McCoy v. Northwestern Mutual Relief Ass'n, 92 Wis. 577

McCoy v. Northwestern Mutual Relief Ass'n

92 Wis. 577 | Wis. | 1896

MaRshall, J.

It clearly appears from the foregoing statement of facts that the contract which the appellant and the assured made, as evidenced by the application for and the certificate of membership, provides in clear, unmistakable ' language against liability in case of death by suicide or self-destruction ; but it is contended that, notwithstanding such is the case, the provisions in that regard do not form a part of the contract between the parties, because the by-laws of the association, at the time deceased was admitted to membership, did not authorize any such limitation upon its liability, and. that such by-laws must prevail over the express contract of the parties, in case of conflict. Such is the position of the respondent, as we understand it, and of the learned circuit judge before whom the case was tried at the circuit. If such is the law, obviously the judgment must be affirmed, because it is well settled that, if a contract for life insurance does not provide against liability in case of death by suicide or self-destruction, then such cause of death does not constitute a defense. Mills v. Rebstock, 29 Minn. 380; Darrow v. Family Fund Soc. 116 N. Y. 537; Fitch v. Am. Pop. L. Ins. Co. 59 N. Y. 557; Freeman v. Nat. Ben. Soc. 42 Hun, 252.

The articles of organization of the association did not con*583tain any prohibition against the acceptance of members under contract providing against liability in the event of death by suicide or self-destruction. So, at the most, the issuance of the certificate in this case was a mere violation of the bylaws, which would not necessarily affect the contract. Morrison v. Wis. O. F. M. L. Ins. Co. 59 Wis. 162. It was there held, in effect, that where the certificate of membership of a mutual benefit society is inconsistent with the by-laws of the association, the certificate is, nevertheless, binding upon the company according to its terms; distinguishing between the rule thus laid down and the rule in Luthe v. Farmers' M. F. Ins. Co. 55 Wis. 543, where a policy of insurance, issued in a manner prohibited by the charter of the company, was held void on that ground. To the same effect is Davidson v. Old People's M. B. Soc. 39 Minn. 303; also Fitzgerald v. Equitable R. F. L. Asso. 3 N. Y. Supp. 214, where it is held, in effect, that, in the absence' of fraud, a provision in a certificate of membership in a mutual life association will prevail over a clause in the by-laws of such association conflicting therewith and tending to limit its liability, though the application stipulates that such by-laws shall constitute a part of the contract. So in Union Mut. F. Ins. Co. v. Keyser, 32 N. H. 313, where it is held, in effect, that if a policy of insurance is issued in violation of the by-laws, if not prohibited by the charter, it is binding according to its terms on the corporation or association issuing it. Hirsch v. U. S. Grand Lodge O. B. A. 56 Mo. App. 101, cited to the contrary, appears to be in perfect accord with the foregoing.

While the decisions are not numerous on this subject, there is no substantial conflict, and we understand the general principle to be firmly established that though, generally speaking, a member of a mutual benefit association or insurance company is bound to take notice of its by-laws, even if not recited or referred to in the certificate of membership *584or policy, yet, when such certificate or policy and the bylaws conflict, so long as the contract as written is within the power of the association under its charter or articles of organization, it will prevail over the by-laws, and by it the rights and liabilities of the parties must'be determined. Niblack, Ben. Soc. & Acc. Ins. § 147.

It follows from the foregoing that the conclusion of the trial court, to the effect that the by-laws of the appellant must prevail over the application for and the certificate of membership, cannot be supported,, but, on the contrary, the latter must prevail and be held the measure of the liability of the association on the certificate, and that no recovery thereon can be had unless by reason of the facts it is estopped from insisting upon the contract as made and from setting up the cause of death as a defense:

It is claimed that the conduct of the association in its dealing with the deceased was such as to induce a belief on his part that, in the event of death by suicide, that fact would not be insisted upon as a defense, notwithstanding the provisions of the contract in that regard; that he relied upon such conduct by refusing to exchange his certificate for one of the new series, though repeatedly invited so to do, and twice paid assessments when the cause of death was suicide; and that it should now be estopped from having the benefit of any different position under its contract to the prejudice of the plaintiff. On this branch of the case much learning is displayed, and the general subject of waiver and estoppel in cases of forfeitures by breaches of conditions in contracts of insurance is ably discussed in respondent’s brief in support of the contention that appellant is estopped from insisting upon a forfeiture in this case; but we are unable to see how the settled rules under which it is held that a forfeiture or condition of forfeiture may be waived applies, here. What is insisted upon is not really the waiver of a forfeiture, or an equitable estoppel against insisting upon a *585condition of the policy, the violation of which would otherwise work a forfeiture. It is a misuse of the term to' so speak of the loss of benefits under the certificate in question. What is here sought is not to prevent a forfeiture, but to make a new contract; to radically change the terms of the certificate so as to cover death by suicide, when by its terms that is expressly excluded from the contract. We do not understand tha't the doctrine of estoppel or waiver goes that far. After a loss accrues, an insurance company may, by its conduct, waive a forfeiture; or by some act before such loss it may induce the insured to do or not to do some act contrary to the stipulations of the policy, and thereby be estopped from setting up such violation as a forfeiture; but such conduct, though in conflict with the terms of the contract of insurance and with the knowledge of the insured and relied upon by him, will not have the effect to broaden out such contract so as to' cover additional objects of insurance or causes of loss. To illustrate the principle here laid down, a policy of insurance against loss by fire cannot have ingrafted upon or added to it, by way of estoppel or waiver, provisions for insurance against loss by any other cause;. and no more can a policy of life insurance, expressly limited to payment of a sum of money in the event of death from causes other than suicide or self-destruction, be broadened out by the application of the law of waiver or estoppel so as to cover the cause excluded under the contract. While a forfeiture of benefits contracted for may be waived, the doctrine of waiver or estoppel cannot be successfully invoked to create a liability for benefits not contracted for at all.

Prom the foregoing it follows that the judgment of the circuit court must be reversed, and the cause remanded with directions to dismiss the complaint and render judgment in favor of the defendant for costs.

By the Court. — Judgment accordingly.