were less than the amount of the values of the outstanding policies by about one-tenth of that amount; that the capital was entirely sunk; that the assets were of a kind not readily convertible or available; that a portion of the assets had been kept as a cash deposit with a private banker who was an officer of the company, without any agreement as to interest, and without security against losses; that the trustees were not in the practice of holding regular meetings, or of supervising the affairs of the company; that dividends were paid without a regular meeting or vote of the board of trustees, when there had been losses and depreciation in the value of the assets, and when it was impossible to know whether or not the capital had been impaired; it was held that there was sufficient cause for interference, and that an order granting a receiver, and enjoining the company from the further prosecution of its business, would not be reversed; but that a clause in the order dissolving the corporation itself, was improper.1 § 7221. Appointment at the Suit of Judgment Creditors. Receivers of insolvent insurance companies may be appointed at the suit of judgment creditors, unless the statutory system by which such companies are governed, enacts or implies some other mode of winding them up and of satisfying the demands of their creditors and policy-holders. In New York, an insolvent mutual insurance company could be wound up by means of a receiver, appointed at the suit of a judgment creditor, under the provisions of the Revised Statutes authorizing the property of insolvent corporations so to be sequestrated. But it was held necessary to pursue the provisions of the statute strictly; and therefore, before the court could lawfully order sequestration and appoint a receiver, it must have a petition before it from a judgment creditor, or his legal representatives, setting forth the due recovery of a judgment in a court of law or of a decree in equity, with the due return of an execution issued thereon, unsatisfied in whole or in part. This was essential to confer upon the court the slightest power People v. Atlantic Mut. Life Ins. Co., 74 N. Y. 177. or authority to proceed in the case.' The court pursued this doctrine to an untenable degree of strictness and nicety. A petition signed by and in the name of the attorney for the judgment creditor, was not sufficient to confer jurisdiction; and an order made thereon for the sequestration of the property of the corporation and the appointment of a receiver, was unauthorized and void. Nor could this be cured by an order subsequently made by a judge at Special Term, granting leave to amend the petition. Nor did an amendment, in pursuance of such an order, cure the defect, but it was held to be merely adding nullity to nullity. The reason was, that a petition complying with the statute was necessary to the jurisdiction of the court in the first instance, and that the court could not make any order amending its process or its pleadings until it had acquired jurisdiction; it could not make a void proceeding valid by an amendment in the same proceeding or matter.2 § 7222. Appointment at the Suit of Policy-holders. — Unless there is a statutory scheme of procedure which displaces the ordinary jurisdiction of equity, there is no room to doubt that a bill may be filed by a policy-holder, on behalf of himself and other policy-holders, to procure the appointment of a receiver; and upon such a bill, charging a loss of the funds of the society, through the negligence of the directors, and on an answer and affidavit showing that the secretary had absconded with part of the funds, and that some of the directors were in needy circumstances, it was held by the English Court of Appeal in Chancery, in 1854, that a receiver ought to be appointed and the society enjoined from the further prosecution of its business. § 7223. Impeaching the Decree Appointing the Receiver. It seems very clear that in such an action the defendant cannot, by way of defense, impeach the validity of the proceed Bangs v. McIntosh, 23 Barb. (N. Y.) 591. Bangs v. McIntosh, 23 Barb. (N. Y.) 591. • Evans v. Coventry, 5 De Gex, M. & G. 911. ings appointing the receiver upon any ground less than a want of jurisdiction in the court to make the appointment.' An answer that the officers of the company had entered into a fraudulent combination with A. and B., and procured the institution by A. and B. of the suit against the company in which the receiver was appointed, and in which the assessment sued for was made; and that they had, by fraud, collusion, improper admissions, and false testimony, procured the decree of appointment of the receiver and the making of the assessment, has been held bad on this ground, and also on the further ground of failing to allege any material facts constituting the fraud. § 7224. Receiver cannot Reinsure Risks.-The receiver of an insolvent insurance company will not be authorized to reinsure its risks, and to that end, to pay a new premium out of the assets of the company; but his proper course is to refund the unearned portion of the premiums received, where the assured are willing to receive them, and let them reinsure for themselves, if they see fit. § 7225. Cannot Waive Stipulations in Policies.-It is clear that a receiver cannot waive a stipulation in a policy of insurance which the terms of the policy prohibit the officers of the company from waiving, at least, under a view that where such a stipulation in a policy is valid, a waiver of it by the officers of the company does not estop the company, in the face of such a stipulation. 1 Ante, §§ 6864, 6929. Boland". Whitman, 33 Ind. 64. Re Croton Ins. Co., 3 Barb. Ch. (N. Y.) 642. Evans v. Trimountain Mut. Fire Ins. Co., 9 Allen (Mass.), 329. In a per curiam opinion, the court say: "We cannot say that a mutual insur ance company, which wishes to prevent the possibility of controversy as to the terms of supplementary agreements, may not provide that it will Similarly, it was held by Chan not be bound by any oral consent which its officers may give to a variation in the terms of the liability which it has assumed. This is what the present company has undertaken to do. And, although the case, upon the agreed facts, is one of hardship to the plaintiff, the rule of law cannot be varied on that account, and the receiver had no right to dispense with these rules and determine the case upon principles of equity." cellor Walworth that it is the duty of receivers of corporations, proceeding under the Revised Statutes of New York, to allow all claims against the corporation which they shall be satisfied are legal and just; but that they should allow no claim which could not have been the ground of a recovery against the corporation, either at law or in equity. It was held by Assistant Vice-Chancellor Hoffman in 1839, that a receiver of a life insurance company has no authority to waive a defect in preliminary proofs of loss, required to be made by a policy of insurance, in order to entitle the insured to the indemnity thereby secured. It is doubtful whether this decision ought to be quoted as authority for such a proposition. It was rendered at a time when it was the law of New York that even the president of a fire insurance company could not, without special authority in its charter, waive the full preliminary proofs of loss required by its policies, but that such waiver required the action of the board of directors, or of a committee of the directors authorized to settle the claim.3 This decision is believed not to express the modern law; but that law is believed to be that such a waiver may be made by whatever officer of the corporation acts as its agent and mouth-piece in corresponding or dealing with the insured in respect of his proofs of loss. To the acts and representations of the agent, or to his failure to act or speak, the insured is entitled to give credit, and he cannot, in general, look beyond that agent or fish out the board of directors, which, in many cases, is practically a non-existent body, committing all the details of the business to ministerial officers. More recently it has been conceded that a receiver of a fire insurance company, appointed under the laws of New York, has the same right as the company would have had to waive a clause of forfeiture in a policy of insurance founded on the death of the insurer, and to consent to a continuation of the policy after his death." 1 Attorney-General v. Life &c. Ins. Co., 4 Paige (N. Y.), 224. 2 McEvers v. Lawrence, 1 Hoff. (N. Y.) 172, 175. Dawes v. North River Ins. Co., 7 Cow. (N. Y.) 462. Hine v. Homestead Fire Ins. Co., 29 Hun (N. Y.), 84, 85. § 7226. Payment of Losses Accruing During the Receivership. —In the case of a strictly mutual insurance company, it is to be kept in mind that the policy-holders are the only members of the company,' and that, when their policies expire by their own limitation, their holders cease to be members. There is no joint-stock or other common fund than such as accrues from the payments of assessments laid against the members on the premium notes, which are usually given by them as a sort of mutual guaranty fund. The contract of insurance in such a company is, in substance and effect, a multipartite contract among all its members, under which each one agrees to pay such a ratable assessment laid by the directors as may be necessary to provide a fund for the payment of any losses which may accrue to any of the members under his policy of insurance. It necessarily follows that, when such a company, by reason of its inability to continue its business, passes into the hands of a receiver for the purpose of a judicial winding-up, this is tantamount to a breach of this multipartite contract subsisting among its members. Unless there is a statute, such as is believed to exist in some States, applicable to some conditions, allowing a receiver, under the order of the court, to continue the business of the company, the necessary effect of the judicial proceeding to wind up is to cancel and put an end to every one of its contracts of insurance, and to leave the holders of the policies entitled, at most, to damages for the breach of the contract made by the other members, through the corporation, with himself. The measure of 1 Mygatt v. New York Protection Ins. Co., 21 N. Y. 53. This is, in some cases, declared by statute, though unnecessary. Thus, a statute of New Jersey (Pub. Laws N. J. 1863, p. 395), enacts, "that all persons who shall insure in or with the corporation, shall, while they continue so insured, be deemed and taken as members of said corporation." Mayer v. Attorney-General, 32 N. J. Eq. 815. That what the policy-holder is entitled to may be placed on the footing of damages for the breach of the contract embodied in his policy, is not a fantastic conception, will appear from an opinion of the Court of Appeals of New York, written by Earl, J., in which he said: "The company is the creature of statute, and its mode of action for the protection of the policy-holders is regulated by statute. From the nature of the |