Smith et al. v. Hall. Third. That the note was one within the 12th section of the Company's charter, and therefore that a valid transfer could be made without a previous resolution of the Board, and cited 1 Sand. S. C. R., 629; 2 id., 180; 5 id., 591; 3 Comst., 290. G. Dean, for respondent. The indorsement was restrictive, and passed no title to the note. (8 Barn. & Cress., 622; 5 Mass., 543.) This corporation is subject to the provisions of the Revised Statutes, to prevent the insolvency of moneyed corporations. (See its charter, § 22, and 5 Seld., 589.) The transfer in ques tion is directly prohibited by 1 Revised Statutes, 591, § 8. (3 Kern., 116.) The plaintiffs took with notice, and are not holders for value; and the transfer being prohibited by law, they cannot recover. (3 Kent's Com., 80; 16 N. Y. R., 129; 7 Barn. & Cress., 278; 6 Mann. & Grang., 766; 16 N. Y. R., 330.) BY THE COURT-BOSWORTH, Ch. J. The note in question is proved to have been made upon consideration. Even if the note of $150, maturing June 8, 1856, has been paid, there are $86.72 due on this note. No set-off has been proved, or attempted to be. The Company actually owed the plaintiffs the amount of the notes transferred on the 15th of January, 1856, for money loaned to it. There is not a particle of evidence that the note, was transferred when the Company was insolvent, or contemplated insolvency, unless the mere fact that it stopped payment on the 5th of March, 1856, furnishes some evidence to that effect. The terms of the indorsement do not alone present any obstacle to the plaintiffs' recovery. A collection of the note, or payment of it to the plaintiffs, to reimburse them the moneys they have loaned to the Company, would be a collection or payment for the purposes designedy the indorsement and transfer of it to the plaintiffs. (Lloyd v. Sigourney. 3 Youngs & Jervis, 220; Nelson et al. v. Wellington, July, 1859, Superior Court.') Ante, page 178. Smith et al. v. Hall. The Secretary is the officer of the Company who, frequently, if not usually, indorsed its notes on a negotiation of them by the Company. The only important question is, whether the fact that there was no resolution authorizing the transfer can be set up as a defense to this action? It is objected, first, that such a defense is not admissible under the pleadings. The answer not only denies that the Atlas Insurance Company indorsed the note to the plaintiffs, but avers that it was transferred to them by some officer or officers of the Company when it was insolvent, with intent to give to the plaintiffs a preference over other creditors of the Company contrary to the statute. These allegations are to the effect, in substance, that the transfer was an unauthorized act of some officer or officers of the Company, and sufficiently import that it was not authorized in any manner by the Board of Trustees, and consequently not by any resolution passed by it. The allegation in the complaint, that the Company indorsed the note to the plaintiffs, being denied by the answer, it is essential to prove, in order to establish this allegation, that the making of the indorsement was authorized by law and the charter and by-laws of the Company. The word indorsed, as here used, imports a delivery of the note, as well as an authorized writing of the payee's name on the back of it. (Griswold v. Laverty, 3 Duer, 690.) It follows that if 1 Revised Statutes, 591, § 8, applies to such a transaction, then it is essential to the plaintiffs' title that it should appear, either directly or presumptively, that the transfer was authorized by a previous resolution. We think that there is no obstacle presented by the pleadings to the interposition of this defense. Is the absence of a previous resolution of the Board of Trustees authorizing the transfer, a bar to this action? Howland v. Meyer, (3 Comst., 290-293,) presented the case of a note within the 12th section of the act of incorporation, and the President of the Company was authorized by its by-laws "to transact all its ordinary business, and to perform whatever belongs to the executive department." The note in suit is not one within the provisions of the 12th section, and the Secretary who transferred it is not shown to have Smith et al. v. Hall. been authorized by the by-laws of the Atlas Mutual Insurance Company to transact its ordinary business. There was not, therefore, in the present case, even such a previous resolution of the Board authorizing the transfer as would be implied by a preëxisting by-law authorizing the Secretary of the Company to transact its ordinary business. The article of the Revised Statutes to prevent the insolvency of moneyed corporations, (1 R. S., 589,) is, by the statute itself, made applicable to corporations "authorized by law to make insurances." (Id., 598, §54,) [sec. 51.] Even conceding that, where any charter granted subsequent to the passage of these statutes contains a section or sections in conflict with these provisions of the statutes, the general statute must yield to such sections in a subsequent act; yet, as the note in question is not one provided for by the 12th section of the Company's charter, that section does not exempt this transfer from the operation of section 8 of 1 Revised Statutes, 591. (Laws of 1843, 67-69, § 8, and Laws of 1842, 261, 263, § 12.) Notwithstanding the opinion of GARDINER, J., in Howland v. Meyer, that notes given under the 12th section might be transferred by the Company to a creditor as security for his claim, he giving time until such notes matured, and notwithstanding he reaffirmed that proposition in his dissenting opinion in Brouwer v. Harbeck, (5 Seld., 596,) yet it is evident that the former case presented no such question; and the latter case holds, in effect, that the article of the Revised Statutes, before cited, applies to the assets of such an Insurance Company as the Atlas Mutual Insurance Company, excepting notes made under the 12th section of their charter. The present plaintiffs are not purchasers for a valuable consideration without notice. The transfer was made to secure a precedent debt, and Mr. Boynton, one of the plaintiffs, was a Trustee of the Company when the transfer was made, and had been from the organization of the Company. He signed the receipt given on the transfer of the notes to the plaintiffs. They are not protected by the exception made by the last clause of section 8, 1 Revised Statutes, 591. (Gillet, Receiver, v. Phillips, 3 Kern., 114-117.) They knew the transfer was not authorized by a previous resolution, and that the note was not given under Houghton v. Dodge et al. the 12th section, and they took it as security for a precedent debt. We think the transfer was prohibited by law and was illegal, and that the plaintiffs acquired no title to the note, and that payment of it to them, with knowledge of all the facts, would not protect the defendant against a subsequent action by the receiver brought to recover the amount of the note. The judgment should be affirmed. Judgment affirmed. AMORY HOUGHTON, Plaintiff and Appellant, v. WILLIAM M. DODGE and CHARLES B. KNUDSON, Defendants and Respond ents. 1. Where property of a moneyed corporation (viz.: a note made by third persons) is wrongfully taken by one of its officers, and all its claims against such officer, including its claim for the taking of such note, are subsequently settled, and a release given to such officer on taking his note for a balance agreed upon; although the persons acting in behalf of the Company in making the settlement and giving the release acted without competent authority to bind it, yet if the Company thereafter, with knowledge of such settlement and of its terms, indorses absolutely and appropriates to its own use the note received on such settlement, it thereby ratifies the settlement and vests in such officer title to the note so wrongfully taken, and he or his vendee can maintain an action on it against the makers. 2. When the proof is, that "the Company used the note" taken on such settlement, and "paid it to" a creditor "in payment of a debt which they owed to" such creditor, and there is no other evidence in respect to such transfer; the presumption is, that such transfer was made in a manner authorized by law and the charter and by-laws of the Company. 3. The owner of a promissory note can maintain an action on it, under the Code, in his own name against the makers, although not so indorsed that he can sue as indorsee by the rules of the common law. (Before BosWORTH, Ch. J., and WOODRUFF and MONCRIEF, J. J.) Heard, June 16th; decided, November 5th, 1859. THIS is an appeal by the plaintiff from a judgment dismissing his complaint. The action was tried before Mr. Justice BosWORTH and a jury in May, 1858. The complaint states that on or about the 21st of August, 1855, the defendants made their note of that date for $1,000, Houghton v. Dodge et al. payable twelve months after its date to the International Insurance Company or order, at the Irving Bank, and delivered it to the Company; that the Company indorsed it in blank before maturity and transferred it for a valuable consideration; that the plaintiff afterwards became and now is the holder and owner of it; that it is past due and unpaid; and prays judgment for its amount with interest from the 23d of August, 1856. The defendants admit, in their answer, the making of the note, and say on information and belief that there was not then, and has not been since then, such an incorporation; and they also say that the Company never indorsed the note in blank, nor transferred it for a valuable consideration. They put in issue the allegations of the plaintiff's ownership, and aver that he had no interest or property in it when it fell due, and that if he has any interest in it, he acquired it since its maturity. They set up as a third defense that the note was taken from Baid Company "by the unauthorized act of one of the officers thereof, who converted the same to his own use, and that the property therein has never passed to the plaintiff or to any other person." "Fourth. And these defendants for further and separate answer say, that they have a defense by way of set-off to the said note, as against the International Insurance Company, for money due to them, amounting to $357 with interest, which amount they claim as a set-off against said note in this action." The note in suit was produced at the trial, and (including the indorsements on it) reads thus, viz.: "$1,000. NEW YORK, August 21st, 1855. "Twelve months after date we promise to pay the International Insurance Company or order, for value received, one thousand dollars. Payable at Irving Bank. (Signed) (Indorsed.) "International Insurance Co. "DODGE & Co." "By WM. E. ROLLO, Sec'ty. "P. J. AVERY, Pt." The handwriting of Rollo, and that he was Secretary of the Company from its organization to January 17, 1856, and the |