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and there was then indorsed on each the following words: “This policy returned for cancellation this 8th day of Nov., 1897, at 3 P. m." The defendant then paid the amount of the assessments, and he testifies that the son said "there might be some figuring as to the rebate, but he was pressed; wished I would let it go; father would settle that.” On the 18th day of November, 1897, said policies were canceled pursuant to statute and said by-laws, and the secretary of the company wrote across each of said policies, “Canceled Nov. 18, 1897," and signed such statement as such secretary as follows: "C. W. Pearl, Secretary.” The defendant paid all assessments against him to and including the said 18th day of November, 1897. On the 17th day of November, 1897, one Wilson, a policy holder of said company, suffered a loss by fire. On the 13th day of January, 1898, said company caused an assessment to be made for the amount of the Wilson loss, and also a loss to one White, the date of which does not appear. The defendant was included among the persons so assessed. The secretary of the company notified the defendant of the amount assessed to him. The assessment not being paid, on the 12th day of November, 1898, the attorney of the plaintiff wrote a letter to the defendant as follows:

"I have a claim against you for collection in favor of the Patrons of Industry Fire Insurance Company of Franklin County, New York. The company, as you know, has quit issuing policies, and some may think it a hardship to pay; but it is in condition to enforce payment, and, if suit is brought, 50 % is added. I do not desire to bring an action against you, but will be obliged to do it if the account is not paid. They direct me to push it. The amount against you personally is $5.86; as administrator, etc., $13.35. Interest on both from February 13th, 1898."

Thereafter the defendant called on the attorney for the plaintiff and told him that he wanted a receipt that would clear him from further annoyance from the company, and paid him the amount of the assessment, with interest, and the attorney gave him a receipt in full therefor. The material part of the assessment of January 13, 1898, is as follows: Loss of Bro. Edward S. White.

$ 100 00 Loss of Bro. T. R. Wilson...

1,189 00 And expense of company.

Your assessment on policy No. 246, on $850.00, is.
Cancellation fee

5 95


The amount of return premium to the credit of said policy is.....



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$ 15 35 The amount of return premium to the credit of said policy is..... 2 00 Balance due......

$ 13 35 There is no evidence of any unpaid expenses existing against the company at the time the defendant's policies were canceled. Only


and 106 New York State Reporter part of the persons included in the assessment of the 13th of January, 1898, paid their assessments. Expenses were incurred after January 13, 1898, and, although the assessment was for the purpose of paying losses, the officers of the company paid from the amount collected from said assessment the expenses incurred after the date of said assessment; and the balance so collected was paid first to said White, and next to said Wilson, leaving unpaid to Wilson between six and seven hundred dollars. Subsequently Wilson sued the plaintiff for the amount remaining unpaid to him, and obtained judgment against the plaintiff for the sum of $694.02. Subsequently a payment was made thereon, leaving due to him about the sum of $500, and said company on the 25th day of November, 1899, made an assessment “to pay judgment against company in favor of Thaddeus R. Wilson of about $700 for loss by fire, attorney's fees, and expense of collecting assessments and closing up the affairs of the company." The defendant was included in this assessment. He refused to pay the amount so assessed against him, and this action was brought to recover the aniount of such assessment.

Section 267 of the insurance law provides: “Every person insured in and by any such corporation shall give his undertaking in such forin as the corporation may prescribe to pay his pro rata share to the corporation of all losses or damages sustained by any member thereof.

He shall also pay such reasonable sum for policies and expenses and within such time as may be required by the bylaws. Section 268 of said law provides:

If the directors or executive committee deem it to be for the interests of the corporation, they may make an estimate of such sums as in their judgment will be necessary to pay all losses, damages, and expenses for the current year

and proceed to assess, levy, and collect the same of the members of the corporation.

Section 274 of said law provides :

“Any member of any such corporation may withdraw therefrom at any time by ten days' notice in writing to the secretary and paying his share of all claims existing against the corporation and surrendering his policy or policies.

The by-laws of the corporation provide:

"Art. 6. Each member of said company shall pay a pro rata share to said company within thirty days after being notified of the same by the secretary of such loss or damage, and the amount to be paid, caused by fire or lightning sustained by any member thereof upon the property insured by said company, and of the expenses of the company, in such manner and at such times as the directors shall order.

"Art. 17. Any member of this company may withdraw at any time by paying his share of any and all amounts existing against said company and of the expenses of said company to date of withdrawal, by giving ten days' notice in writing to the secretary and surrendering his policy or policies.

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The defendant, in making application to the company for the policies held by him, signed a writing in and by which he covenanted and agreed to pay his just and equitable proportion of all assessments made according to the by-laws of said association for the payment of losses by fire or lightning, and conducting the business of

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said association. Every person, upon signing an application for insurance and becoming insured in said company, thereby becomes a member thereof. On surrendering his policy or policies he with draws from the company and ceases to be a member thereof. The payment by a member to the company of his share of all claims existing against the company is a condition precedent to his right to have his policy or policies canceled, and to his withdrawal as a member of the company. When a member of the company makes application to withdraw therefrom, it is necessary that there should be a settlement and adjustment between the company and such retiring member. The share of the member in all claims against the company, whether for loss or damage by fire or for accrued expenses, is a matter of computation. Assuming that such member is liable for prospective expenses of collecting an assessment for existing claims, a reasonable amount could be added therefor. Sands v. Boutwell, 26 N. Y. 233. The statute only provides for assessing members. When a settlement and adjustment is in good faith made between the company and a member, and his policy or policies are canceled, he not only ceases to be a member of the company, but cannot be again assessed as such, nor compelled to pay any further claim for losses or expenses, unless the settlement and adjustment is set aside for fraud or mutual mistake. Hyde v. Lynde, 4 N. Y. 387, was an action on a deposit note given contemporaneously with a policy of insurance by a mutual insurance company. Before the expiration of the term of the policy the insured sold the property, and thereupon surrendered his policy, and the secretary of the company canceled and surrendered the deposit note. Suit was brought on an assessment which included defendant for losses which happened between the making and giving up of the note in question, and which at the time the note was given up was being contested by the company. The court say:

"Whether any losses or expenses have accrued prior to that time which bave not been satisfied, and which the company has not got funds in hand to satisfy, and how much, if anything, ought to be paid by the person insured, are matters to be adjusted between him and the company before the note is given up. When the parties have come to an agreement, and the policy and the note have been surrendered, the individual ceases to be a member of the company, and all right to make assessments or calls upon him or upon the note is at an end. The settlement and surrender of securi. ties are acts authorized by law, and, like other lawful acts, they are binding upon both parties unless they can be impeached on the ground of fraud or mistake."

In Campbell v. Adams, 38 Barb. 132 (subsequently reversed on another point), which was an assessment made upon a premium note where the policy had been surrendered, the court say:

"The surrender of the policy by the defendant and its cancellation by the company dissolved the defendant's relation as a member of the company, and neither they nor their receiver had any further claim upon them, era cept for the unpaid balance of the assessment of December 3, 1855. (Mistake in amount paid.) The note was part and parcel of the contract of insurance, and, with the policy, constituted the whole of the transaction. One part could not be canceled, and the other remain in full force, without the consent of both parties."

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and 106 New York State Reporter
In Huntley v. Beecher, 30 Barb. 580, referring with approval to the
case of Hyde v. Lynde, supra, the court say:

"The insured had aliened the insured property and had surrendered his policy, which had been accepted by the company, and the note was canceled and surrendered. It was held that he was no longer liable upon his pote for losses, though they happened prior to the surrender of the policy, etc., in the absence of all fraud."

In Mills v. Stewart, 62 Barb. 458, the case of Hyde v. Lynde, supra, is referred to in confirmation of the statement, "yet it will not be pretended that a compromise made in good faith is not binding as well upon creditors as stockholders.” The decision to the contrary in Sands v. Hill, 42 Barb. 651, was reversed in the court of appeals (see statement on page 19 of 55 N. Y.), and on the second trial the agreement canceling the note, even after a petition for the dissolution of the corporation had been filed, was held binding upon the company, and that the note was thereby discharged. The evidence herein clearly shows a full settlement and adjustment between the parties hereto, and, in the absence of any claim or proof of fraud or mistake, the verdict in favor of the defendant was right.

Judgment affirmed, with costs. All concur.

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LE VALLEY et al. v. OVERACKER et al. (Supreme Court, Appellate Division, Third Department. September 4, 1901.) 1. PRINCIPAL AND AGENT-AGENT'S AUTHORITY-EVIDENCE.

In an action to foreclose a mechanic's lien for work and materials on a house alleged to belong to defendant, and which were furnished at the request of G., an alleged agent of defendant, the defendant testified that G. was not her agent, but that she had contracted with him for the entire erection of the house, and a written contract to that effect was produced. T., who was the defendant's agent, stated that he had never employed G. as agent for the defendant, and G. hiinself testified that he built the house on contract, and that he was not the de. fendant's agent. G. had negotiated for defendant in the purchase of the lot whereon the house was built. Held insufficient to show that G.

was the defendant's agent. 2 SAME-STATEMENTS OF AGENT.

Where, in an action to foreclose a mechanic', llen for materials and services furnished at the request of the defendant's alleged agent, tbere was no evidence of the alleged agent's authority, it was error to admit

evidence of statements made by him as to his agency. Appeal from Chemung county court.

Action by Fred Le Valley and others against Johanna H. Overacker and another. From a judgment in favor of plaintiffs, defendant Johanna H. Overacker appeals. Reversed.

On the 11th day of May, 1897, the appellant purchased of one John Bridgeman a lot at the corner of Washington avenue and Hoffman street in the city of Elmira. During the year 1897 a house was built on said lot. George W. MacCallum, a contractor and a son of appellant's stepfather, Thomas MacCallum, did the work, either under a contract with the appellant or as agent for her. The plaintiffs are co-partners doing business in Elmira as plumbers and gas fitters, under the firm name of Le Valley, McLeod & Co. At the request of said George W. MacCallum the plaintiffs performed work in said house and furnished material therefor. On the

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6th day of May, 1898, there being a balance of $185 remaining unpaid to
them on account of said work and materials, the plaintiffs duly filed a
mechanic's lien in the clerk's office of the county of Chemung against
said property and against said Johanna H. Overacker as the owner thereof.
The said lien states: “The name of the owner of the real property against
whose interest therein the lien is claimed is Johanna H. Overacker, and the
interest of the said owner, as far as known to these lienors, is that she has
title in fee to said premises. The name of the person by whom these
lienors were employed is George W. MacCallum, who was acting as the
agent for Johanna Overacker, the owner of the said real estate, and the
said labor, services, and material were furnished with her full knowledge
and consent, and under her authority.” This action was commenced to fore-
close said lien, said George W. MacCallum being joined with the appellant
as a defendant, the complaint alleging that he is a tenant residing on said

Argued before PARKER, P. J., and SMITH, KELLOGG, ED-

J. John Hassett, for appellant.
George McCann, for respondents.


CHASE, J. It was necessary foi the plaintiffs to establish by competent evidence that George W. MacCallum was the agent of the defendant Overacker in making the contract with them. For the purpose of establishing their case and of showing that MacCallum was the agent of Mrs. Overacker, the plaintiffs called Mrs. Overacker as their first witness, and she was examined by them. Her memory was very poor and she showed a surprising ignorance regarding all matters concerning the property in controversy. Nevertheless she testified positively that George W. MacCallum was not and never had been her agent, and that the house was built by MacCallum under a written contract with her, at a specified price, and that she had paid him in full therefor. On the cross-examination she produced a written contract between herself and said MacCallum by which he agreed to build the house for her according to plans and specifications agreed upon for the sum of $1,850, payable as the work progressed. This contract was signed by her and by MacCallum; and she says that according to her recollection it was signed not very long before the work was commenced. In the absence of other evidence the presumption is that the contract was made on the day that it bears date. Mrs. Overacker testified that her stepfather, Thomas MacCallum, was her agent, and that for several years he had done all of her business, and that he had charge of all matters relating to the purchase of the lot, the obtaining of a loan for her thereon, and for the construction of the house on said lot. She says she left everything to him, and did not know much about it after he took it in hand. Thomas MacCallum testified that he never employed George W. MacCallum as agent for Mrs. Overacker, and that he was present when the contract for the building of the house was signed by them. George W. MacCallum testified that he was not the agent of Mrs. Overacker, but that he built the house on his own responsibility, in pur. suance of the contract in evidence, and that he had been paid in full therefor. The only evidence received on the trial other than

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