Lane v. Insurance Co.

WaleeR, J., after stating tbe case: It is conceded that tbe plaintiff, under tbe terms of tbe contract of insurance, [58] had forfeited his policy and consequently his membership, by the non-payment of his annual dues. He had no right to be restored to his former relation without the consent of the defendant, and then only upon the terms and conditions prescribed by it- There is a provision in this policy by which the plaintiff could be reinstated as a member and policyholder, but the condition precedent was ■ imposed that his application for reinstatement shall first be approved by the president and medical director of the company, and that then he shall give reasonable assurance that he is still in good health. It seems clear to us that the approval -required in the ease is something more than a mere ministerial act and involves the exercise of judgment and discretion. State v. Smith, 57 Pac., 449. The word “approve” is “to regard or pronounce as good; think or judge well of; admit the propriety or excellence of; be pleased with; commend.” Webster’s Intern. Diet. ;'l Words and Phrases, Jud. Def., 475. In the absence, certainly, of any showing that the approval of the officers has been fraudulently withheld and that their denial of the application is purely arbitrary, we do not see why their refusal to reinstate the plaintiff is not fatal to his right of recovery in this action. We are not called upon in this case to say under what circumstances, if any, we would decide that the action of the officers designated to pass upon' the application of a delinquent member1 could be investigated, with a view to ascertain whether they have exercised their judgment properly or have unreasonably deprived him of any right to which he is entitled under the terms of his contract and the by-laws of 'the company. Where there is no suggestion of fraud or other legal wrong, there can be no valid reason why the applicant should be permitted to attack the soundness of their judgment or the justness of their conclusion. We must hold it fir be right, and unassailable in any such manner, because the parties have solemnly agreed that [59] tlie matter shall be decided in that way, and we have no power to change their contract; and, besides, the power lodged with those officers is consistent with the purposes of the organization, and its exercise is necessary for the protection of the rights of other members and is not otherwise at all inconsistent with reason and justice. A -provision for approval by officers most likely to know the facts is one which would naturally be suggested to those engaged in the prudent management of the affairs of the association as essential to conserve the interests of all parties concerned. The validity of such a clause in policies of this kind has been sustained by numerous authorities, and there are none, we believe, to the contrary. 2 Joyce on Ins., sec. 1276; 2 Bacon Ben. Soc., sec. 385c; Butler v. Grand Lodge, 146 Cal., 112; Saerwin v. Jamon, 65 N. Y., Suppl., 501; Coniff v. Jamour, ibid., 317; Brun v. Supreme Council, 15 Col. App., 538; McLaughlin v. Supreme Council, 184 Mass., 298. As the policy had been forfeited and plaintiff’s connection with the defendant had been severed by his own default, he had no right to be readmitted to membership, but his reinstatement was then dependent upon the mere favor of the company, which cordd be extended to him subject to such terms as it deemed necessary for its protection. The very question was decided in Harrington v. Keystone Assn., 190 Pa., 77, in. which it appeared that the executive committee was “empowered” to reinstate a delinquent member. The Court there said: “Conceding, for the purpose of argument, that her application was in time, and that she complied or was ready and willing to fully comply with all the terms and conditions of the by-laws above quoted, it does not follow that the committee was bound to reinstate her to membership in the association. While the by-laws empowered them to grant her request, they were not bound nor could they be compelled to do so. It neither clothed her with any legal or equitable right, nor did it impose any duty or obligation [60] on tbe association tbat would enable her, as a delinquent member, to maintain tbis action.” While it may not be necessary for us to go to tbe extent, tbe Court did in tbat case, we yet tbink our case is stronger than tbat one so far as tbe discretionary nature of tbe power is concerned. In tbe case of Lovick v. Life Assn., 110 N. C., 93 (cited and relied on by tbe plaintiff’s counsel), tbe policy provided that tbe delinquent should have tbe “opportunity for reinstatement on similar conditions,” tbe context showing clearly that the term “similar conditions” bad reference to the payment of past-due premiums, assessments, and other indebtedness. Ey opportunity we mean- “fit or convenient time; suitable occasion; time or place favorable for executing the purpose or doing tbe thing in question.” Webster Int. Diet. It was, therefore, properly held in Loviclcs caso tbat if tbe plaintiff seasonably tendered tbe back dues, he was entitled to reinstatement, and, being thus entitled, be could recover tbe premiums paid, if tbe company refused to reinstate him. There was nothing in tbe policy then being construed which required tbe approval of tbe company or any of its officers as a condition precedent to tbe reinstatement or tbe exercise of any discretion or judgment. Tbe Court charged in tbis case tbat if tbe plaintiff applied for reinstatement and was refused after be bad furnished proof of bis good health, tbe first issue should be answered “Yes.” In tbis there was error. Tbe instruction excludes altogether from tbe consideration of tbe jury tbe question of approval by the president and medical director, and makes tbe recovery depend entirely upon tbe application and proof of good health, contrary to tbe very terms of tbe policy, and without any reference to tbe other valid provisions of tbe bylaws. Tbis of itself entitles tbe defendant to a new trial. But as there was no evidence to warrant a verdict for tbe plaintiff, tbe Court should have granted tbe defendant’s motion to nonsuit, and dismissed tbe action, and there was [61] error in refusing to do so. It is not necessary now to discuss tbe interesting question presented by tbe defendant’s exception in regard to tbe statute of limitations, in view of tbe decision we bave already made, tbat there bas been no revival of tbe policy. Error.