Lilja v. Standard Accident Insurance

Ostrander, J. (after stating the facts). Whether defendant is liable depends upon the contract. It is a contract for indemnity, and its terms and provisions, if uncertain in meaning or contradictory of each other, must be given a meaning and construction most favorable to the insured, and to the plaintiff. The fact upon which nonliability is rested is that the insured did not work for the Chicago & Northwestern Railway Company upon or after the date of the policy. The provision of the policy relied upon is: “No claim for injuries sustained during any period for which its respective premium has not been actually paid in full shall be valid under this policy, except in case of just claim for injuries sustained before the end of the month from the wages of which first premium is to be deducted, as provided in said order, but no claim shall be valid in any such case if the insured shall have left the employment of the employer named in the order [385] without having earned in the month designated therein, sufficient wages to pay said first premium, nor if he shall have collected or disposed of the wages earned in said month, so that there shall not remain sufficient wages for the payment of said premium.” The policy, in terms and generally, provides certain indemnity for a period beginning at 12 o’clock noon standard time June 29, 1910. It is issued without payment of the first premium and upon the express agreement that the premium for the months of July and August may be paid out of wages earned during July. If nothing happens to the insured during the month, and if the premium is for any reason not deducted from his wages, “the insurance shall cease at the termination of the month.” These are some of the provisions of the policy which support the conclusion that it was intended that the policy should be in force and effect on June 29th and each day thereafter until the end of July, and thereafter in force if the first premium installment should be paid out of wages earned by the insured during July and deducted from his pay for that month; that credit was to be extended. And there is nothing in the policy to indicate that defendant would not have accepted, at any time, cash for the unpaid premium, whether the insured earned the money at one place or another, or paid it out of his savings. There is no direct prohibition of change of employers. If, however, we apply the language first above quoted according to the meaning given it by the defendant, the policy contract is this: There is no indemnity if the insured leaves the specified employment before.he earns $3.90 in the month of July. There is no indemnity if the insured remains in the specified employment during July until he earns $3.90 or more, if before he is injured he disposes of all his wages. On the other hand, if the insured earns $3.90, leaves it with the designated employer to pay the order he has given, quits the employment, and is injured, the policy is in force; or, if he remains in the designated employment and is killed, or otherwise injured, having [386] $3.90 in wages due him, the policy is in force. In short, no credit whatever is extended. No indemnity is promised to one who is killed on or after June 29,1910, who has not earned, in July, the amount of the first premium, which amount is uncollected and undisposed of and due from the specified employer when the injury occurs. The application contains no clause or provision with respect to change of employment, or any intimation that failure to earn, in a specified employment, in the month of July, sufficient wages to pay the first premium will avoid the policy applied for. On the contrary, the effect of the provision is that credit for a month is given for the premium exacted for the first insurance period, and, if an injury occurs during the month, or a sickness commences during the month, the premium for that and for succeeding periods is to be deducted from the amount due the beneficiary under the policy. The applicant does not agree in the application, as he does in the order or assignment of wages, that neither he nor his beneficiary will present a claim for injuries arising during the first month if he has left the employment designated in the order or assignment of wages, -and does not agree that, if he shall not have earned in a specified employment a sum equal to the first premium, or, if he has disposed of wages earned, neither he nor his beneficiary will present a claim for injuries received during the month. But the application refers to the order, and the policy is in terms issued in consideration of both. No doubt can exist with respect to the details of the transaction. The instruments do not contradict each other. Quite the contrary. It cannot be said that the policy contains provisions not included in the application. Therefore we cannot, as we are asked to do, apply the rule here which was applied in Dailey v. Accident Ass’n, 102 Mich. 289, 299 (57 N. W. 184, 26 L. R. A. 171), and in Robinson v. Benevolent Society, 132 Mich. 695, 700 (94 N. W. 211, 102 Am. St. Rep. 436). I also think there is no ambiguity in the language of that provision of the policy relied upon by defendant, and [387] have already stated what appears to be to me the clear effect of the provision. No question of waiver appears to me to be involved. The doubt I'have had concerning the proper disposition of the case arose from the fact that an insurance period is made to begin June 29th, and apparently a premium is exacted for a period beginning on that day when, according to the other provisions of the policy, no risk was or could be assumed by defendant until some time in July. If a liability or risk beginning June 29th at noon was charged for and was assumed, what was the nature and extent of it ? If the insured had returned to work for the Chicago & Northwestern Railway Company during the month of July, and, having a proper credit for wages earned, had been killed, would defendant in such case be liable? These questions are not presented by counsel except as the word forfeited is applied and the idea of a forfeiture is made use of in argument. They have occurred to me in considering whether the particular policy was ever in force. I am convinced that, however they may be answered, plaintiff’s intestate did not perform, on his part, the conditions necessary to enable himself or plaintiff to demand the contract indemnity. No error was committed in directing a verdict for defendant, and the judgment below is affirmed. Moore, C. J., and Steere, McAlvay, Brooke, and Stone, JJ., concurred. Blair and Bird, JJ., did not sit.