REPORT OF THE SUPERINTENDENT.   sl-ii

newed for 8100.80, 85 being paid in cash to White, who gave a receipt for the note and cash as having been received " to retire James Flenting's note for 8103.50, due May 22nd, 1896 " : hut on this latter note being taken to Burke & Graham, they refused to renew, and retained the note of the 19th November, 1894, in their own hands overdue. The promissory note of the 21st March, 1595, was not paid at maturity, and it, with the note of the 19th November, 1894, remained overdue and unpaid in Burke & Graham's hands until smite time in July, when, in order that the defendants might be in a position to say that they held the notes as past due notes, they were taken up by White with moneys furnished to him by the defendants, to whom they were handed over. Fleming was at this time dead, his death having taken place on the previous 15th June. Upon this state of facts the defendants contend that the policies were never binding on them at all, because, as they say, White neither received the cash nor promissory notes approved of by them for the premiums, and that even if the promissory notes taken by him, or \White's own note, are to lte treated as notes given for the insurance premiums, or even if the latter was accepted in satisfaction and discharge of the premiums, the conditions indorsed in the policies prevent the plaintiff recovering, the policies having, as they contend, become void in consequence of the notes not having been paid at maturity, and they invoke in support of this contention, condition one, which provides that policies shall not be in force until the first premium is paid, and condition 10, which is as follows :--" If a note or other obligation lte taken for the first or renewal premium, or any part thereof, and such note or obligation lte not paid when due, the policy or assurance becomes null and void at and from default, but such voidance of the policy or assurance shall not relieve the maker thereof from payment of the note or obligation, and the premium shall be considered as earned and shall be recoverable by the company. The policy or assurance, however, may be revived and reinstated at the discretion of the directors on condition of payment of the premium and interest and evidence of continued good health. Should any note or other obligation for premium be current at death, or other event, upon which the sum assured becomes payable, the amount of the note or obligation shall be deducted from the claim." And they further contend that the renewal of the promissory note of the 19th November, 1894, after it was overdue, was an unauthorized act of the agent, and not binding on them, and that after default, the directors, and they only, could revive or reinstate the policy. It was urged on behalf of the plaintiff that the effect of the transmission between White and Fleming was that there was a payment in cash of the premiums and that is ell if that lte not so, the defendants accepted White's promissory note for 8135.16 in payment of the portion of the premiums to which they were entitled, and that the condition relied on has no application to a case where the promissory note of a third person is accepted in satisfaction of the premium. The case is by no means free from difficulty, but I have, after much consideration, come to the conclusion that the plaintiff is entitled to succeed. There is nothing, so far as I can see, to prevent a company, such as the defendant company is, accepting in satisfat tion and discharge of a first or any other. premium, the note of a third person, if the company chooses to do so, and it seems to me that to a promissory note so taken, condition 10 can have no application. It would be indeed an anomaly, if after payment by such a promissory note, and the premium being thereby satisfied and discharged, the default of the maker of the note in paying it should void the policy and render the insured also liable to pay the premiums in satisfaction of which it had been accepted. The condition is, in my opinion, not applicable to such a case, but to cases where the promissory note is taken, not in satisfaction and discharge of the premium, but for and on account of it, where it would operate only as a conditional payment to be absolute if and when the note was paid at maturity. If this be the correct view as to the law, what is the proper finding of fact as to the way in which \White's promissory note was received by the defendants. It is, I think, that the note was taken in satisfaction and discharge of the premiums. As I have pointed out, White had the proceeds of the promissory notes given by the Flemings in his hands, though he was liable to Burke & Graham as indorsers on them—the notes were not taken by him on the defendants' account, but were taken and dealt with as a transaction between him and the insured, and for the purpose as I think the fair inference is, of enabling hint to pay to the defendants in cash the share of the premiums to which they were entitled, and to give to him the present use of his own share of them, and White, I think, when, he sent his letter and telegram of the 31st December, 1894, to the defendants, in-tended that they should take, and they in receiving his promissory note, intended to take and took it in satisfaction and discharge of the premiums due to them in respect of the policies to which they had reference. In reaching this conclusion I rely on the language used in the correspondence read in connection with what had taken place, and the manner in which the defendants afterwards treated and dealt with the policies, rather than the recollection of White and Brown (the manager) as to what the true character of the transaction was. The provisions of the bond given by White and his sureties to the defendants in 1891 are not without significance. In addition to the provisions contained in the printed form used, which I take to be the ordinary ones, I find a special provision in these words : " It is understood and agreed that this bond will cover payment of any and all notes made by NV. H. White that the company may accept from the said W. H. White for premiums under policies effected by him as well and effectually as if no such note or notes were taken." It may be well, I think, that the arrangement made between White and Brown (the manager), to which the latter referred in his evidence, was that to which this term of the bond refers and it was probably in pursuance of it that White assumed the right to send as he did, his own promissory note in settlement of the pretltiums. I am inclined to think also, that the transaction between \White and the insured amounted, when the proceeds of the promissory notes which the received from hits came into White's hands to a payment in cash of the premiums, and the plaintiff's right to recover may be supported on that ground also. The defendants' counsel cited the case of McCormae r... The Temperance and );eneral