Carey v. Nagle. CAREY 0. NAGLE. District Court, District of Wisconsin; Februarý T., 1870. INSURANCE.-PREMIUM NOTES. By a supplement to its charter, a mutual insurance company was authorized to insure "for a specific rate of premium to be paid in cash, in the same manner as insurance companies" not mutual "are accustomed to do." The object of the supplement was to enable the company to issue two classes of policies, one on the mutual, and the other on the non-mutual plan, the premiums on the latter to be paid in cash. Held, that the company might accept a note for such premium, instead of cash; the taking it being a mere extension of the time of payment, and none the less a payment in cash. The bankruptcy of the company is no defense to an action by the assignee of a note given for the premium on a policy of insurance. Trial of an action upon a promissory note. This was an action by the assignee in bankruptcy of the Milwaukee Insurance Co., to recover the amount of a note made by the defendants to the company for a policy, for two hundred and forty dollars, payable in sums of sixty dollars on the first day of May annually for four years, without interest until due, and in case default should be made in the payment of any of the installments, then the whole to become due. The company was incorporated and did business for several years as a mutual insurance company, issuing policies and taking back notes, such policy holders being members of the company. By the act to amend the act to incorporate the company, it was provided that "the company shall have power in their discretion to make any and all insurance Carey v. Nagle. which by law they are or may be authorized to make, to any person or persons with whom they may agree to that effect, for a specific rate of premium to be paid in cash, in the same manner as insurance companies other than mutual insurance companies are accustomed to do. And in all such cases the insured shall not become members of the company, nor in any wise entitled to any share of the profits, premiums, or earnings, nor in any wise liable for the losses, debts, or liabilities of the said company, and all premiums received for such insurance shall be passed to the general credit of the company, and all losses growing out of said special policies shall be paid in like manner as losses under the ordinary policies of the company." Mr. Mann, for plaintiff. Mr. Butler, for defendant. MILLER, J.-A policy was issued for four years, under the amendment to the charter of the company, upon receipt of the note in suit for the payment of the annual premium. It is contended by the defendant's counsel that the premiums should be paid in cash simultaneously with the delivery of the policy, and that the company could not accept a note payable at a future time. The object of the amendment to the charter was to vest in the company the additional power to issue policies as a stock company for a specific rate of premium to be paid in cash. Insurance under this act may be made in the same manner as by other insurance companies not mutual. Policy holders stand in a dif ferent relation to the company from those under the mutual system. The insured under the amended charter are not members of the company, nor entitled to a share of the protits, premiums, or earnings of the company, nor subject to losses. I do not think the act requires premiums to be paid simultaneously with de Carey v. Nagle. livery and acceptance of policies. The act authorizes the company to make insurance to any person for a specific rate of premium to be paid in cash, in the same manner as stock companies. The company was not prohibited from extending the time of payment of premiums in cash. The company could transact business, in this respect, as other companies, and make its agreement with the insured as to the time of payment of premiums in cash. The note was a mere regulation of the time of payment, for the accommodation of the defendants. The premium was to be paid in cash, but the time of payment was extended. There is no statute law prohibiting such extension. The policy issued to these defendants imports a settlement of the premiums to the satisfaction of the company simultaneously with its execution and delivery, and binds the company in case of loss by fire, even if the note had not been given, or if the insured should become insolvent and unable to pay the premium. It is an every-day practice with stock companies to issue policies upon credit, containing exemption from liability on non-payment of the premiums. A provision in a policy duly executed, that no insurance, whether original or continued, should be binding until the actual payment of the premium, and the written acknowledgment thereof, does not invalidate a subsequent contract by parol, to renew such insurance for a premium not paid at the time the risk attaches, but postponed to a future day. Trustees v. Brooklyn Ins. Co., 19 N. Y. 305. In Insurance Company v. Sturgis, 2 Cow. 664, notes were received for premiums. See, also, Commercial Ins. Co. v. Union Ins. Co., 19 How. 318; Furniss v. Gilchrist, 1 Sandf. 53; McIntyre v. Preston, 5 Gilm. 48; Hamilton v. Lycoming Ins. Co., 5 Barr. 339. The contract between the insurer and the insured is mutual, but independent, and failure of one party literally to comply on his part does not exempt the other from liability. I am Carey v. Nagle. satisfied that under the amended charter, the company had lawful authority to issue policies, upon a simultaneous payment of the premiums in cash, or upon an extension of the time of payment by taking a note, or even without a note or security. It is not necessary to consider the question, whether the defendants are estopped from making this defense. The note in suit is a portion of the capital of the company for the payment of losses by fire. If defendants' property, covered by the policy, had been damaged or destroyed by fire, the company was bound by its contract of insurance to pay the loss. And in case of distribution of assets among creditors under the bankrupt act, defendants would be entitled to their pro ratu share. The note, being accepted by the company in lieu of cash paid at the date of the policy, is recoverable as so much assets, and defendants are in no worse condition by giving the note in lieu of paying the premium. Hone v. Boyd, 1 Sandf. 481; White v. Haight, 16 N. Y. 310; Sterling v. Ins. Co., 32 Pa. St. 75; Sands v. Hill, 42 Barb. 651; Huntley v. Beecher, 30 Id. 580; Alliance Ins. Co. v. Swift, 10 Cush. 433; Huntley v. Mer rill, 32 Barb. 626; Clark v. Middleton, 19 Mo. 53. Upon the same principle, the insolvency of a corpora tion is no ground for restraining collection of subscriptions for stock. Dill v. Wabash R. R. Co., 21 Ill. 91. And stockholders are liable on their subscription to the stock of an insolvent company. Ogilvie o. Knox Ins. Co., 22 How. 380. Judgment for plaintiff. The Caroline E. Kelly. THE CAROLINE E. KELLY. Circuit Court, Third Circuit; Eastern District of Pennsylvania, 1870. MERCHANT SEAMEN.-DESERTION. A seaman, by the consent, and with the assistance of the mate, but unknown to, and without the permission of the master, who was on board, left the vessel. Held, that the seaman was not guilty of desertion, nor liable to the forfeiture of the arrears of his wages. A seaman leaving a vessel under such circumstances is discharged; and if such discharge occurs in a foreign port, he is entitled to three months' extra wages, under section 2 of the act of February 28, 1803, in addition to the arrears of his stipulated wages. When the absence of a seaman from his vessel is set up to affect him prejudicially, the permission of the temporary commanding officer must be taken as giving a sanction which prevents the penalty for desertion from attaching. Appeal from a decree of the district court. This was a libel in rem by Patrick Doherty, a seaman on board of the brig Caroline E. Kelly, against that vessel, to recover arrears of wages, and also three months' extra wages, two-thirds thereof to be paid to himself and the other third to remain for the use of the United States, under the act of February 28, 1803, section 2, which provides that whenever a ship or vessel belonging to a citizen of the United States, shall be sold in a foreign country, and her company discharged, or when a seaman or mariner, a citizen of the United States, shall, with his own consent, be discharged in a foreign country, it shall be the duty of the master or commander to produce to the consul, vice-consul, commercial agent, or vice-commercial agent, the list of his |