Geddes v. Ann Arbor Railroad Employees' Relief Ass'n

Bbooke, J. (after stating the facts). It is the contention of defendant that its motion for a directed verdict should have been granted. Plaintiff relies entirely upon the case of Lyon v. Insurance Co., 55 Mich. 141 (20 N. W. 829, 54 Am. Rep. 854). We are of opinion that that case is distinguishable and not controlling. There the insured, a brakeman, was earning variable wages, so that he might be excused for a failure to notice that no deduction from his pay had been made, while in this case Westerland was working for a fixed salary, and the fact that his premiums were not deducted could not well have escaped his attention. Again, in the Lyon Case there was an assignment by the insured [491] to the insurance company of so much of his wages as was necessary to pay the premiums. There was no such assignment in the instant case. There was an authorization to the railroad company to deduct the premiums, but the defendant company was given' no interest therein by assignment. It is the claim of plaintiff that it was defendant’s duty to see that the premiums were collected so long as the insured did not revoke the order for payment and had earned sufficient to cover the premiums. A sufficient answer to this claim is that the policy contract contains no such provision. The contract provides that: “If a member shall fail to pay any monthly premium when due, * * ■ * insurance shall immediately cease and this policy become null and void.” It is plaintiff’s further claim that Westerland was entitled to notice from defendant that his premiums were not paid. Again, the contract imposed no such duty upon defendant; but, if it had, notice would have been unnecessary because Westerland had actual knowledge of the fact. He knew that he was eárning a fixed sum each month, and he knew that he drew that full sum each month. Under the facts, he must be charged with knowledge that nothing remained in the hands of the railroad company out of which the premiums could be paid. It was said in Pacific Mutual Life Ins. Co. v. Walker, 67 Ark. 147 (53 S. W. 675): “Under no reasonable view of the law would Walker be allowed to hold the insurance company responsible for the nonpayment of his order when he left no funds out of which it could be paid.” See, also, McMahon v. Insurance Co., 77 Iowa, 229 (42 N. W. 181); Landis v. Insurance Co., 6 Ind. App. 502 (33 N. E. 990); Employer’s Liability Assurance Corporation v. Rochelle, 13 Tex. Civ. App. 232 (35 [492] S. W. 869); Bane v. Insurance Co., 85 Ky. 677 (4 S. W. 787). The defendant is a purely mutual organization designed to furnish protection to its members at cost. It has but two paid officials, the secretary-treasurer and his assistant, who are respectively paid the nominal salaries of $30 and $10 per month. The record indicates that it was the policy of defendant to deal leniently with its members, and that it did not forfeit policies for nonpayment of the premiums while the insured was sick or disabled. This rule or .custom cannot avail plaintiff, however, for, during the first four months of the life of the policy Westerland was under no disability, there were no “reasons beyond the control of the insured” to prevent the payment of premiums. It was clearly his duty during those months to have paid his premiums, and, not having done so, it seems to us that it would be a gross imposition upon his fellow members to compel them to pay over to the assignee of his estate and beneficiary the sums claimed. The judgment is reversed, and there will be no new trial. . McAlvay, C. J., and Stone, Moore, and Steere, JJ., concurred with Brooke, J. Ostrander, J. I cannot distinguish this case and Lyon v. Insurance Co., 55 Mich. 141 (20 N. W. 829, 54 Am. Rep. 354), and therefore think the judgment should be affirmed. Kuhn and Bird, JJ., concurred with Ostrander, J.