Directors to make by-laws.

Common seal.

Restrictions on dividends.

Risks not matured.

amount of such note, shall be returned to the said Superintendent; and the corporators or officers of such company shall be required to certify, under oath, that the capital exhibited to those persons is bona fide property of the company. Such certificates shall be filed in the office of the said Superintendent, who shall thereupon deliver to such company a certified copy of the charter and of said certificates, which, on being filed in the office of the clerk of the county where the company is to be located, shall be their authority to commence business and issue policies; and such certified copy of the charter and of said certificates may be used in evidence for or against said company, with the same effect with the originals. [Laws of 1853, chap. 466, § 10.]

S 14. [Sec. 11.] The corporators, or the trustees or directors, as the case may be, of any company organized under this act, shall have power to make such by-laws, not inconsistent with the Constitution or laws of this State, as may be deemed necessary for the government of its officers and the conduct of its affairs, and the same, when necessary, to alter and amend; and they and their successors may have a common seal, and may change and alter the same at their pleasure. [Laws of 1853, chap. 466, § 11.]

S15. [Sec. 12.] It shall not be lawful for the directors, trustees or managers of any fire insurance company to make any dividend, except from the surplus profits arising from their business; and in estimating such profits there shall be reserved therefrom a sum equal to the whole amount of premiums on unexpired risks and policies, which are hereby declared to be unearned premiums, and also there shall be reserved all sums due the corporation on bonds and mortgages, bonds, stocks and book accounts, of which no part of

tions.

improperly

dividend.

the principal or the interest thereon has been paid during the last year, and for which forelosure or suit has not been commenced for collection, or which, after judgment obtained thereon, shall have remained more than two years unsatisfied, and on which interest shall not have been paid, and also there shall be reserved all interest due or accrued and remaining unpaid: pro- Reservavided, always, that any company may declare dividends not exceeding ten per cent on its capital stock, in any one year, that shall have accumulated and be in possession of a fund, in addition to the amount of its capital stock, and of such dividend, and all actual outstanding liabilities, equal to one-half of the amount of all premiums on risks not terminated at the time of making such dividend. Any dividend Penalty for made contrary to these provisions shall subject the declaring company making the same to a forfeiture of its charter, and each stockholder receiving it to a liability to the creditors of such company, to the extent of the dividend received, in addition to the other penalties and punishments in such case made and provided. This section shall not apply to the declaration of scrip dividends by participating companies; but no such scrip dividends shall be paid, except from surplus profits, after reserving all sums as above provided, including the whole amount of premiums on unexpired risks. [Laws of 1853, chap. 466, § 12, as amended by Laws of 1862, chap. 367, § 3; by Laws of 1864, chap. 563, § 2, and by Laws of 1865, chap, 199, § 1.] S 16. [Sec. 13.] All notes deposited with any mutual insurance company at the time of its organization, as provided in section six, shall remain as security Barb., for all losses and claims until the accumulation of 59% the profits, invested as required by the eighth section of this act, shall equal the amount of cash capital

Notes to security.

remain as

41 Barb., 151.

36 Barb.,

210.

25 Barb., 113.

21 Barb., 221.

25 How.,

Persons

88.

effecting insurance in mutual

required to be possessed by stock companies organized under this act, the liability of each note decreasing proportionately as the profits are accumulated; but any note which may have been deposited with. any mutual insurance company subsequent to its organization, in addition to the cash premium on any insurance effected with such company, may, at the expiration of the time of such insurance, be relinquished and given up to the maker thereof, or his representative, upon his paying his proportion of all losses and expenses which may have accrued thereon during such term. The directors or trustees of any such company shall have the right to determine the amount of the note to be given in addition to the cash premium by any person insured in such company; but in no case shall the note be more than five times the whole amount of the cash premium. And every person effecting insurance in any mutual comCompanies pany, and also their heirs, executors, administrators and assigns, continuing to be so insured, shall thereby become members of said corporation during the period of insurance, and shall be bound to pay for losses and such necessary expenses, as aforesaid, accruing in and to said company, in proportion to the amount of his deposit note or notes. The directors shall, as often as they deem necessary, after receiving notice of any loss or damage by fire sustained by any member, and ascertaining the same, or after the rendition of any judgment against said company for loss or damage, settle and determine the sums to be paid by the several members thereof as their respective portion of such loss, and publish the same in such manner as they shall see fit or as the by-laws shall have prescribed; and the sum to be paid by each member shall always be in proportion to the original amount

members thereof.

Directors to

determine amounts to

be paid by

members.

bers may be sued.

of his deposit note or notes, and shall be paid to the officers of the company within thirty days next after the publication of said notice. And if any member When memshall, for the space of thirty days after the publication of said notice, and after personal demand for payment shall have been made, neglect or refuse to pay the sum assessed upon him as his proportion of any loss, as aforesaid, in such case the directors may sue for and recover the whole amount of his deposit note or notes, with costs of suit; but execution shall only issue for assessments and costs as they accrue, and every such execution shall be accompanied by a list of the losses for which the assessment is made. If the whole amount of deposit notes shall be insufficient to pay the loss occasioned by any fire or fires, in such case the sufferers insured by the said company shall receive, towards making good their respective losses, a proportional share of the whole amount of said notes, according to the sums by them respectively insured; but no member shall ever be required to pay, for any loss occasioned by fire or inland navigation, more than the whole amount of his deposit note. [Laws of 1853, chap. 466, § 13, as amended by Laws of 1854, chap. 369, § 3.]

$17. [Sec. 14.] It shall be lawful for any mutual insurance company, established in conformity with the provisions of this aet, to unite a cash capital to any extent, as an additional security to its members, over and above their cash premiums and premium notes; provided, that such cash capital shall not be less than thirty thousand dollars, and which additional cash capital shall be loaned and invested as provided in the eighth section of this act; and the company may allow an interest on such cash capital, and a participation in its profits, and prescribe the liability of the

To unite as addition

cash capital

al security.

Insured may participate in profits.

Proviso.

Face of policy,

owner or owners thereof to share in the losses of the company, and such cash capital shall be liable as the capital stock of the company in the payment of its debts; provided, that such cash capital shall in all cases be paid in at the organization of the company, and satisfactory evidence of that fact furnished to the Superintendent of the Insurance Department.

Any existing joint-stock fire insurance company, and any company formed under this law, may (the written consent of the holders of three-fourths in amount of the stock first being had) permit the insured to participate in the profits of the business of such company, and provide how far any scrip, issued to the insured for such profits, shall be liable for the losses to be sustained; and any company so doing, whenever an amount not less than one hundred thousand dollars has been accumulated and scrip so issued therefor, may, with the written consent of the holders of three-fourths in amount of the stock, pay off and cancel an amount of the original cash capital equal to one-half of the accumulated profits, and so may continue from time to time until the whole amount of the original cash capital is paid off; provided, that before any portion of such capital stock shall be so paid off, proof shall be exhibited to the said Superintendent that an amount of accumulated profits has been realized, scrip issued therefor, and investments made thereof, pursuant to the provisions of the eighth section of this act, at least equal to double the amount so desired to be paid off and canceled, and the said Superintendent shall also first certify that he is satisfied with such proof. [Laws of 1853, chap. 466, § 14.]

$18. [Sec. 15.] Every fire and inland navigation inwhat to ap- surance company hereafter organized shall, if it be a

pear on.