Brockway v. Michigan Mutual Hail Insurance

Sharpe, J. I cannot concur in the foregoing opinion. A verdict was directed for plaintiff. The proofs must therefore be considered in the light most favorable to defendant. I find the following facts to be established, and note wherein there is any dispute: 1. The defendant is a mutual company, its ability to pay claims being dependent upon its collection of assessments. 2. On March 14, 1912, plaintiff applied for membership and a certificate was issued protecting him against damage by hail to the amount of $700. 3. By the terms of this certificate, the defendant reserved the right to cancel it “at any time upon good and sufficient reason.” The by-laws, which it is conceded became a part of the contract, provided that: “The secretary may cancel or suspend a policy or any part thereof * * * for the nonpayment of [553] an assessment after the expiration of 30 days from the date of the notice of the same.” 4. Assessments are made as of November 1st in each year. Notice thereof is to be given the members by mail. The plaintiff paid his assessments for 1912, 1913 and 1914. Notice of assessment for 1915 was duly mailed to him. He claims he did not receive it. On May 1, 1916, the secretary suspended the policy of plaintiff for nonpayment. It was not cancelled. While assessments were not made against him in 1916, 1917 and 1918, notices thereof were mailed to him. He claims he did not receive them. He had the right to have the suspension removed at any time by payment of the amount of the delinquent assessments. He admits receiving a letter in March, 1919, notifying him that a statement of the amounts owing by him had been sent to a justice of the peace at Flushing for collection. He paid no attention to it. 5. On July 14, 1919, plaintiff sustained a loss by hail. The following day he went to the office of the secretary in Lansing and paid to Mrs. Gettle, the employee in charge thereof, the assessments for 1915, 1916, 1917 and 1918. The secretary was not present. Mrs. Gettle testified that plaintiff was on the list of suspended members; that he “said he wanted to be reinstated;” that after payment he said, “Now if I had a loss I would be paid,”- to which she replied, “No, but if you have a loss tomorrow you notify us and we will take care of you.” She further testified, “And then it dawned on me possibly that Mr. Brock-way had a loss. I said to him, ‘Have you had a loss by hail,’ and he answered, ‘We have not even had any rain.’ ” The plaintiff admits that he did not inform Mrs. Gettle of his loss. He testified: “I paid the $13.30 because I wanted to get my insurance under my policy. I would not have paid if I had not; I would have kept my money in my pocket.” [554] 6. The plaintiff’s name was again placed on the list of active members. A notice of the 1919 assessment was mailed to him. He remitted a postoffice order therefor. As suit by him was then threatened', the secretary, on his attention being called to it, returned the order to plaintiff, saying that he did “not think it quite right to take your assessment this year when you had a bad loss and could not recover on account of being four years in arrears when storm hit your crops.” Under these facts, I do not think plaintiff was entitled to recover. We m;ust not lose sight of the distinction between the suspension of a policy and its cancellation. If suspended, a member has the right to become reinstated at any time by paying all delinquent assessments. If his policy has been canceled, a new application must be made and a new policy issued. The doctrine of waiver is based on something said or done by the insurer or its failure to do some act which it was its duty to do to avoid a waiver by reason of which the insured is led to believe that he is still recognized as a member and entitled to rights under his policy. Staffan v. Cigarmakers’ Union, 204 Mich. 1, 7. What did the defendant say or do or omit to say or do on which this plaintiff relied to his disadvantage? It accepted payments of the assessments delinquent on his policy and reinstated it at his request. It sent him notice of the 1919 assessment. When he remitted therefor, the secretary returned it to him for the reason stated. How can it be said that these acts constitute such a waiver as renders the defendant liable for a loss incurred while the policy was suspended? Plaintiff’s failure to pay rendered him subject to suspension. He was suspended in May, 1916. He had no rights after suspension until he became reinstated. Edgerly v. Ladies of the Maccabees, 185 [555] Mich. 148, 162. He tendered payment and asked to be and was reinstated. While he at that time concealed the fact that he had suffered a loss during the period of his suspension, it would have been incumbent on the defendant to accept such payment and reinstate him notwithstanding such loss. He thereby became protected against future losses. It cannot be said that he relied on his reinstatement as entitling him to recover for a loss during the period of his suspension. He had no legal right to a recovery, and payment to him would have worked a hardship, if not a fraud, upon the members who would have been called upon to contribute thereto. The language of Mr. Justice Grant in Hill v. Insurance Co., 129 Mich. 141, 144, is pertinent: “It was the duty of the plaintiff to pay. He agreed that his policy and all rights under it should be suspended while he was in default. Under the ruling of the court, this right of suspension is valueless to the company, because any insured would pay his back premiums after a loss if by so doing he could reinstate his insurance and collect his loss. ' This is not a reasonable construction of this contract of insurance.” The conclusion reached is in harmony with the rule laid down in Williams v. Insurance Co., 19 Mich. 451 (2 Am. Rep. 95), and in the case just quoted from. I cannot but feel that the opinion of Mr. Justice Moore squarely overrules these cases. I have examined with care the decisions on which he relies. They are easily distinguished if we but bear in mind the distinction between the suspension of the policy of a member of a mutual company and an act of the officers by which a cancellation or forfeiture of the rights of the insured is claimed to have been effected. The judgment is reversed, with costs to defendant, and no new trial ordered. Steere, C. J., and Fellows, Stone, and Clark, JJ., concurred with Sharpe, J.