pany incorporated under the laws of this State, owning a water-power created by a dam across such a river in this State, who may desire to increase the use of its water-power in propelling machinery by an extension of its main race to a greater length, may enter upon any lands (being responsible for all damages that may accrue by such entry), for the purpose of examining and surveying the ground such company may desire for such extension of said race, and grounds upon which to use such water-power for the purposes aforesaid, in all not exceeding five acres; and such company is hereby authorized to appropriate such land for the purposes aforesaid, by complying with the provisions of this Act.

3705. What companies may consolidate. 1. Any hydraulic company now or hereafter organized by virtue of the laws of this State is hereby authorized and empowered to consolidate with any other hydraulic company now or hereafter organized either in this or any adjoining State, in any case where the hydraulic works of such companies, so consolidating, form a continuous line. And the said corporation thus formed shall have power to hold, enjoy, and exercise, within this or any State in which the hydraulic works are situate, all the faculties, powers, rights, franchises, and immunities now held by hydraulic companies in this State and any State in which said works, or any part thereof, are situate, and such others as may be conferred upon them, by any law of this State or of any other State in which any portion of its hydraulic works may be situate; and to hold meetings of stockholders and of its boards of directors, and to do all corporate acts and things in any State in which said hydraulic works are situate, and along the ine thereof, as validly and to the same extent as it may do the same within this State; and to make by-laws, rules, and regulations, in relation to its business and the number of its directors, and the times and places of holding meetings of stockholders and directors, and the same to alter and change as may be deemed expedient.

3706. Name. 2. The companies so consolidating may adopt such name as may be agreed upon by them.

3707. How consolidation effected-Evidence. 3. Such consolidation may be made by agreement between the directors of the companies so consolidating, when ratified by the holders of two-thirds of the stock of such companies; and the terms of the consolidation, with certificate of the president and secretary of the respective companies, certifying the agreement and its ratification, shall be filed for record in the Recorders' offices of the respective counties in which such hydraulic works are situate; and such consolidation shall take effect from the time of such filing; and a certified copy of such certificate, given by the Recorder of any county where filed, shall, in all Courts and places, be competent evidence of the facts therein stated.

[1 R. S. 1852, p. 331. In force May 6, 1853.]

3708. Commissioners-Notice. 1. When any number of persons, not less than nine, shall associate themselves together for the purpose of organizing an insurance company, they shall designate three persons to act as commissioners, to superintend and receive subscriptions to the capitalstock of such company; and such commissioners shall first give twenty-one days' notice in one or more newspapers published in the counties where the subscription-books are proposed to be opened, stating therein the time and place or places of receiving such subscriptions.

3709. Amount of stock-Shares. 2. The capital-stock of any insurance company organized under this act shall not be less than one hundred thousand (100,000) dollars, in shares not exceeding fifty (50) dollars each. But such capital stock may be increased by a vote of two-thirds of the directors: Provided, That any such company may be organized under the provisions of this act with a capital stock of not less than fifty thousand (50,000) dollars, but shall be limited to insuring any person against bodily infirmity, disablement and death resulting from casualty or accident, and providing benefits for disability caused by disease, until the capital stock is increased to one hundred thousand (100,000) dollars, when such company may also do insurance generally as provided in this [As amended, 1901 S., p. 617. Approved March 15, 1901.]

act.

3710. Subscriptions. 3. The commissioners shall attend at the time and place or places specified in such notice, and open books for subscription of stock; and any person, company, or corporation may subscribe the same, and shall pay, at the time of such subscription, two dollars on each share. The books may be closed when the whole of the capital stock is subscribed, but not otherwise; and when a board of directors is elected as hereinafter provided said commissioners shall deliver to such board the books and money paid in upon subscriptions as aforesaid.

3711. Directors - Term. 4. The business of every such company shall be managed and conducted by not less than seven nor more

than

thirteen directors, who shall also be stockholders, one of whom shall be president of the company; and they shall hold their offices for one year and until others are chosen and qualified in their stead.

3712. Secretary Duties. 5. Such company shall elect annually, or oftener, a secretary, who shall be the clerk of the company, and shall be sworn to the faithful discharge of his duty; and he shall, in addition to his other official duties, keep a true record of all the votes of the stockholders and of the directors, and a true list of the stockholders and the number of shares held by each one, and shall make proper entries of every transfer of shares in a book to be by him kept for that purpose.

3713. Directors, when and how chosen. 6. The directors shall be chosen by the stockholders once in each year, at such time and place and in such manner as shall be provided in the by-laws of the company. All elections shall be by ballot; absent stockholders may vote by proxy, authorized in writing. Twenty days' notice shall be given of all elections and of annual or special meetings. 3714. President and vice-president. 7. The directors shall choose from their number one person to be president and one to be vice-president, who shall be sworn to perform faithfully the duties of their respective offices, and every vacancy in the offices of president, vice-president, or director that may occur shall be filled by a new election, as hereinbefore prescribed.

3715. Special meetings. 8. Special meetings shall be called by the secretary or clerk of the company, upon the written application of the owners of one-fifth of the capital stock, to be held at such time and place as he shall direct, for the purposes set forth in such application.

3716. Quorum Majority vote. 9. A majority of the directors shall constitute a quorum to do business; and all questions, unless otherwise provided, shall be decided by a majority vote of those present.

3717. Corporate name - Duration. 10. All persons who are stockholders in any such insurance company are hereby constituted and declared a body politic and corporate, by such name and style as the company may adopt, to continue thirty years from and after the organization of the same.

3718. As to real estate. 11. Such company may acquire and hold real estate necessary for the transaction of its business, and may take and hold real estate or securities, mortgaged or pledged for the payment of any debt due or becoming due; and also purchase real estate on sales made by virtue of any judgment or decree of any court in any cause to which said company is a party; and may take and receive real estate in payment or in part satisfaction of any debt previously contracted or due; but all real estate other than that retained for the transaction of its business, shall be sold within five years from date of purchase. [As amended, 1897 S., p. 276. In force March 8, 1897.

3718a. Assets Investment. 2. The assets of such company

shall be invested as follows:

First. In bonds of some one or more of the States of this Union, or of the United States, or bonds of a city or county authorized to be issued by the Legislature of the State where located; all of such bonds to be of a market value not below par.

Second. In bonds and mortgages upon unincumbered real estate, the market value of which real estate is at least double the amount loaned thereon, and the interest thereon not in default more than six months; and the value of such real estate shall be determined by a valuation made under oath by two freeholders of the county where the real estate is located, and may hold real estate as provided in the next succeeding section of this act.

Third. In loans upon the pledge of such stock, bonds or mortgages, of par value, if the current market value of such stock, bonds or mortgages is at least twenty-five per cent more than the amount loaned thereon. [1897 S., 276. In force March 8, 1897, and supplementary to 3718.

3719. Stock.

12. The capital stock of such company shall be paid in within eighteen months from the time of its subscription, in such sums as the directors may require; and such stock shall be transferable and assignable on the books of the company, in such manner as the by-laws may prescribe.

3720. Auditor of State to give statement. 13. Whenever the president and directors, or a majority of them, shall certify, under oath, before an officer entitled to administer the same, that one-half of the capitalstock is actually paid in, and a moiety of said half has been invested in solvent stocks, and shall produce the subscription books, verified by the oath of the commissioners superintending such subscriptions, the Auditor of State, upon inspection of such books, certificate, and stock securities, and all other matters connected therewith, if satisfied that the requirements of this Act have been complied with, upon the deposit of the stock securities aforesaid in his office, shall give a certified statement, directed to the Secretary of State, setting forth the name of the company, the amount of its capital-stock, the amount and description of its stock securities, and the principal place of business of such company. 3721. Certificate of incorporation. 14. Such statement shall be filed in the office of the Secretary of State, and that officer shall give to such company, or authorized agent thereof, a certificate of incorporation, under his seal of office, declaring the corporate name of such company, the amount of its capital-stock and of securities deposited, and shall authorize such company, from and after the date thereof, to issue policies of insurance, according to the true intent and meaning of this Act; and such certificate shall be conclusive evidence of the validity of its organization.

3722. Fees of Auditor and Secretary of State. 15. The Auditor shall be entitled to five dollars for the examination and statement, and the Secretary to two dollars for the certificate of incorporation; which shall be paid by the company.

3723. Auditor's duty. 16. The stocks thus deposited shall remain in the office of the Auditor of State, who is hereby charged with the custody. of the same; and he shall, upon the application of the company entitled thereto, give powers of attorney to receive the interest or dividends of such securities when due or made, except as hereinafter provided. The company holding the same may withdraw a portion of such stocks, upon substituting other securities of like class or nature, with the consent of the Auditor.

3724. Guaranty-fund, how applied. 17. Such securities shall constitute a guaranty-fund, which shall be for the benefit of the insured in such company; and the proceeds of the sale thereof shall be applied as herein named, and in the following order, and for no other purpose whatever:

First. To the payment of losses incurred by the assured under any policy made by such company.

Second. The payment of laborers, artificers, and other persons in the employ of such company.

Third. The payment of the trusts held and reduced to possession by such company.

Fourth. The payment of all other debts and liabilities owing from such company.

But the proceeds of such securities shall, in all cases, be applied ratably to the class first in order, and the remainder, if any, to the other classes in their succession as herein defined, and not otherwise.

3725. Increase of guaranty-fund. 18. Such company shall (before any dividends declared upon the capital-stock thereof are paid over to the holders of the same) retain five per cent. on all dividends, and within six

months thereafter shall cause the same, thus retained, to be invested in solvent stocks, as heretofore provided, and deposit them with the Auditor of State. Such stocks shall be added to and constitute a part of the guarantyfund, but shall not be considered any portion of the capital-stock of such

company.

3726. Depreciations. 19. Whenever any of the stocks thus deposited have, in the estimation of the Auditor of State, fallen below the value at which they were received, such officer shall give notice to the company making such deposit of such depreciation, and require the said company, within sixty days from the date thereof, to deposit other stock securities to an amount equal to such depreciation or deficiency.

3727. What may be insured. 20. Every such company may take [make] insurance upon vessels, freight, money, goods and effects, on the life or health of any person, or on money lent upon bottomry or respondentia; and they may also make insurance against loss by fire, lightning, explosion or tornado, to any dwelling house or any other building, or the rent therefor, merchandise or other property within the United States or territories or the British possessions in North America. [As amended, 1897 S., p. 277. In force March 8, 1897.

3728. Policies-Losses. 21. All policies of insurance made by such company shall be subscribed by the president, or, if he be dead or unable from any cause, then by the vice president, and countersigned by the secretary thereof. All losses arising under any policies so executed shall be adjusted and settled by the president and board of directors.

1. The policy should be signed by the president and countersigned by the secretary. -Peoria, etc., Co. v. Walser, 22 Ind. 73. But an insurance company may make a valid contract of insurance by parol.-N. E. Ins. Co. v. Robinson, 25 Ind. 536; Am. Ins. Co. v. Patterson, 28 id. 17. An unexecuted policy will not support an action, but suit will lie upon a valid agreement to insure and issue a policy.-- Peoria, etc., Ins. Co. v. Walser, 22 Ind. 73; Barr v. Ins. Co., 61 id. 488. As to stipulations, warranties, and proof of notice of loss, see Commonwealth Ins. Co. v. Monninger, 18 Ind. 352. As to the distinction between a void and voidable policy at the option of the insurer, see Am. Ins. Co. v. Henley, 60 Ind. 515; Citizens' Ins. Co. v. Short, 62 id. 316. As to warranty, over-valuation, and reformation, see Cox v. Ætna Ins. Co., 29 Ind. 586. As to the construction of an open-running policy of marine insurance, see Mark v. Ætna Ins. Co., 29 Ind. 390; and for the construction of a marine policy as to extra freight and expenses of recovering and forwarding cargo, see Ind. Ins. Co. v. Mason, 11 Ind. 171. For a definition of the term "merchandise" in a fire policy, see Kent v. Liverpool, etc., Co., 26 Ind. 294. As to cancellation, see King v. Enterprise Ins. Co., 45 Ind. 43.

2. As to ratification and waiver, see United, etc., Co., v. Ins. Co., 42 Ind. 588; Home Ins. Co. v. Duke, 43 id. 418; Franklin Ins. Co. v. Sefton, 53 id. 380; Behler v. German, etc., Co., 68 id. 347. As to conditions and the requisites of a custom, see Etna Ins. Co. v. Meyers, 63 Ind. 238; Franklin Ins. Co. v. Humphrey, 65 id. 549. As to assignment of the policy, see Franklin Ins. Co. v. Hazzard, 41 Ind. 116; Am. Ins. Co. v. Gallagher, 50 id. 209. As to transfer of the property insured, see Ind., etc., Co. v. Conner, 5 Ind. 170; Hartford Ins. Co. v. Ross, 23 id. 179. As to notice, see Provident Co. v. Baum, 29 Ind. 236; Railway Assurance Co. v. Burwell, 44 id. 460. As to declaration of the agent after the transaction, see Union, etc., Co. v. Thomas, 46 Ind. 44: Mutual Benefit Co. v. Cannon, 48 id. 264.

3. Policies of insurance are liberally construed in favor of the insured.-- Ky. Mutual Co. v. Jenks, 5 Ind. 96. Courts will look at the substance of contracts of insurance, and will not permit corporations, under the pretext of cunningly-devised stipulations, which tend to render nugatory the ostensible object of the contract, to evade any just responsibility incurred.- Indianapolis Ins. Co. v. Conner, 5 Ind. 170.

4. As to what the complaint on a policy should contain, see Aurora Ins. Co. v. Johnson, 46 Ind. 315. As to parties, pleadings, and construction, see Mutual Benefit Ins. Co. v. Cannon, 48 Ind. 264; N. W. Ins. Co. v. Little, 56 id. 504; John Hancock Ins. Co. v. Daly, 65 id. 6; Pence v. Makepeace, id. 345; Ætna Ins. Co. v. Baker, 71 id. 102.