National Mutual Aid Society v. Lupold

Mr. Justice Sterrett delivered the opinion of the court, October 4th 1882. -The charter of the plaintiff in error, adopting the statute of the state of Ohio under which it was organized, declares, “ The purpose of the association shall be the mutual protection and relief of-its members, and for the payment of stipulated sums of money to £he families and heirs of deceased members,” and provides that “ if a member dies within the period named in his certificate the amount shall be payable to his legal heirs, or any person designated in the certificate or by lfis will.” In these [118] particulars, the certificates of membership or contracts of insurance on which the suit was brought conform to the charter; and, among other things, it is expressly declared therein that each certificate is’issued by the association and accepted by the assured upon certain specified conditions, one of which is that it “ may be assigned and transferred only by and with the consent of the association endorsed thereon.” The right of the contracting parties to thus prohibit an assignment of the certificate without the written consent of the association cannot be seriously doubted; and in view of the fact that the sole purpose of the association is “ the mutual protection and relief of its members,” the propriety, if not the necessity, of such a condition is equally clear. The personal character of each holder of a certificate, and the interest he has in the life of the person thereby insured, are essential elements in the contract of mutual indemnity. The obvious tendency of an unrestricted right of transfer would be to create interests directly hostile to those of the regular membership. It is therefore clear that the condition is an essential feature of the contract, and the association has a right to insist on the benefit of the protection it was intended to afford. The certificates in question, based on applications of Sarah M. Snyder, were issued to her in November 1880, and four months thereafter she died testate, devising and bequeathing all her property, real, personal, and mixed, to her friend Sarah Rassler. The undertaking of the association, as expressed in the certificates, was to assure the life of Miss Snyder in a specified sum, and to pay the same, in accordance with its rules and regulations, to “ herself or any person designated by her will,” coupled with the express condition that the certificates, and of course any rights accruing thereunder, should not be assigned or transferred without the written consent. of the association. The plaintiff below, claiming the certificates by virtue of an assignment dated a few days after they were issued, furnished proofs of death, etc., and,.upon the refusal of the association to recognize his claim, brought suit in his own name. The question raised by the second point of the defendant below was whether, in view of the condition above recited, the action could be maintained. It is not pretended that written consent to the assignment was ever given, but it was contended there was evidence tending to show that the association had waived literal compliance with the condition, and recognized the plaintiff below as the owner of the certificates by receiving from him assessments after the death of Miss Snyder. Receipts for payment of assessments were produced, and upon that testimony the learned judge submitted the question to the jury. In this we think there was error. The assessments due the association might be paid by any one, and the fact that they were received [119] from a volunteer or any one else did not affect the contract. In short, there was nothing before the jury to-warrant them in finding that the condition in question had been waived or that the plaintiff below had been recognized as assignee of the certificates, and they should have been so instructed. It is claimed, however, that the suit was rightly brought under the Act of March 14th 1873, Purd. 1799, pl. 28, authorizing assignees of life, fire and marine insurance companies to sue in their own name. This would undoubtedly be so ,if the association had assented to the transfer; but when it is made an express condition of the contract itself that the certificates shall not be otherwise assigned or transferred, the act referred to does not apply. The contention that the association is not an insurance company within the meaning of the Act of 1873, cannot be maintained. All that was decided in Commonwealth v. The National Mutual Aid Association, 13 Norris 481, was that the corporation was, excepted from the operation of the Act taxing foreign insurance companies. Judgment reversed,-