CLARKE, J. In July, 1914, the People's Bank of Stamping Ground, Ky., having a capitalization of $15,000 and found to be insolvent, was taken over for liquidation by the state banking department. In April, 1916,

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(218 S. W.)

appellees, who were stockholders, instituted | pellant contends is applicable is thus stated this action in equity against the six directors in Newman's Pleading and Practice, § 439: of the bank, appellant being one of the num"If any one of the defendants in an action ber, and the banking commissioner, for a relies upon a plea of infancy, coverture, limitasettlement of the latter's accounts and to re- tion, non est factum, or any other defense merecover of the former their losses, when ascer-ly personal, or which does not go to the whole tained upon a settlement with the banking commissioner, alleged to have been caused by the negligence of the directors. Appellant and four other directors were served with summons, and the latter filed an answer, in which appellant refused to join, nor did he answer or appear at all. Plaintiffs and the four answering defendants proceeded to take depositions on the issues formed by their answer, and an order was entered dismissing the action without prejudice as to the remaining director, upon whom service of summons had not been obtained.

action, the plaintiff may recover as to some of the defendants while he fails as to others. But if either of the defendants should, in a which goes to the entire merits of the action, joint or separate answer, rely upon a defense such as payment, accord and satisfaction, or other meritorious defense, which shows that the plaintiff ought not to recover in the action, a judgment cannot be rendered against any of the defendants until that plea is disposed of; and if that defendant should succeed upon such a plea, the action must be dismissed as to all of the joint defendants."

This statement of the law has been approved by this court in numerous cases, cited in the text, and more recently in Le Moyne v. Anderson, 123 Ky. 587, 96 S. W. 843, 29 Ky. Law Rep. 1017. Appellees concede the rule, but deny its applicability here.

Thereafter, on October 23, 1918, plaintiffs filed an amended petition, alleging that since the filing of the action the banking commissioner, who had not answered, had fully disposed of all matters in his hands by converting all assets of the bank into cash and pay[3, 4] We think it is too clear to require ing same to the depositors on their claims, discussion that the directors of a bank may leaving nothing for the plaintiffs as stock-be severally or jointly, or severally and jointholders. The same day, upon a submission as ly, liable to stockholders for a loss resultto the appellant only, the court entered judging from negligence upon their part, dependment against him for the full amount ent upon varying degrees of fidelity to the claimed by plaintiffs, amounting to approximately $10,000, reciting therein:

"As to all other defendants and all other matters not hereby determined, the court reserves its opinion, and as to these matters this cause is continued."

It is therefore quite clear that this judgment is purely a default judgment, and in no wise an adjudication by the court of any matters at issue between plaintiffs and the four answering defendants, and that it cannot be sustained or helped by the evidence taken and filed in the case, upon the issues between plaintiffs and those defendants, which issues the court expressly reserved.

[1] After this judgment had been entered, and appellant had been unsuccessful in an effort to enjoin its collection, he gave notice and entered a motion to set aside the judgment against him on the ground that it had been prematurely entered and was a clerical misprision. From an order overruling this motion, he has prosecuted this appeal. He assigns two reasons why the default judgment against him was premature, the first of which is that the answer filed by his four codefendants inured to his benefit, because, if sustained, it defeated the cause of action stated in the petition against all defendants, including appellant.

[2] If this contention is true, the judgment was prematurely entered and a clerical misprision, and appellant has pursued the proper course to have it vacated. Sections 517 to 519, Civil Code. The law which ap

trust imposed and upon the character of negligence, whether by them as individuals or as a board; but we are not now concerned with the extent or character of their liability, if negligent, since we are only trying to ascertain whether the negligence charged against the directors is a joint or several negligence, in order to determine if an answer by part was in effect an answer for all, or if an answer was required by each director. If only negligence is charged against the directors collectively, and about matters which only as a board, and not individually, they were authorized to act, it is manifest that the negligence complained of would be a joint and not a several or individual negligence of the members of the board of directors, which would be put in issue as to all by a denial of any. If, upon the other hand, each or any member of the board is charged with negligence in the discharge of a duty which as a member of the board he was individually bound to perform, then the negligence charged would be individual, and must be denied by each so charged.

In order, therefore, to determine whether the answer, in which four of the six directors denied absolutely some, but for themselves only, other allegations of the petition, would, if sustained, defeat the cause of action, not only as against them, but as well against all of the directors, we must first examine the petition to ascertain whether it charged negligence against the directors individually, or only as a board. So much of the petition as is pertinent is as follows:

(218 S.W.)

of any of the facts alleged with reference to the cashier's unfitness, or that any diligence upon their part would have given them such information. It is true that the petition al

might possibly be construed to mean by each of them individually; but it is not clearly so alleged, and it is equally susceptible of the construction that the board of directors, rather than each member thereof, had such knowledge, and negligently failed to act thereon.

defendants thus far alleged as negligent is a fing every fact alleged as negligence, and decharge against the board, and is specifically nied for themselves that they had knowledge put in issue by the answering members of the board of directors, and that, if the answer should be sustained by the proof, there was no negligence by any of the directors. The next and last charge is that for sever-leges such knowledge by the defendants and al years before the bank was closed the cashier was squandering money of the bank, "while the defendants, with gross carelessness and negligence, and total inattention to the affairs of the bank, permitted him to continue in this course until he had squandered" all of its capital stock and surplus, "during all of which time defendants retained said cashier and surrendered to him full control and management of said bank and all of its affairs, and permitted him" to make worthless loans and loot the bank, with no effort to protect the bank, and without effort to discover or prevent the frauds being perpetrated by the cashier which eventually wrecked the bank, all of which facts were known to the defendants while the wrongs were being perpetrated.

This is the only part of the petition which even approaches a charge of negligence against the directors severally as well as collectively or as a board, and even this is, we think, insufficient for that purpose, in view of the denials and allegations of the answer of the four directors, a majority of the board responsible jointly with appellant | for Southworth's retention as a cashier, and for whatever authority and control he was given over the bank's affairs.

As heretofore noticed, it was denied that Southworth was given unreasonable or unusual control of the bank, which denial carries with it the necessary inference that the board of directors retained and exercised a proper control and supervision, and not only do the answering defendants, a majority of the board, deny want of care upon their part, but they deny that they, or any of them, had knowledge of any wrongful acts of the cashier, and in addition plead affirmatively that no care or examination on the part of “the defendants,” which included appellant, could or did disclose the fact that the cashier had committed thefts or defalcations.

[5] The petition, as we read it as a whole, bases the liability of the directors to the stockholders for their losses upon the negligence of the directors as a board in retaining Southworth as cashier after he beaame unfit for the position, and in granting to him too large a control and management of the institution, as a result of which negligence by the board he was enabled to and did wreck the bank. There is certainly no specific individual negligence alleged against appellant, or any of the directors.

The majority of the board answered, deny

Reading the petition and the answer together, we think the more reasonable construction of the two is that the petition charged negligence against the board as such, rather than against each or any member thereof as an individual, and that the answer put in issue every material fact alleged in the petition so effectively as, if sustained, to defeat, not only recovery against the answering defendants, but all of them.

Wherefore the judgment is reversed, and the cause remanded for proceedings consistent herewith.

HOME INS. CO. OF NEW YORK v. ROLL (Court of Appeals of Kentucky. Feb. 13, 1920.) 1. EVIDENCE 71, 89-PRESUMPTION OF DE

LIVERY OF LETTER MAILED MAY BE REBUTTED.

mailed with postage prepaid, there is a preWhere a letter is properly addressed and sumption that it was received by the addressee as soon as it could be transmitted to him in the usual course of the mails, but such presumption may be rebutted by evidence that it was not in fact received.

2. INSURANCE 665(3)

- VERDICT, FINDING PAYMENT OF PREMIUM ON FIRE POLICY BEFORE LOSS, HELD FLAGRANTLY AGAINST THE EVIDENCE.

On the issue whether insured mailed a check in payment of a premium on a fire policy at the time it became due, and before the loss, a verdict for insured held flagrantly against the

evidence.

OF LIABILITY WAIVES PROOFS OF LOSS.

Where insurer denies liability under fire policy and refuses to pay the amount of loss claimed, the provision that no suit can be brought until a certain time after the loss, or

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after proofs of loss are furnished, is waived, ly authorized to collect the same for said comand the right of action on the policy accrues immediately.

5. INSURANCE 598-RIGHT OF INSURED TO INTEREST WHERE INSURER DENIES LIABILITY. Where a fire policy provides that loss shall be paid within 60 days after the furnishing of notice of proofs of loss, the insured is entitled | to interest from the expiration of such time as a matter of right, but if the insurer denies all liability under the policy, it waives its right to withhold payment for the 60-day period, and

interest on the amount recoverable will run from the date of the loss.

pany."

During the month of October, 1917, contemplating insurance on a new barn then in process of erection, insured requested insurer's agent to inspect the barn to see if the policy could be so changed as to include it. Having, about the 30th of October, received a negative answer, insured claims that on November 1st she mailed to insurer's office

in Chicago her personal check in payment of the installment note due on that day, accompanied by a letter inclosing same, also the

Appeal from Circuit Court, Muhlenberg notice received from the company about the County.

Action by Vannie M. Roll against the Home Insurance Company of New York. From a judgment for plaintiff, defendant appeals. Reversed for further proceedings.

Gordon & Laurent and Frank M. Drake, all of Louisville, and Taylor, Eaves & Sparks, of Greenville, for appellant.

W. C. Jonson and Hubert Meredith, both of Greenville, for appellee.

QUIN, J. By its policy dated October 27, 1916, appellant, among other things, insured appellee's dwelling and certain grain and seed in the respective sums of $800 and $300, issuing what is known as a "farm installment policy" to cover same. One-fifth of the premium was paid in cash, the balance payable in four equal annual installments, represented by notes, executed by appellee and payable November 1st of each year.

Appellee's dwelling and a certain quantity of seed were destroyed by fire early in the morning of November 7, 1917, and, appellant having declined to admit liability under the policy, suit was filed thereon, and a trial resulted in a verdict in appellee's favor for $1,022.50, to reverse which judgment this appeal has been prosecuted.

middle of October, calling her attention to the maturity of the note. These papers she says were inclosed in a white envelope of the Green River Lumber & Tie Company, properly stamped and addressed to the company, and which was mailed at the post office at Greenville, Ky. November 2d, insurer's agent met appellee's husband on the street, and asked him if they had sent their premium to the company, and when answered in the affirmative the agent replied, "All right."

On the morning of the fire (November 7, 1917), and before noon of that day, insured wrote the company, notifying it of the loss. This letter insured states was inclosed in a blue self-addressed envelope, which had been received from the company. Thereafter she received a letter from the company, under date of November 13th, stating that on the 12th of November they had received notice from their agent that the property covered by their policy had been destroyed by fire November 7th, the company notifying appellee that, at the date of the fire the installment premium being overdue and unpaid, it was not liable for any loss or damage, and thereupon inclosed the company's check for the amount of the installment. The company in said letter denied any liabili

The policy contains the following provi- ty in any amount on account of the loss. sions: This check was later returned to the company.

And the amount of loss or damage having been thus determined, the sum for which this company is liable pursuant to this policy shall be payable sixty days after due notice, ascertainment, estimate and satisfactory proofs of the loss have been received by this company in accordance with terms of this policy. But it is expressly agreed that this company shall not be liable for any loss or damage that may occur to the property herein mentioned while any installment of the installment note, given for premium upon this policy, remains past due and unpaid; or while any single payment, promissory note (acknowledged as cash or other wise) given for the latter or any portion of the premium remains past due and unpaid. Pay

ments of notes and installments thereof must

be made to the said Home Insurance Company at its Western Farm Department office in Chicago, Illinois, or to a person or persons special

Various officers and employés of the company testified, in effect, that the only communication received from the insured was on November 9th, when they received the blue envelope above referred to, containing the notice of the maturity of the installment note and the insured's check dated November 1, 1917, in payment thereof; that up to that date they had never at any time re ceived any other letters or communication from the insured. The blue envelope was filed in the record, and bears this postmark: "Greenville, Ky., Nov. 8, 1917, 10 a. m.,” and indorsed in the upper left-hand corner is the number of insured's policy, which it is admitted was written there by her husband. The ordinary time for the carriage of mail

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