Farmers' Mutual Insurance v. Wenger

Mr. Justice Gordon delivered the opinion of the court, According to the testimony of John Strohm, the secretary of the defendant company, he called on Wenger, the plaintiff below, on the 26th of May 1876, for the purpose of collecting an assessment then due, and he then informed him that the company had inaugurated measures for the reduction of the valuation of certain properties, among which was his own, upon which the company held risks. That it was desired that the risk on his barn should be reduced from $525 to $300. Wenger expressed his dissatisfaction with this, and the conduct of the directors generally, and said he would go out of the company. Strohm. then told him he could do so at any time by surrendering his policy and paying up the assessments due. It was then arranged, in order to save Wengér a trip to Strohm’s place of residence, that he, Wenger, should leave the money, necessary to meet the assessments and the policy, with Jacob Hoffman. A few days afterwards, in the latter part of May or beginning of June, if the evidence of Hoffman be true, the plaintiff handed the money and policy to him with directions to hand them over to Strohm. As both parties had previously agreed that this deposit should be made with Hoffman for the company, [223] there is no question but that it was equivalent to a payment and surrender to the secretary himself. Now, one would suppose, from this statement of facts, that this was the end of this contract of insurance, and, so doubtless, it would have been had not the plaintiff’s barn burned in the month of July following. Certainly, there was no reason why this should not be so. The company proposed to reduce the amount of the risk; the plaintiff refused to continue his insurance if this were done; the result was the agreement to surrender the policy. The parties were competent to contract ; the consideration was good and sufficient, and surrender was made according to the agreement. To this, however, the court objected, section sixth of' the company’s by-laws, which reads: “ The liabilities of members shall commence and terminate at twelve o’clock on the day on which their names are entered, withdrawn or erased,” and held, that as the plaintiff’s name was not erased from the defendant’s books, his liability for future assessments continued, and-if he were not released neither was the company. In other words, the contract for the surrender of the policy was of no force until the plaintiff’s name was withdrawn from the books. This was a mistake; Wenger had nothing to do with the books; if he complied with his part of the contract by a surrender of his policy, which, of course, meant a release of the company, he had nothing more to do, and he was as effectually released from all future obligations to the company as though his name had never been on its books. Certainly, in such case, the defendant could not set up, as against him, that it had neglected that which it had agreed to do. If, as in the case of the Columbia Insurance Co. v. Masonheimer, 26 P. F. Smith 138, the letter of the secretary of the company informing the insured that his policy had been cancelled, when, in fact, such was not the case, sufficed to release him, much more would the solemn contract of the parties, fully executed except as to a mere formality on part of the company, have the effect to produce that results Furthermore, the court made a mistake in supposing there was anything resembling a forfeiture in this case. The transaction between the parties was one of contract, and by the terms of that contract their several rights are to be tried, hence there is no room for the interposition of a forfeiture. It follows that the first five assignments of error must be sustained. The others are dismissed as being without merit. The judgment is reversed, and a venire facias de novo ordered.