Susquehanna Mutual Fire Insurance v. Swank

Mr. Justice Paxson delivered the opinion of the court, December 30th 1882. This was a suit against a member of a mutual fire insurance company to recover an assessment regularly made to cover losses and expenses incurred during the life of the policy. The policy was issued to the defendant on June 9th 1877 in pursuance of an application in writing made by the defendant on June 1st 1877. The policy was sent to and accepted by him. In August or Septenlber of the same year an assessment [22] of $24 was made upon his policy, which he paid under protest. The assessment for which this suit was brought was made September 13th 1878 for the sum.of $39, and defendant notified to pay the same on September 16th of the same month. Payment was resisted upon the ground that the defendant had been told by the company’s agent at the time lie applied for insurance, that he would not be liable to any assessments ; that he, the agent would take his application upon “the annual interest plan,” under which no assessments would be made. His testimony and that of the agent to this effect was admitted in evidence against the objection of the plaintiff. The. application was for insurance on the ordinary assessment plan. It was in writing, signed by the defendant, witnessed by the agent. It contains this distinct promise to pay assessments: “ For value received and in consideration of a policy of insurance to be issued by the Susquehanna Mutual Fire Insurance Company of Harrisburg, Pa., upon the approval of my application for insurance in said company, of this date, I promise to pay the said company such sum or sums of money, and at such time or times, as the board of directors of said conipany may, in conformity with the rules and by-laws require, payable within thirty days after notice.” The insurance policy sent to and accepted by the defendant recited the giving of a premium note, and his agreement to pay assessments. The defendant retained the policy without objection made to the company until October 14th 1878, which was about oiie month after a second assessment had been made. It is true he sent the policy to the agent in September or'October 1877, and informed him he ought not to pay any more assessments. The agent sent it to the company on October 14th 1878. On October 17th the defendant was notified by the company that they held the policy subject to his order; that they would not cancel it nor surrender his note.' The sending of the policy to the agent was not a surrender to the company: Buckley v. Columbia Insurance Company, 2 Norris 299. The agent testifies: “My authority was to receive applications and send them to the company.” It is manifest therefore, that the defendant retained his policy without objection made to the company from its reception in June 1877, until October 14th 1878. There is no room for the allegation that a fraud was practiced upon him by reason of which he was induced to sign the application. The most that can be said is that he wanted an insurance upon the “ annual interest plan ” and was told by the agent that his policy would be of that character. It appears that the company insured in three modes, viz: 1. The assess [23] ment plan; 2. The annual .interest plan; and, 3. The deposit plan. Assuming all that is claimed by the defendant it does not amount to a defence. The application which he signed was as plain as language could make it, and culled for the assessment plan. If he read the paper when he signed it lie must have known its character. If he signed the application without reading it his act was inexcusably negligent. In such case there was the more necessity for reading his policy when he received it. Had he done either he would have seen that he was insured upon the assessment plan, and the mistake, if any, could and doubtless would have been corrected. But he retained it, as before stated, and did not notify the company for sixteen months. -During all of this time he had the benefit of the insurance. In case of loss the company would have been liable. Not only so, other parties may have insured upon the faith of his liability to assessment upon his premium note. An instrument may be reformed in cases of fraud, accident or mistake, but where the'mistake was the result of'the supine negligence of a party who sleeps upon his rights until other duties and responsibilities have grown up, the law will not help him. We sustain all of the assignments of error. Judgment reversed and a venire facias de novo awarded.