21h 35 L-ed 61 381 667 Union Insurance Co. v. Hoge. must not be understood that a master can abandon his ship and cargo upon any such grounds as are proved by the evidence in this case, or, indeed, upon any other, so far as the goods are concerned, when it is practicable for human exertions, skill, and prudence, to save them from the impending peril. This view of the evidence renders it unnecessary to consider the other grounds of defense set up by the respondents. The decrees, therefore, of the district court in the respective cases are affirmed with costs, in each case for the libelants. THE UNION INSURANCE COMPANY, Plaintiffs in Error, v. JOHN B. HOGE. 1. Under the general insurance act of the State of New York of April 10, 1849, a mutual insurance company could, in its articles of incorporation, provide for insurance by premiums paid in advance, and the policy would be valid. 2. The practical construction of the act by the attorney general of the State and other officers required to act under it, though not conclusive, should have weight where the interpretation is doubtful. THIS is a writ of error to the circuit court for the northern district of New York. The case is sufficiently stated in the opinion. Mr. Van Der Lyn, for plaintiff in error. Mr. Mygatt, for defendant. [ *60 ] *Mr. Justice NELSON delivered the opinion of the court. This is a writ of error to the circuit court of the United States for the northern district of New York. The suit was brought against the defendants on a policy of insurance against fire, in the sum of $2,500, upon a paper mill, machinery, and stock, of one R. K. Kounsler, of the State of Virginia, the property situate in that State. The defendants are incorporated under the laws of the State of New York, and the place of business at the village of Fort Plain, an interior town of that State. The policy and all interest under the same have been duly assigned to the plaintiff. There is no question in the case upon the loss, or upon the preliminary proofs; the defense being placed exclusively upon a defect of authority in the defendants to issue the policy. The act of the legislature of New York, passed April 10, 1849, under which they Union Insurance Co. v. Hoge. were incorporated, provided, section 1, that any number of persons, not less than thirteen, might associate and form an incor porated company, among other things to make insurance [* 61 ] on dwellings, houses, &c., against loss or damage by fire; section 3, that these persons should file in the office of the secretary of the State a declaration signed by them, expressing their intention to form a company for transacting the business of insurance, which declaration should comprise a copy of the charter proposed to be adopted by them, and requiring notice of their intention to be published in a newspaper a given number of weeks. Section 4 provides for opening books of subscription to the capital stock, and that in case the business of the company was to be conducted on the plan of mutual insurance, then to open books to receive propositions and enter into agreements in the manner afterwards specified; which in substance is, that the company shall not commence business until agreements shall have been entered into for insurance, the premiums on which shall amount to one hundred thousand dollars, and notes have been received in advance for the premiums on such risks, payable at the end of or within twelve months from date, which notes shall be considered a part of the capital stock, and shall be deemed valid, negotiable, and collectable, for the purpose of paying losses or otherwise. Section 11, that the charter of the company should be examined by the attorney general of the State, and if found in accordance with the requirements of the act, and not inconsistent with the constitution or laws of the State, he should certify the same to the comptroller of the State; and thereupon the comptroller should institute an examination to ascertain if the company had received, and had in its actual possession, the capital, premiums, &c., to the full extent required by the act; and upon a certificate to this effect by the comptroller, filed in the office of the secretary of state, this officer should furnish the company with a certified copy of the charter and certificates, which, upon being filed in the office of the clerk of the county in which the company is located, shall be its authority to commence business and issue policies. By section 10 it is made the duty of the corporators to declare in the charter the mode and manner in which the corporate powers conferred by the general act are to be exercised; and by section 12 the corporators, trustees, or directors, as the case * * may be, shall have power to make such by-laws, not [ 62 ] inconsistent with the constitution or laws of the State, as may be deemed necessary for the government of its officers and the conduct of its affairs. Union Insurance Co. v. Hoge. By the fifth section of the charter formed under this general act, it is provided that the rights, powers, &c., conferred by law on the company, shall be vested in and exercised by a board of directors, to consist of thirteen persons, to be elected by persons holding the policies of insurance in the company or their proxies, and one vote. shall be allowed on every one hundred dollars insured. The eighth section of the charter provides that the rates of insurance shall be fixed and regulated by the company; and premium notes therefor shall be received from the insured, and shall be paid at such time or times and in such sum or sums as the company shall from time to time require; and any person applying for insurance, so electing, may pay a cash premium, in addition to a premium note, or a definite sum in money, to be fixed by the company, in full of said insurance, and in lieu of a premium note. The policy in question was issued on the payment of a cash premium, under this eighth section of the charter, the insured paying a gross sum of fifty-six dollars and twenty-five cents for the insurance of his paper mill and stock to the amount of $2,500 for one year. The ground taken in the defense is, that, according to the general act under which the defendants were organized, they were empowered to make contracts and issue policies of insurance to such persons only as became members of the company by giving premium notes; and that the eighth section of the charter, providing for the payment of the premium in cash, was without authority, and the policy therefore void. It is stated in the plea upon which the question in the case is raised, that from the time the company began business (August, 1850) till June, 1853, when it became insolvent, over two thousand policies were issued, founded upon premium notes, and over two thousand five hundred founded upon cash premiums; and that the amount of forty-three thousand dollars was received by the company for policies issued upon cash premiums. [63] * 63 ] * The general act, conferring the power upon companies organized under it to make contracts of insurance against fire and issue policies, provides for a certain amount of capital, ($100,000.) secured by premium notes upon engagements of insurance entered into by the companies, as a condition to the right of commencing the business of insurance. This capital, thus obtained, is essential to a complete organization under the act; for, without it, the corporation is forbidden to enter upon the business of insurance. These preliminary engagements and the giving of premium notes Union Insurance Co. v. Hoge. were designed as an immediate security to persons who, confiding in the responsibility of the company, should make application for insurance on its going into operation. The notes thus constituting capital are to be made payable at or within a year from their date; they may be made payable, therefore, within the terms of the act, on demand, or at any short period; and they are made negotiable and collectable for the payment of any losses which may accrue in the business of insurance or otherwise. And it has been held in the court of appeals, in New York, that they are collectable by the company, irrespective of losses, or assessments to pay losses. (16 New York R. 310; 2 Smith R.) Now, although the general act provides for premium notes upon. these preliminary engagements of insurance to be consummated on the organization of the company, and with a view to capital upon which to begin the business of insurance, there is no provision to be found in it prescribing the mode or manner in which premiums shall be paid or secured after the company has become organized and commenced operations. That seems to have been left to be regulated in the charter formed under the act. * The provision prescribing the giving of notes in advance for premiums, with a view to create capital, has no necessary relation to the subject of premiums to be received by the company after its organization, and in the course of conducting its ordinary business. The act had in view a different object in requiring the giving these notes, and provided specially for their disposition and use. with reference thereto. They are made a part of the [64] capital stock of the company, and negotiable and collectable for the payment of losses or otherwise, and, as we have seen, collectable as such capital, irrespective of loss or assessment for losses; and as they may be made payable on demand, or at a short day, are convertible into money, according to the decision in the court of appeals of New York, immediately on the company's becoming organized and ready for business. Even if this provision could be regarded as bearing upon the subject of premiums after the organization of the company, it would furnish but feeble support to the argument against cash premiums, the difference being simply between cash and a note payable and collectable immediately. According to the act, and construction given to it in the case referred to, these notes have no necessary existence after the organization of the company. They may then be converted into money. They seem to have been made necessary under this system of insurance while the company Union Insurance Co. v. Hoge. was in the process of organization, by way of furnishing the incipient amount of capital required by the act. It is argued, however, that the company in question is a mutual insurance company, as declared by the act; that, according to this system, the insured must be a member of it, and that a person insured upon a cash premium, without any further liability, cannot be a member. This argument is not well founded, either upon principle or authority. Admitting that the insured must be a member of the company, he is made so by the payment of the cash premium. The theory of a mutual insurance company is, that the premiums paid by each member for the insurance of his property constitute a common fund, devoted to the payment of any losses that may occur. Now, the cash premium may as well represent the insured in the common fund as the premium note; and this class of companies has been so long engaged in the business of insurance, it may well be that they can determine, with sufficient certainty for all practical purposes, the just difference in the rates of premium between cash and notes. These mutual companies, possessing the authority contained in the eighth section [65]*of this charter, namely, to take cash premiums or premium notes, are, at the present day, in operation in several of the States, and it has never been supposed that the mutual principle has been thereby abrogated. (3 Ohio R. 348, N. S.) It has also been argued, that inasmuch as the defendants have been organized upon the principle of a mutual insurance company, its business must be conducted, as it respects the premiums to be received, according to the plan of mutual companies previously chartered in the State of New York. If the previous companies were required by their charters to receive premium notes, and not cash, then this requirement distinguishes them from the one before us. If their charters contained no such provision, then they were left, like the present one, to regulate the mode of payment at discretion. Besides, mutual companies upon both plans had been chartered by the legislature of New York previous to the act of 1849, and hence no inference can be drawn, as it respects the charters of previous companies, from the unexpressed intent of the legislature in this act, if otherwise admissible. The true answer, however, to this argument, we think, is, that in the absence of any reference to previous charters, by which the provisions of the same might have been incorporated in the present one, the court must look to the law itself for the purpose of expounding its provisions and ascertaining the intent of the legislature. The general act prescribed the outlines of the system, and all the |