121 Minn. 310 | Minn. | 1913
This is an action to recover upon a certificate of membership, or policy of life insurance upon the assessment plan, issued by defendant to Hermann lbs, in which policy plaintiff was designated as the beneficiary. At the close of the evidence, the trial court directed a verdict in favor of plaintiff for the full amount of the policy, with interest. Defendant appeals from an order denying its motion for judgment notwithstanding the verdict or for a new trial.
The case was before us at the April, 1912, term on an appeal by plaintiff from an order denying a new trial after a dismissal. Without determining the questions argued on that appeal, we held that there ought to be a new trial, to “clarify the claims of the respective parties, and enable the court to determine the case upon the merits as then presented.” Ibs v. Hartford Life Ins. Co. 119 Minn. 113, 118, 137 N. W. 289. The case is before us now after such a determination on the merits by the trial court. It is not claimed that
As stated in our opinion on the former appeal, the defense to the action was the failure of the insured to pay the dues and a certain assessment, which were due and payable June 20, 1910. Plaintiff admitted this failure to pay these dues and this assessment, but claimed that the assessment was unlawful under the terms of the contract, and the failure to pay the dues did not forfeit the policy, because the “call” for the same was coupled with the demand for the illegal assessment, and also because defendant had in its possession, at the time of the alleged default, money derived from the accumulated interest on its safety fund, which the contract provided should be distributed among the policy holders in reduction of their dues.
This question of the duty of the defendant to apply the insured’s proportion of the safety fund in payment of his dues in order to save a forfeiture, is not presented on this appeal. The main questions now before us for decision are: (1) Was the nonpayment of the assessment ground for forfeiture of the policy? (2) If it was not, was the failure of the insured to pay the dues payable June 20, a sufficient ground ?
To determine the legality of the assessment in question, we must look to the language of the contract, and to the facts relating to the' purpose for which the assessment was levied. By the terms of the certificate or policy, issued by defendant to lbs April 4, 1885, he-agreed to pay and was required to pay assessments proportioned to* the maximum indemnity provided for by the policy, which assessments, in the language of the policy, are to be “levied against the-herein named member to form a mortuary fund for the payment of all indemnity matured by deaths of members, which assessments, to be levied upon all the members in the department wherein this; certificate is issued, whose certificates are in force at the dates of such deaths, shall be made according to the table of graduated assessment ratios given hereon, and as further determined by their respective ages and the aggregate maximum indemnity at the dates of such deaths with due allowance for discontinuance of membership.’*
The facts relating to the levy of the assessment, for the nonpayment of which the policy was declared forfeited, are as follows:
The call for the assessment was sent to the insured May 2, 1910. The notice states that the assessment “is made to meet 145 deaths (as shown by accompanying list), benefits $323,919.95.” The list accompanying the notice contained the names of 145 deceased members, the claims of whose beneficiaries were included in the call and aggregated the exact amount of the assessment, together with the dates of their deaths, beginning September 28, 1909, and ending February 13, 1910.
The assessment was based upon conditions and data existing as of the date March 31,1910, and its preparation was begun April 1. On March 31, the mortuary fund, made up from the accumulations of prior assessments, amounted to the sum of $168,473.58. Of the death losses, to pay which the assessment was levied, and stated in the call, aggregating $323,919.95, there had been paid prior to March 31, $198,994.19, leaving $124,925.76 unpaid, a sum less by $43,-547.82 than the balance then in the mortuary fund.
It is plain, therefore, that all of the death losses, to pay which the assessment in question was levied, could have been paid out of this mortuary fund, without levying the assessment, and a balance of over $43,000 left in the fund. We think it clear that the necessity for this assessment and its validity must be determined by the condition of the so-called mortuary fund on March 31, and the amount of the death losses to pay which the assessment was levied, according to the notice sent to members. There were some death losses at that date which, though not used as a basis for arriving at the amount of the assessment, and not mentioned in the call, had been reported to defendant, and part of them approved. We hold that these should not be considered. The assessment was not levied to pay such losses,
We see nothing in the language quoted, or in any other provisions of the contract, 'that expressly or by necessary implication authorizes the insurer to accumulate a “mortuary fund” out of which to pay death losses that occur in the future. The whole sense of the contract is that an assessment may be levied to pay losses already sustained. Calling the fund obtained by an assessment a “mortuary fund” does not warrant the accumulation of such a fund for the payment of future death claims. This conclusion is strengthened by the long-continued and universal custom of the company to state in the notice of each assessment the names of the deceased members to
It is settled law that an assessment to pay future losses is illegal, unless the power is conferred by the contract; and we hold that the contract between the insured and defendant cannot be fairly construed as conferring that power. As it is clear that the assessment in question here was not necessary to pay accrued losses, but was in reality levied to pay losses that might be anticipated to occur in the future, it follows that it was unauthorized and could not be made the basis of a forfeiture. The case of Schultz v. Citizens’ Mut. Life Ins. Co. 59 Minn. 308, 61 N. W. 331, is decisive on the proposition that an assessment to pay future losses is void if the contract does not authorize an assessment for such purpose, and our decision that the contract does not authorize such an assessment is sustained by King v. Hartford, 133 Mo. App. 612, 114 S. W. 63, and Johnson v. Hartford, 166 Mo. App. 261, 148 S. W. 631. These cases involve the same form of contracts as the case at bar, and are directly in point. Other authorities on the proposition that an assessment in anticipation of losses is illegal, unless authorized by the contract, are People v. Babbitt, 7 Allen [89 Mass.] 236; Rosenberger v. Washington, 87 Pa. St. 207; Hogan v. Pacific, 99 Cal. 248, 33 Pac. 924. See also Bacon, Life Insurance (3d Ed.) § 377; Niblack, Benefit Societies, § 254.
This brings us to a difficult and perhaps doubtful question, said in the opinion on the former appeal to be an important one. This question was there stated [119 Minn. 116, 137 N. W. 290] to be “whether the insured was justified in failing or refusing to pay the dues because the notice was coupled with an illegal demand for the assessment.” In the solution of this problem it is not important that there is no evidence that the insured actually based his refusal to pay dues upon this ground. Defendant is seeking a forfeiture, and if there can be found a valid excuse or justification for the neglect, the beneficiary ought to be permitted to take advantage- of such excuse or justification, even though the failure of the insured was actually due to mere neglect, or, as quite probable, to illness.
In the former opinion, it was said that the solution of this question “might to some extent depend upon the question whether defendant was under obligation to give the notice, and whether the insured would have been justified in failing to pay until he received the same.” What was not clear when the case was here before is clear now; that is, that it was the long-continued and uniform custom of the company to give the insured notice of each demand for dues. While the policy did not expressly require such notice, it did not expresly say that notice was unnecessary. ' It did provide that a printed or written notice, addressed to the member, should be sufficient for all purposes, and reasons may be suggested for the adoption of the uniform custom to give notice. The exact dates for the payment of dues were not definitely fixed by the contract, though we do not say that a member might not figure out the dates when his “monthly or other pro rata instalments * * * for periods of less than a year” were payable. While the amount of the dues was fixed at $6 per year, or $1.50 per quarter, it appears that the insured might, at any time, be entitled to a reduction of this amount from his share of the interest from the safety fund. There is abundant ground, both on principle and on authority, for holding,
“special notice or quarterly call
No. 127.
*
“Herman lbs,
“105 Central Ave.,
“St. Paul, Minn.
“This call, which will he due June 1st, 1910, is made to meet 145-deaths (as shown hy accompanying list), benefits $323,919.95, and< expenses on your policy as follows:
“Por mortality call..........................$33 95
“Por quarterly dues to Sept, next.............. 1 50
“Credit ...................................
“Amount due..........................$35 45
“Payment will not be accepted later than June 5, 1910. * * *
“Unless the payment called for by this notice shall be paid to the-company at its home office by or before the day it falls due, the policy and all payments thereon will become forfeited and void.”
It is perfectly clear that this is a demand for $35.45, the assessment and dues, as one payment. The notice that unless “the payment called for by this notice shall be paid” on or before the day it; falls due leaves no room to doubt that a tender of the $1.50 for dues: would have been refused. Was the insured obliged to make this: tender ? True, the demand specified the amount of the dues; but it;
It is a rule of the law of tender that when the creditor demands an amount larger than he is entitled to, and refuses to receive anything less, a tender of the correct amount is waived. In other words, when it is clear that a tender would have been refused, the law does not require the doing of the vain and useless act of making such tender. 28 Am. & Eng. Enc. (2d Ed.) 7. A tender is waived where the tenderee takes any position which would render a tender, so long as the position taken by him is maintained, a vain and idle ceremony. 38 Cyc. 135; Gill v. Newell, 13 Minn. 430, 436 (462). The company in the case at bar clearly took the position that, unless-payment of the entire sum, assessment and dues, was made, the policy would be forfeited. It is still maintaining that position. It not only demanded more than it was entitled to receive, but expressly told the insured that, unless the entire sum demanded was paid, a forfeiture would result.
We feel fully justified in holding that a tender of the $1.50 would have been a “vain and idle ceremony” — a useless act. This conclusion is amply sustained by the authorities on the subject of tender. In addition to those already cited, we refer to the following: Weinberg v. Naher, 51 Wash. 591, 99 Pac. 736, 22 L.R.A.(N.S.) 956; Bowden v. Dugan, 91 Me. 142, 39 Atl. 467; Hamilton v. McLaughlin, 145 Mass. 20, 23, 12 N. E. 424. The case of King v. Hartford, 133 Mo. App. 619, 114 S. W. 63, sustains the position of plaintiff on this point, though the opinion does not state that there was a fixed amount payable as dues. The cases relied on by defendant are clearly distinguishable. Our conclusion on this branch of the caséis that lbs was not obliged to do the useless act of making tender of the amount of his dues, and that the notice given him, coupled as it was with a demand for the payment of an illegal assessment, was not a sufficient notice as to dues.
It is claimed that it was prejudicial error to exclude from evidence the decrees in the case of Dresser v. Hartford Life Ins. Co. in the superior court of New Haven county, Connecticut. It is also claimed that in excluding these decrees the trial court violated section
We are not able to see how these decrees have any material bearing on the issues in the case at bar; much less how they are controlling. The issues here are vitally different from those in the Dresser litigation. There was no question there of a forfeiture, nor of the legality of an assessment levied to pay specified death losses, when the balance in the mortuary fund was ample to pay all such losses. The right to hold a balance in the mortuary fund was affirmed, but not the right to forfeit a policy for nonpayment of an unnecessary assessment. Neither the issues nor the parties were the same as in the case at bar. The decrees are not even authority against plaintiff’s contentions here; much less are they binding on the principle of res ad judicata, or estoppel by judgment. This question is discussed and we think correctly disposed of in Johnson v. Hartford, 166 Mo.
Order affirmed.
On May 10, 1913, tbe following order was filed:
Per Ouriam.
It is ordered that tbe foregoing order of affirmance be amended by adding thereto, “and cause remanded to tbe court below, with ■directions to enter judgment for plaintiff upon tbe verdict.”