tion to the amount insured and the extent of the fire, the other is saved from loss in the same proportion.

CHAPTER II.

Insurance companies considered as corporations—the advantages of incorporation, with the powers, rights, capacities, and incapacities incident thereto their general privileges and disabilities—the different kinds of fire companies, as they exist in New York City, and the general enactments in their creation and regulation.

Most if not all companies for fire insurance are now incorporated by the legislature; for it has been found necessary and advantageous to the public, as well as to the individuals composing such company or association, to secure a kind of legal immortality, in order to preserve entire and forever those rights and immunities, which, if they were granted to individuals in their individual capacity, would upon their death be utterly lost and extinct; as well as several other important incidents which are tacitly annexed to a corporation, of course. We shall therefore, in order the better to understand the nature of insurance companies considered as corporations, proceed to show what is the nature of corporations in general. Blackstone's Com., book I, chap. 18, gives the following as the powers, rights, capacities and incapacities, which are incident to a corporation : 1st, To have perpetual succession, (or a definite time determined by the legislature.) This is the very end of its incorporation; for there cannot be a succession forever without an incorporation, and therefore all aggregate corporations (or those composed of a number of individuals united into one society) have a power, necessarily implied, of electing members in the room of such as go off. 2d, To sue or be sued, implead or be impleaded, grant or receive, by its corporate name, and do all other acts as natural persons may. 3d, To purchase lands and hold them, for the benefit of themselves or their successors, (corporations in the state of New York are not allowed to hold land, except such as is necessary for the transaction of their business,) which, too, are consequential to the former. 4th, To have a common seal; for a corporation, being an invisible body, cannot manifest its intentions by any personal act or oral discourse; it acts and speaks, therefore, only by its common seal. For though the particular members may express their private consents to any act by words, or by signing their names, yet this does not bind the corporation; it is by fixing of the seal, and that only, which unites the different assents of the individuals who compose the community, and make one joint assent of the whole.* 5th, To make by-laws or private statutes, for the better government of the corporation, which are binding upon themselves, unless contrary to the laws of the land, and then they are void. This is also included by law in the very act of incorporation; for as a natural reason is given to the natural body for the governing it, so by-laws or statutes are a sort of political reason to govern the body politic.

There are also certain privileges and disabilities attending an aggre

There is an exception to this in the case of policies of insurance, for it is generally declared by the charter that "the signatures, of, the president and secretary shall be binding and obligatory upon the company, in like manner and with, like, force as if under the seal of the said corporation."

gate corporation. It must always appear by attorney; for it cannot appear in person, being, as Sir Edward Coke says, (10 Rep. 32,) invisible, and existing only in indentment and consideration of law. It can neither maintain or be made defendant to an action of battery, or such like personal injuries. It cannot commit treason, or felony, or other crime, in its corporate capacity. It cannot be executor or administrator, or perform any personal duties. It cannot be seized of lands to the use of another, neither can it be committed to prison, or outlawed. The reason for all which is, that it has not a corporal existence, which would be essential in order that it be liable in like manner with an individual. In England, where the ecclesiastical courts exercise powers and jurisdictions peculiar to the laws of that country, a corporation is exempted from excommunication; "for it has no soul," as is gravely observed by Sir Edward Coke. (10 Rep. 32.)

A corporation may be dissolved by act of legislature, by surrender of its franchises, by forfeiture of its charter through the abuse of some of its privileges, or the commission of illegal acts, or through the omission of others which are obligatory upon it. Its debts, to or from it, in case of its dissolution, do not survive to the individuals composing it, so that they may be benefited by, or held responsible for them, in their individual capacity.

Thus much has been said respecting the general nature of corporations as is deemed necessary to our subject. We shall next consider the dif ferent kinds of fire companies as they exist in the city of New York; and all subsequent remarks will have this local reference. They are of two sorts: first, those that have a fixed capital determined by the legislature, and divided into a certain number of shares, which must be subscribed for and paid in, and secured according to the provisions of the charter. The number of directors is also fixed, from among whom one is selected to act as president. The directors are annually chosen by the stockholders for one year, and in case of death or resignation others may be appointed as may be provided for by the by-laws. A company is not allowed to commence the business of insuring until the whole of the capital stock shall have been paid in and secured, and an affidavit of that fact been made by the president and secretary, and filed in the clerk's office. The whole assets of the company are liable for losses, so that in the event of a large loss, the stockholders forfeit all their interest before the insured is affected. Dividends are made out of the surplus profits arising from the interest on the capital, and from the receipt of premiums, after all losses, debts, and expenses are paid, provided the capital is unimpaired; but no dividend can be made while the capital stock is impaired, or until such deficiency or loss of capital is made good.

Charters which have been obtained in the state of New York, since the year 1830, usually have a clause inserted in them, that they "shall possess the general powers, and be subject to the provisions of the eighteenth chapter of the first part of the Revised Statutes, so far as the same are applicable and have not been repealed.".

The second class of insurance companies are those which are denominated mutual companies. In these every insurer becomes a stockholder during the period for which he shall remain insured, and in amount, in proportion to the premium which he pays into the company; and for this amount he is liable in case of a loss. The capital is not fixed or deter

mined as in the case of the former companies, but is in proportion to the amount of premiums on hand, which constitute the capital stock. The profit or dividend is paid to the insurers or stockholders, in proportion to the amount of money paid in by them for premiums, in the same manner as shareholders in other companies. A president and board of trustees are elected in like manner, and for the performance of like duties, as the president and directors of those companies that are not mutual. There is a clause generally inserted in their charters that no policy shall be issued until application for insurance shall have been made to a certain amount, so that they may be provided for a loss at their commencement, if any should happen to be sustained.

CHAPTER III.

Of the policy-insurance, how effected-what covered by the policy-nature of the contract-how insured forfeits his right to recover-notice to be given of other insurance-policy, how assigned and transferred. "Policy is the name given to the instrument by which the contract of indemnity is effected between the insurer and the insured; and it is not, like most contracts, signed by both parties, but only by the insurer, who on that account, it is supposed, is denominated an underwriter. Notwithstanding this, there are certain conditions, of which we shall hereafter have occasion to speak, to be performed as well by the person not subscribing, as by the underwriter, otherwise the policy will be void." (Park on Insurance, c. 1.)

A proper representation of the character and situation of the property sought to be insured, and of all the circumstances which would in any way affect its risk, or personal inspection by the insurer or his agent, which is the usual way when convenient, is necessary to determine the rate of premium. This paid, and the policy received, the property is insured to the amount agreed upon and specified in the policy.* It should be remembered that no property is covered by the policy except that owned by the insured; hence goods stored, or held in trust, or on commission, must be insured as such. If different kinds of property are intended to be included in one policy, they must be designated with reasonable particularity, for the fixtures of a store would not be included if merchandise or stock only were mentioned; and so of similar cases.

Insurance of this sort is a contract by which the insurer, in consideration of the premium which he receives, undertakes to indemnify the in

• It is a custom among the companies to insure before the policy is made out, or even the premium paid. The correctness of this manner of doing business is very much questioned, however convenient it may sometimes be; no doubt, when the contract is in good faith, and a loss should under such circumstances be sustained, it would be paid by honorable men; but if the insurers should fall back upon their legal rights, the insured would not be able to recover, if the premium had not been paid. This is undoubtedly so; for the claimant could only plead a verbal promise, without consideration; but if he had paid the premium, although the policy had not been delivered, a court of equity would compel the insurer to deliver a policy, although the property might then be destroyed; and upon the policy so obtained, through the intervention of a court of equity, an action might be sustained in a court of law; at least this is the opinion of those legal gentlemen who have been consulted upon this point.

sured against all losses which he may sustain in the property insured, by means of fire, within the time limited in the policy. The following exceptions, however, are usually made in the policy: "except those which may happen by means of any invasion, insurrection, riot, or civil commotion, or any military or usurped power;" and in some cases by lightning. We are, therefore, next to consider upon what occasions the insured annuls his policy, and is prevented from recovering in case of a loss. The contract may be void from the beginning, if the knowledge of any fact is withheld which might prevent the insurers from taking the risk, or of charging a higher rate of premium. "In every contract between man and man, openness and sincerity are indispensably necessary to give it its due operation; because, fraud and cunning once introduced, suspicion soon follows, and all confidence and good faith are at an end. No contract can be good, unless it be equal; that is, neither side must have an advantage by any means of which the other is not aware. This being admitted of contracts in general, it holds with double force in those of insurance, because the underwriter computes entirely* from the account given by the person insured, and therefore it is absolutely necessary to the justness and validity of the contract, that this account be exact and complete. Accordingly the learned judges of our courts of law, feeling that the very essence of insurance consists in a rigid attention to the purest good faith and the strictest integrity, have constantly held that it is vacated and annulled by any the least shadow of fraud or undue concealment." (Park on Insurance, c. 10.)

There are several ways also by which the insured may forfeit his right to recover for a loss, between the time of the date of the policy and its termination. As it would be impossible to mention all the circumstances which would have this effect, it may be considered as a general rule, that whatever tends to increase the risk of the subject insured, should be made known to the insurer, and his consent endorsed upon the policy; as, if A has his building insured, privileged for the storing of tea, and afterwards, without obtaining the consent of the insurer, uses the building for a more hazardous business, such as drugs, the policy would be void.

Notice must also be given of all previous insurance which may be binding at the date of the policy, and of any subsequent insurance which may be obtained upon the property, that a memorandum of it be endorsed upon the policy, or otherwise acknowledged in writing. An omission to do this would be a bar to recovery; this condition being always inserted in the policy, forms a part of the contract. The necessity for this will be seen if we consider the temptation for persons to fire their property, if allowed to procure insurance beyond its value.

Policies of insurance are not, in their nature, assignable; the contract being to indemnify the person named in the policy against loss, of course the insured would not be allowed to elect another to stand in his place and stead, without the permission of the insurer; and as the contract is in writing, therefore the assignment or permission must also be in writing. A departure from this rule would work hard against the insurer, for, doubtless, in many cases, he is governed in taking the risk and fixing the rate of premium in a great measure by the character of the insured; and

This expression should be limited, it being customary for the insurer to examine for himself, personally, or by his agent.

if assignments were allowed without the insurer's permission, he might, by such assignment, be placed in a much worse condition than he was in by the original contract. This should not, however, be construed to affect the interest of the insured's executors, administrators, and assigns, who stand in his place without the necessity of an assignment.

Insurance may also be transferred from one building or property to another, in case of a removal, &c., with the consent of the insured, such transfer being endorsed on the policy. The insurer has his election to assign or transfer, or not, and in case of a refusal, a rateable proportion of the premium on the risk for the unexpired time will be refunded, and the policy cancelled.

ART. V.-ANNUAL REPORT OF THE MERCANTILE LIBRARY ASSOCIATION.

THE Twentieth Annual Report of the Board of Directors of the Mercantile Library Association of New York, which we here subjoin, will be found a clear and interesting document, not only to members of the association, but to all who take an interest in the cause of intellectual im. provement. It enters into a view of the condition of this noble monument of mercantile liberality, and proposes judicious plans for the increase of its prosperity. The advantages of the organization of similar associations in the commercial cities of our country, must be obvious to those who know the amount of moral and intellectual good that has been accom. plished by this body, and we are glad to perceive that the young men of the neighboring cities are awakening to the importance of the subject. The institution is under obligations to the officers of the past year for the faithful performance of their duties; and we doubt not that those who have been connected with the direction of its affairs, receive full compensation for their services in the cordial thanks of its members. Mr. Silliman has presided with dignity, and the report from his pen is in keeping with his well-sustained character, as president of this flourishing association.

Gentlemen of the Association

ANOTHER year rolling onwards since our last annual meeting, is numbered with the past, and those to whom you then intrusted the interests of this institution, now stand before you to render an account of their stewardship. The earlier part of that year, like several of its predecessors, dark and gloomy to the whole country, has been peculiarly so to the mercantile community. The honest merchant, struggling to meet his engagements and sustain his com mercial reputation, has been in many, too many instances, compelled to fold his hands in despair, as his means have sunk and disappeared in the ruins of a prostrate and helpless currency: property upon which he had based his contracts, fading from his view like the mirage of the desert, on his attempt to realize it; or, like the coin which the evil one is said to barter for men's souls, turning in his hands to worthless dross and stones of state. The merchants, in the last several years, have passed through a fierce ordeal of toil, of trouble and disappointment, that in the annals of the commerce of this country is un paralleled.

Happily, gentlemen, the clouds are rolling from the horizon; the sun again