it is this power which the surety companies claim they are exercising when writing the above bond. From a careful analysis of the bond I am at loss to see how it guarantees the performance of a contract. The contract of the farmer is to repay the loan. The proposed surety company bond does not guarantee in any respect the contract of the borrower to repay the loan. The bond in substance simply indemnifies or insures the bank against loss by reason of a defect of title in the mortgaged premises. It is an engagement that the title to the premises mortgaged is good and, if not, the company will pay any loss resulting from defect of title, which, as I shall hereinafter point out, is a policy of title insurance under section 170 of the Insurance Law. Such a bond as the company proposes to write acknowledges and recites the existence of a primary obligation upon the part of the borrower to repay the loan, but does not guarantee the performance of that obligation by the borrower.

The business of a title insurance company is thus defined in section 170 of the Insurance Law:

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"S 170. Incorporation.

Five or more persons may form a corporation for one of the following purposes:

"1. To examine titles to real property and chattels real, to procure and furnish information in relation thereto, make and guarantee the correctness of searches for all instruments, liens or charges affecting the same, guarantee or insure the payment of bonds and mortgages, or notes of individuals or partnerships secured by mortgages upon real property situated in this or any other state, and bonds, notes, debentures and other evidences of indebtedness of solvent corporations secured by deed of trust or mortgage upon real property situated in this or any other state, invest in, purchase and sell, with such guarantee or with guarantee only against loss by reason of defective title or incumbrances, bonds and mortgages, and notes of individuals or partnerships secured by mortgages upon improved and unincumbered real property situated in this or any other state worth fifty per centum more than the amount loaned thereon, and bonds, notes, debentures and other evidences of indebtedness of solvent corporations secured by deed of trust or mortgages upon improved and unincumbered real property situated in this state or outside of this state worth fifty per centum more than the amount loaned thereon, and guarantee and insure the owners of real property and chattels real and others interested therein against the loss by reason of defective titles thereto and other incumbrances thereon, which shall be known as a title guaranty corporation;

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The net result effected through the proposed policy to be issued by the surety company to the land bank is the same as if the surety company had under the power last above recited issued a policy of title insurance directly to the bank as a party "interested" in real property as mortgagee.

The agreement of the surety company is not a guarantee of the payment of the mortgage by the borrower, for there are no provisions therein contained that the principal or interest of the