24 Ind. App. 169 | Ind. Ct. App. | 1899
Lead Opinion
It is averred in the complaint that appellant is a “Social and Insurance Company,” and that one object of the association is to render pecuniary aid to its’ members when they become sick, provided such sickness is not caused by their own misconduct, etc. It further appears from the complaint that appellant issued to appellee, who was plaintiff below, a certificate of membership January 15, 1896, and at that time he paid $2.60, $2 of which was the membership fee and sixty cents for dues to February 1, 1896; that by the terms of the certificate the dues to be paid by appellee were $1 per month, to be paid in advance on the first day of each month; that he paid the successive monthly dues, including the July, 1896, payment; that on July 22, 1896, he became sick; that his said sickness was
The issues were joined by an answer and reply, but as no question is discussed as to. the sufficiency of the pleadings we need not refer to them further. Upon a proper request therefor, the court made a special finding of facts and stated its conclusions of law thereon, and rendered final judgment for appellee. The only question discussed by counsel arises under the second and third specifications of the assignment of errors, which challenge the conclusions of law. A proper consideration of the question necessitates a brief statement of the facts found, and they are as follows: That on January 14th appellee made a written application for membership in appellant association; that on the following day appellant issued to him a certificate of membership; that the monthly dues of $1 should be paid on or before the first day of each month, and, if not paid by the third of each month, the member should be suspended from membership and from receiving any and all benefits; that from and after January 15, 1896, continuously to and including July 1, 1896, appellee paid his regular dues; that on and after August 1, 1896, appellee did not pay appellant any dues; that on July 21st appellee became sick, and so remained continuously until December 30, 1896, being a period of twenty-six weeks; that on August 1, 1896, appellee was financially unable to pay his dues, and so remained until December 30, 1896; that appellant, by reason of said certificate of membership, is liable to appellee according to
The sole question discussed and for decision is: Did appellee become delinquent and forfeit his membership, and hence his right to sick benefits, by his failure to pay his dues on or before August 3, 1896, while appellant was indebted to him for sick benefits accrued? Appellant urges that
In construing contracts of insurance such as the one before us, it is the duty of the court so to construe them as to give them effect and force, and to construe them most strongly against the insurer. Porfeitures are not favored, and where the language of the policy is doubtful courts will adopt the construction which will avert a forfeiture. Again, courts are reluctant to grant or to declare forfeitures, except in very clear cases, and intendments can not be taken in favor of the party asking the forfeiture. These general principles are fully sustained by the authorities. Franklin, etc., Ins. Co. v. Wallace, 93 Ind. 7; Northwestern, etc., Ins. Co. v. Hazelett, 105 Ind. 212, 55 Am. Rep. 192; Michigan, etc., Ins. Co. v. Custer, 128 Ind. 25; Painter v. Industrial, etc., Assn., 131 Ind. 68; Home Ins. Co. v. Marple, 1 Ind. App. 411; Bowles v. Phenix Ins. Co., 133 Ind. 106, 20 L. R. A. 400.
In Farmers, etc., Assn. v. Koontz, 4 Ind. App. 538, it was held that forfeitures are not favored in law, and instruments will be so construed as to prevent them, if it can be done without violence to the language employed; and that in the casé of an insurance policy any provision therein in the nature of a forfeiture clause is to be construed most strongly against the insurer, and as favorably as possible to
In Continental, etc., Ins. Co. v. Vanlue, 126 Ind. 410, 10 L. R. A. 843, Elliott, J., said: “Provisions intended to create a forfeiture, wherever found, are strictly construed in order to avert a forfeiture; but such provisions are restricted, with especial care and strictness, in contracts of insurance, the courts, with an almost unanimous voice, deciding that such contracts, because of their peculiar character, shall be strictly and rigidly construed against the insurance company wherever a strict construction is necessary to prevent the forfeiture of the policy,” citing many authorities. By the rules so well established and the principles so firmly grounded, to which we have referred, we are required to give to the policy, or certificate of membership, before us, a very strict construction against appellant, and avert a forfeiture if we can do so without doing violence to the language of the contract.
The certificate of membership issued to appellee provided that so long as he paid the required dues he should receive certain benefits, under certain conditions. One of the benefits to which he was entitled is expressed as follows: “Eor sickness, $10 per week beginning with the second week, and running not longer than thirty weeks; this benefit not in force for sickness beginning less than ninety days after delivery of this certificate.” In the application, which, by
It is proper for us to refer to the last question above quoted, which appears in -the application. There the insured was asked if he understood that if he did not pay his monthly dues in advance on or before the third day of each month he would stand suspended from receiving all benefits until reinstated as provided by the by-laws. This question he answered in the affirmative. It is urged by appellant that, when the certificate of membership and the application are construed together, it clearly appears that a failure to pay monthly dues, as provided, worked a forfeiture, and that both the insured and the insurer so understood it; and this question and answer are referred to as an evidence that the insured so understood it. If appellant had been in good health on August 1, 1896, when his monthly dues became payable, and failed to pay the amount due, within the limit fixed, then there could be no doubt but what he would stand suspended, and it was in this sense that he understood that fact when he answered the question. But he did not understand that if he fell sick while he was in good standing, and the association became liable to him for sick benefits, under its contract, while he was in good standing, that a failure to pay his monthly dues while in that condition, and while the
It seems to us that the purpose of the organization, as shown by the certificate of membership, is to afford aid in sickness, and to secure to its members indemnity for actual loss occasioned by accident or illness. This contract of insurance on the part of appellee is not a speculation, but a mere contract of indemnity to secure from appellant a fair compensation for losses occasioned by his physical disability. A like intention is manifest on the part of appellant from the questions it required appellee to answer in his application. Why did appellant require appellee to state what his weekly earnings were? Why did it have him agree that it should not pay him in case of sickness an amount not exceeding his weekly earnings? What right did appellant have to inquire as to his weekly salary as a condition precedent to issuing to him a certificate of membership? These questions are suggestive, and they are without meaning and useless, unless by a fair and liberal interpretation a fixed and definite meaning can by the court be read into them. And the only reasonable meaning we can place upon them, in view of the nature of the contract, is that the sick benefits therein provided for are to provide for the ordinary living expenses of the insured, which were formerly met by wages earned by him while in health, and for the extraordinary expenses incurred by reason of such sickness. Taking the whole contract, including the application, the reasonable and logical conclusion is that as weekly wages are to measure the indemnity to be re
"While appellee contends with much force and earnestness that under the facts found there could not be a forfeiture, yet he argues, even if his sickness did not dispense with the necessity of paying membership dues during the sickness, still there could be no forfeiture for failure to pay if there was sufficient money in the hands of appellant accrued to appellee to pay such dues during the period of his sickness. Three classes of cases have arisen in which a forfeiture of insurance benefits has been sought by the insurer for delinquency on the part of the insured, where the insurer at the timé of the alleged default has been indebted to the insured in an amount sufficiently large to cancel the latter’s indebtedness, and where such cancelation has been ordered by the court: (1) Where the alleged delinquency arose from failure to pay premium or interest on premium notes; (2) where the delinquency arose from a member of a mutual society failing to pay assessments, and (3) where it arose from such member’s failure to pay membership dues. And the decisions as to all these classes of cases rest upon the same principle and are sustained by the same reasoning.
The rule, as stated by May on Ins. (3rd ed.) §345a, is as follows: “Dividends standing to the credit of a member of a mutual insurance company will inure pro tanto as payment of premiums falling due, especially if such had been the custom of the company, and the course of business between the parties did not show that such was not this contract.” 2 Bacon on Ben. Soc. (new ed.) §365, says: “Where a mutual insurance company has in its hands divi
In the the case of the Northwestern, etc., Ins. Co. v. Fort, 82 Ky. 269, the policy provided for a forfeiture in default of payment of the interest on premium notes. It was held that the company was bound to apply the dividends in its'hands to the interest on the notes to save a forfeiture, although the notes themselves only provided for the application of dividends to pay the principal.
The case of the Girard Life Ins. Co. v. Mutual Ins. Co., 97 Pa. St. 15, is also in point. There the premium of $57 became due January 14, 1871. January 1, 1871, there
The second class of cases above referred to is fairly illustrated by the case of Knight v. Supreme Council, 6 N. Y. Supp. 427. Knight became a member of the order July 28, 1884. He was illegally assessed for losses occurring before he became a member, and paid the assessment in the belief that it was legal. January 1, 1887, another assessment was made, payable January 31st, following. Knight
The- case which is probably more in point, and illustrative of the third class of cases, viz., those in which default and consequent forfeiture are alleged or claimed to have occurred by reason of a failure to pay membership dues, is the case of Brady v. Coachman’s Ben. Assn., 14 N. Y. Supp. 272. There the association had a by-law in force which provided that members in arrears for three months’ dues ($1.50) should not be entitled to benefits until three months after such arrears shall have been paid. . Brady became a member of the. association in February, 1870. On November 4, 1888, he became sick. At'the time he became sick he was in good standing, and so remained until May 27, 1889, when he became delinquent for non-payment of dues. August 27, 1889, he was three months in arrears, and so continued till December 1, 1889, at which time he paid $5 dues, which made him in good standing till March 27, 1890. March 13, 1890, he sued the association for benefits accruing from November 4, 1888, until suit was commenced. The association did not controvert these facts as to payment of dues by Brady, and hence it claimed (1) that its exceptions to the judge’s charge, by which it was left to the jury to determine whether or not he was in arrears on August 27, 1889, were well taken, and (2) that if, as matter of law,
We have examined the authorities cited by appellant in support of its argument that appellee had forfeited his membership and benefits by failure to pay his monthly dues. In Willculs v. Northwestern Ins. Co., 81 Ind. 300, it was held that a custom can not be proved by evidence of a single act, and that a partial payment of a premium did not entitle the insured to a proportional share of the insurance. In that case it was held that the contract, in explicit terms, made the right to the insurance an indivisible one, and that a part payment of a stipulated premium could not change the contract and would not entitle the insured to a proportionate part of the insurance. The court also expressly distinguishes the Willcuts case from the case of Girard Ins. Co. v. Mutual Ins. Co., supra, and quotes approvingly this language used in that case: “Was it conscionable for the defendant company to forfeit this policy, when it had in its hands more than enough of the assured’s money to pay the quarterly premium due on the 14th of January?” Judge Elliott then remarks that if the doctrine there declared was applied, it would not meet the question before the court in the Will-cuts case.
The case of the Ancient Order, etc., v. Moore, 1 Ky. Law Rep. 93, cited by appellant, is not in point here. There the contract of insurance was made with appellant as the parent or supreme head of the order. It had the power to levy an assessment on the death of a member. Appellee was also a member of a subordinate lodge, and under the laws of the order was entitled to receive from the subordinate lodge
Leffingwell v. Grand Lodge, etc., 86 Iowa 279, 53 N. W.
We might pursue this discussion by citing and comment,ing upon other authorities quoted, but it would be useless. We have shown the distinction between the principle cases relied upon by appellant and the case before us. In all those cases there was no mutuality, and there were also intervening agencies that so clearly mark the difference between them and this case that we must hold that they are not authority, nor of controlling influence here.
Under the facts in this case, and the authorities, we think it equitable and just to hold that appellant is entitled to deduct from the amount due appellee for sick benefits the
Dissenting Opinion
Dissenting Opinion.
I can not agree with the conclusions reached by the majority of the court.
The material parts of the contract are: In the application: Q. 6. “Do you understand that if your monthly dues are not paid in advance on or before the third day of each month you stand suspended from receiving all benefits until reinstated as provided for in the by-laws?” A. “Yes.” In the policy: “This certifies that Walter Hopper is an acceptable member, and as such, during the time he shall pay his dues and his proportion of other expenses authorized by the by-laws, is entitled to receive the full social privileges; also, if in good standing, the following financial benefits under the terms and conditions provided for in the by-laws, viz.: Eor sickness: $10 per ^veek, beginning with the second week.” In the by-laws: “All dues shall be paid on or before the first day of each month in advance. If any member shall fail to pay his dues to the Supreme Council on or before the third day of each month, in advance, such member shall thereby, on account of such failure, and without any action on the part of the Supreme Council, become, and shall thereafter be, suspended from membership and from receiving any and all benefits of membership under his certificate. Any suspended member making application for reinstatement within thirty days after suspension and fur
It is elementary that one cannot claim the benefit of a contract while failing to comply with its terms. No application was made for reinstatement. No question of waiver is presented. No right of claim growing out of a custom or usage of the association in receiving delinquent dues. No dividend was due the assured. . No mutual account existing between the parties which would give to either the right of set-off when the premium became due, August 1, 1896. The only question then is whether the insured is entitled to such benefits, when, under the terms of his contract, his membership and all rights incident thereto are suspended, and when he has failed to pay the consideration for which benefits are promised.
In Klein v. New York Ins. Co., 104 U. S. 88, it is stated that a condition in a policy of life insurance that, if the stipulated premiums shall not be paid on or before a certain day the policy shall cease, is of the very essence and substance of the contract. Against a forfeiture caused by its failure so to pay, a court of equity can not relieve.
Justice Woods, speaking for the court, said: “A life insurance policy usually stipulates first, for the payment of premiums; second, for their payment on a day certain; and third, for the forfeiture of the policy in default of punctual payment. * * * Each of these provisions stands on
The majority opinion would seem to hold that sickness relieved the insured, but held the insurer to the obligations of the contract. If the appellee is entitled to recover, it must be solely upon the ground that sickness excused him from the payment of his dues. It has been held in many cases that this is not an excuse which will avoid forfeiture; among them we cite, Carpenter v. Centennial, etc., Assn., 68 Iowa 452, 27 N. E. 456; Ingram v. Supreme Council, 14 N. Y. St. 600. To the same effect are Howel v. Knickerbocker Ins. Co., 44 N. Y. 277; Yeo v. Masonic Mut., etc., Assn., 63 Md. 86; Hawkshaw v. Supreme Lodge, 29 Fed. 770. See, also, Joyce on Ins., §1350; Willcuts v. Northwestern Ins. Co., 81 Ind. 300; Ancient Order, etc., v. Moore, 1 Ky. Law Rep. 93; Leffingwell v. Grand Lodge, etc., 86 Iowa 279, 53 N. W. 243; Hansen v. Supreme Lodge, 140 Ill. 301, 29 N. E. 1121.
The judgment should be reversed. Henley, J., concurs in the dissenting opinion.