Fulton v. Stevens

Marshall, J. This case turns on the meaning of the insurance contract. It must go without question that if the facts were such as to permit the application of the doctrine-of practical construction, or estoppel thereby, the defend — 314 — ant could not be held liable for any of the assessments sought to be recovered in this case. Such would be the result of following the uniform course of the administration of the affairs of the insurance company by its officers, from the time of its organization; but as we view the contract of insurance, its provisions are clear and their meaning unmistakable, therefore such meaning must be taken as embodying the intention of the parties at the inception of such ‘Contract, and that intention must prevail. The familiar 'doctrine, that where the meaning of language is plain courts must hold to that, and not go outside and make contracts for parties in order to meet difficulties which they failed to .anticipate and provide against, is of universal application. The office of judicial construction, whether resorted to in order to give effect to practical construction or otherwise, has no legitimate purpose other than to'carry out the intention of the parties, which they sought to express by the contract when made. Therefore, after all, unless such intention can be determined from the contract itself, without violating the rules of language or of law, by the aid of the lights proper to be resorted to for that purpose, including that of the construction the parties gave to the contract when that is proper to be considered, it cannot be adopted •and judicially carried out as that which the parties had in mind at the outset. So, as said in Travelers' Ins. Co. v. Fricke, 94 Wis. 258, in effect, unless language is of doubtful, ambiguous, or uncertain meaning, the doctrine of practical construction has no application. Customary disregard of plain language, however long continued, does not furnish a rule to guide judicial construction. The contract in question, embraced in the certificate, the application therefor, and the by-laws and charter of the company, contains the following plain provisions: (1) An absolute, unconditional promise on the part of the assured to pay all assessments for which he may become liable, — 315 — within sixty days after the date of notice thereof; (2) that-when it shall become necessary to replenish the policy fund, an assessment for that purpose shall,be made on all the members of the company; (3) that each member shall be bound by the notice from the time of its deposit in the post office and delivery to the member, as provided by the by-laws, and he shall thereby become liable to pay the assessment referred to therein within sixty days after the date thereof; (4) that in case of failure to pay, the member shall forfeit all rights under his certificate of membership, and it shall be no longer binding on the company. Now, if we look only to the plain language of the provisions of the contract specially referred to, no reasonable controversy can exist but that the parties thereto intended that failure to pay an assessment within sixty days after the date •of notice thereof, given as required, should operate to terminate the membership of the defaulting party, but leave him legally liable, nevertheless, for the assessment, and for all •other assessments as well regularly made and noticed to him prior to such termination. That is all expressed in words too plain to require interpretation or construction. It must not be overlooked that the assured did not agree to pay assessments from time to time to cover death losses as they occurred, so no reason is perceived -why he should be liable merely because of the occurrence of deaths before the lapse of his membership. - What he agreed to do was to pay assessments made during the existence of his membership, to replenish the policy fund. .The regular making of an assessment for that purpose, and the sending of the notice-thereof, fixed his liability. No other element whatever entered into it. It appears from the record that a double assessment, so called, was duly made on the defendant on the 1st day of-June, 1896, due notice of which was given to him, dated on that day. He did not pay such assessment within sixty days — 316 — after the date of such notice, which expired on the 31st day of July, 1896, and his membership in the company then thereby terminated. After the making of such assessment,, and before the assured ceased to be a member of the company, a second double assessment was made June 15, 1896,. and another July 1, 1896, all aggregating $19.80. On the 1st day of August, 1896, the defendant was not a member of the company; nevertheless there was, on that day, another double assessment made against him, and on the 1st day of September following, a like assessment was made, all aggregating $13.20. The lower court gave judgment in plaintiff’s favor for the $19.80, and in defendant’s favor on the claim for $13.20 additional. That was in exact compliance with the plain letter and meaning of the contract, as, before stated. Many authorities are cited for our consideration, in support of views contrary to those above expressed, some by the plaintiff to the contention that defendant is liable for assessments made after the termination of his membership, and others by the defendant to the contention that the contract of insurance was unilateral in character, and that the termination of it by failure to pay extinguished all claims of the company to recover assessments. Such of the authorities as touch the question under discussion at all, coincide with the conclusion to which we have .arrived. A brief reference to a few of the most important' cases cited by counsel will clearly demonstrate that. In Ellerhe v. Barney, 119 Mo. 632, there was a controversy as to whether the contract contained a promise to pay assessments. The majority of the court held to the affirmative on that point. If the decision in that regard was right, the promise was not to pay for the benefit of a policy fund, out of which to pay losses generally, but to pay an assessment of $1.60 on the death of each member, happening during the membership of the assured. The scheme of insurance. — 317 — ■did not contemplate a policy fund as in this case. The liability under the contract was plainly fixed, not by assessments and notice thereof, but by the death of a member of the company in the class in which the assured was located by the terms of his certificate. The court held that the assured was liable to pay the assessment agreed upon for the ■death of each member, which occurred before his policy lapsed, according to the plain terms of the contract. The ■dissenting opinion by Chief Justice Blaox, concurred in by Justices Bbace and Buegess, cited confidently by the defendant here for reasoning to sustain the contention that the ■scheme of insurance under consideration contemplated payment of assessments as mere conditions precedent to a continuation of membership, and not compliance with legal liabilities, does not apply, because the premises upon which the learned judge based such reasoning do not fit this case. .He proceeded upon the theory that the contract there under •consideration did not contain a promise to pay assessments. The opinion as to the law is perfectly consistent with that of the court to the point that where there is an unconditional agreement to pay, there is a legal liability as to all calls made according to the terms of the contract during the life of the membership. After citing In re Protection L. Ins. Co. 9 Biss. 188, upon which the defendant here chiefly relies, the chief justice quoted from Bacon on Benefit Societies, as correctly stating the law, as follows: “ The payment of the premiums or assessments is only a condition precedent to the liability of the company. The assured does not promise to pay the premiums, and the company only promises to pay if it has received the agreed consideration, therefore •the assured may pay or not as he pleases. He has the perfect right to do either, and need give no excuse for his choice. If he does not pay the contract is ended. It follows, therefore, that the premium, or assessment is only, a debt when there is an absolute promise to pay embodied in the contractAs — 318 — there was such absolute promise to pay embodied in the contract under consideration, manifestly, that doctrine renders defendant legally liable, as determined by the trial court, for the assessments made before the expiration of his membership, and not liable for those made thereafter. In New Era L. Asso. v. Rossiter, 132 Pa. St. 314, the as-signee of the insurance company brought suit for unpaid assessments. The contract contained a promise to pay assessments for deaths happening during the life of his membership, payment of such assessment to be made within thirty days after mailing the notice thereof, showing a statement of the death for which it was made. The policy lapsed for failure to pay an assessment. The court held that, by unmistakable language in the contract, the assured was liable for all death losses which occurred before his membership terminated. In McDonald v. Ross-Lewin, 29 Hun, 87, the contrast. contained a promise to pay assessments, according to a schedule of rates, on the death of each member, happening during the membership of the assured, and a provision that such membership should cease upon failure to pay an assessment within the time required by the contract. The court held that the failure to pay, ipso facto, determined the membership, but left the member liable, nevertheless, for death losses which happened before such termination, whether assessments were made before or after that time. The decision went no further than the plain words of the contract, as under it the death of a member fixed the liability to pay an assessment, and there was an absolute promise to pay upon the happening of each such occurrence, while the assured remained in the company. Further consideration of authorities is deemed to be unnecessary. , We may safely venture to say that no case can be found, certainly none has been brought to our attention, which holds that a member of an insurance company can — 319 — escape payment of an assessment made during the life of bis membership, where the contract contains an absolute-promise to pay, or that supports the claim of liability for assessments made after the termination of the membership, where each call, under the scheme of insurance, is for the benefit of a policy fund out of which to pay death losses,, and the liability is fixed by the assessment and notice instead' of being made to pay pai’ticular death losses, and is fixed by the call for such purpose. All of the authorities cited on both sides, on both appeals, rightly understood, sustain the-conclusions we have reached, that defendant was liable, under the plain terms of his contract of insurance, for the assessments made while he was a member, and not liable for those-made afterwards. Such was the decision of the trial court. The judgment must therefore be affirmed on both appeals. By the Court.— The judgment of the county court is affirmed.