Northwestern Benevolent & Mutual Aid Ass'n v. Wanner

Lacey, J. We are of the opinion that the pleas are not good and that the court below did not err in sustaining a demurrer to them. It appears at the time Joseph Wanner took the certificate of insurance, there was no such by-laws as was afterward passed and numbered 17, and it is, therefore, no bar to the recovery of appellee if the insured should die by his own hand, act or procurement, sane or insane. But it is contended by counsel for appellant that Joseph Wanner was a member of the society as well as a contractor for insurance or benefit, and that by his certificate he took it on the condition that he should comply with the constitution and bylaws of the association, and the appellant having the power to make by-laws, might make and change them so as to make the contract of insurance contain important conditions and limitations touching appellant’s liability it did not contain before. We can not agree with this view of the law; undoubtedly the appellant might change its b)r-laws and even pass No. 17 but it could not do so in a manner to give the subsequent by-law a retroactive effect as to contracts and obligations entered in before that time, unless it could be clearly seen that such power was reserved. Nothing of the kind appears in the certificate in question. Joseph Wanner, according to the certificate, must comply with the by-laws, but what by-laws? Evidently the by-laws then in existence, but none to be passed affecting the vital principles of his contract. It might well be that he would be bound by any by law subsequently passed that only referred to mere regulations not changing his contract in substance. It is the general policy of all our constitutions and laws, that no law shall be passed invalidating a contract existing at the time of its passage. All implications are also indulged in against any subsequently passed law without express provision being even intended to refer to existing contracts. By-law No. 17 provides that, “death occurring by the hand, act or procurement of the member, whether voluntary or involuntary, sane or insane at the time, is notassumedby this association;” but this by-law does not, except by mere implication, refer to the holders of certificates already issued. We ought not to construe this language so as to refer back and affect certificates then existing, but rather so as to affect those issued thereafter. The words “not assumed by this association ” should be construed to read “ will not be hereafter.” Thus construed the by-law would not cover the case of the certificate here involved. The fact that James Wanner had notice of its passage could not enlarge its meaning. We can not distinguish the appellant from any other mutual insurance company. In all mutual insurance the shareholder participates in the benefits and profits, and is a recognized member of the company. Joseph Wanner had no more favorable position than this in the appellant company. The contract of insurance between a member of a mutual insurance company and the company has always been held to be as binding as though made with a stranger, with no more right to change it on the part of the insurer without the consent of the insured. In such contract the assured is acting for himself and in no part as the representative of the company. In Insurance Co. v. Connor, 17 Pa. St. (5 Harris) 136, it is said: “ A corporator in a mutual insurance company, like a stranger, may enter in a contract of insurance with it and his rights under the contract will be as fully protected as -those of a stranger. The remedies existing at the time of the contract for enforcing it against him, are all that can be resorted to. The company has no right without his assent to impose any new conditions,.affecting the contract to his injury, or by a by-law passed after the making of the contract forfeit his rights under it.” “ The rights of a party insured stands entirely free from such control.” See also Middlesex Turnpike Co. v. Swan, 10 Mass. 384; Protection L. Ins. Co. v. Foote, 79 Ill. 361. As to the other averment we need only remark that the fact that Joseph Wanner stayed in the company and was not called on for any assessments for the representatives of those who died by their own hand, would not invalidate his contract or change it. Those who died might have been holders of certificates issued subsequently to the passage of by-law No. 17; nor could it make any difference in any event. As to the other plea, we need only remark that the impairment of Joseph Wanner’s health by act of suicide is not one of the immoral practices within the meaning of the certificate covenanted against by the assured. Another point is made that the demurrer should have been carried back and sustained to the declaration. We do not think this point is well taken. It was the duty of the appellant to proceed- to collect these assessments upon receipt of the notice of the death of the holder of the certificate and pay the amount collected over within sixty days to appellee. This the declaration avers it utterly refused to do, or to even try to collect any of the money, or to ascertain, by giving notice, how much could be collected. It appears that appellant denies all liability. Its covenants were broken in every particular. But, it is said, suit in covenant could not be maintained for the reason that it can not be known whether 82,500 could he collected out of its members besides the costs attending the collection and paying over the money to appellee. But the declaration shows that the assessment provided for by the by-laws and rules of the said association would more than make up the above amounts. We think that the presumption is, that enough would have been paid to satisfy in full the appellee’s claim as against appellant, who utterly refused to make any effort. Again, every day’s delay might endanger and lessen the amount that could be collected, if prompt action were had. We think the declaration is sufficient and that an action in covenant will lie. It might remain to the defendant to plead and show that the amount that could be collected under the certificate and by-laws would not amount to the sum of 82,450. This they utterly refused to do, but stood by the pleas in question. There are some decisions to the contrary, but we can not hold otherwise than that covenant will lie on this certificate under the facts as averred. For an interesting opinion see one delivered by the late United States District Judge, S. H. Great, in Lueder’s Exrs. v. Hartford Life and Annuity Co., 12 Fed. Rep. 71. The case of Covenant Mut. B. Ass’n of Ellinois v. Sears, 114 Ill. 108, is not in conflict. It was there simply held that a court of equity had jurisdiction, not that a court of law would not have. The judgment of the Circuit Court is therefore affirmed. Judgment affirmed.