Voss v. Northwestern National Life Insurance

The following opinion was filed November 10, 1908: Keewin, J. Several contentions are made by appellant as grounds for reversal, and among others that the court — 500 — erred in failing to find, as requested by defendant, tbat Eer-dinand Yoss was the agent of plaintiff in the insurance matters and that he and plaintiff accepted, adopted, and ratified the by-law of November 13, 1902, and elected to pay the premium provided by the policy and have it commuted accordingly. If the foregoing contentions are sustained no, others need be considered. There can be no doubt upon the evidence that the insuréd acted as the agent of the plaintiff in all matters regarding the policy, and further it appears-that plaintiff had knowledge of the material facts. The evidence shows that the insured had entire charge of the matters for his wife and that she left everything to her husband,, the insured. Conceding, as contended by respondent, that the passage of the by-law constituted a breach or repudiation of the insurance contract assumed by appellant, we approach the question whether the respondent waived the breach, kept the contract alive, and consented to abide by the by-law. The respondent, by bringing suit upon the breach, seeks to> avail herself of the benefits of it after standing upon the contract for a period of four years. Counsel contends that in ' inaking the payments respondent was standing upon the contract; but that position is not consistent with the present suit, based upon the breach committed four years before. Under the circumstances of the case disclosed by the record the insured knew that the premiums were received under the by-law, which provided for the payment of the lesser premium referred to in the by-law and reduction of the insurance named in the policy proportionately. He therefore could not continue to make payments without objection for four years and then claim the benefit of the alleged breach. To permit this would be to suffer the insured to assume the double role for a period of four years of breach and no breach,, as might best serve his or the plaintiff’s purpose. That a party cannot affirm the contract and take advantage of the breach at the same time is well settled. Woodman v. Blue — 501 — Grass L. Co. 125 Wis. 489, 103 N. W. 236, 104 N. W. 920. If, as claimed by respondent, she was simply performing her contract during the four years she made payments, she cannot now avail herself of the breach occurring four years be-* fore, during which time she has kept the contract alive, according to her contention in this court as well as below. Supreme Council v. Lippincott, 134 Fed. 824; Wells v. Hartford M. Co. 76 Conn. 27, 55 Atl. 599. The election to take advantage of a breach must be promptly made. Smith v. Georgia L., S. & B. Co. 113 Ga. 975, 39 S. E. 410; Kilgore v. Northwest Texas B. E. Asso. 90 Tex. 139, 37 S. W. 598; Clymer v. Supreme Council, 138 Fed. 470; Woodman v. Blue Grass L. Co. 125 Wis. 489, 103 N. W. 236, 104 N. W. 920. This rule is peculiarly applicable in mutual insurance contracts, where the insured practically is on both sides of the contract, as insurer and insured. In the instant case about four fifths of the policy-holders complied with the bylaw. It was passed, obviously in good faith, to maintain the solvency of the company. In fact, the whole scheme, beginning with the contract of consolidation and ending with the passage of the by-law, appears from the record to have been •carried out for that purpose. The insured and respondent had notice of such purpose, knew the company was run on the idea that the by-law was valid, and it was their duty, in justice to other members of the defendant mutual company, to seasonably elect whether they would treat the passage of the by-law a breach or not. Borgards v. Farmers’ Mut. Ins. Co. 79 Mich. 440, 44 N. W. 856; Evans v. Southern T. M. R. Asso. 76 App. Div. 151, 78 N. Y. Supp. 611; Reynolds v. Supreme Council, 192 Mass. 150, 78 N. E. 129; Pain v. Société St. Jean Baptiste, 172 Mass. 319, 52 N. E. 502; Smith v. Georgia L., S. & B. Co. 113 Ga. 975, 39 S. E. 410; Kilgore v. Northwest Texas B. E. Asso. 90 Tex. 139, 37 S. W. 600; Supreme Council v. Lippincott, 134 Fed. 824; Foss-Schneider B. Co. v. Bulloch, 59 Fed. 83. — 502 — It is insisted by attorney for respondent that the appellant ■was not prejudiced by the delay in failing to rescind, and he bases his contention upon the doctrine- of estoppel. Here the question is not one of estoppel, but waiver. And while there is considerable confusion in the books.respecting the use of these terms indiscriminately, there is a wide difference in their meaning in the law as ordinarily applied. A waiver is the voluntary relinquishment of a known right, benefit, or advantage. Pabst B. Co. v. Milwaukee, 126 Wis. 110, 105 N. W. 563; Stewart v. Crosby, 50 Me. 130; Cowenhoven v. Ball, 118 N. Y. 231, 23 N. E. 470. Voluntary choice is the essence of waiver, and the doctrine. of waiver is not necessarily predicated upon estoppel. Dailey v. Kennedy, 64 Mich. 208, 31 N. W. 125; Cassimus Bros. v. Scottish U. & N. Ins. Co. 135 Ala. 256, 33 South. 163; Pabst B. Co. v. Milwaukee, supra. Rut if we were to apply the principles of estoppel to the case in hand we think the respondent could not escape. Assuming, as insisted by respondent, that there was a repudiation in November, 1902, which justified rescission, the insured and the plaintiff continued to stand upon the policy of insurance, claiming the benefits of it without paying the increased premium, while the appellant was carrying the risk for the full value of the policy, while if rescission had been promptly made the appellant would only be liable for the, damages caused by the breach. In other-words, upon the respondent’s theory the plaintiff could, during the four years which elapsed between the date of the alleged repudiation and the commencement of this action, have stood on repudiation or no repudiation as best served her purpose. We cannot assent to such a proposition. Supreme Council v. Lippincott, 134 Fed. 824; Clymer v. Supreme Council, 138 Fed. 470. Point is made by respondent that the insured or plaintiff did not have knowledge of the effect of the by-law until 1907. This position upon the record is clearly untenable. It is — 503 — not denied but that the insured received a copy of the bylaw and the letters referred to in the statement of facts in 1903,' and also received notices as premiums became due, stating amounts, receiving one in February, 1903. These papers informed the insured fully of the increase in premiums and the effect of paying the rate mentioned in the policy as well as the larger rate. The insured also received and retained the policy of reinsurance. He cannot be permitted to say that he did not know the contents of these papers. Bostwick v. Mut. L. Ins. Co. 116 Wis. 392, 89 N. W. 538, 92 N. W. 246; Kruse v. Koelzer, 124 Wis. 536, 102 N. W. 1072. Counsel for respondent cites over 400 authorities, some of which he frankly admits he has not examined. We have spent much time • and labor upon them. Those strongest in support of the position of counsel for respondent on the question upon which the case turns are Williams v. Supreme Council, 80 App. Div. 402, 80 N. Y. Supp. 713, and Smith v. Supreme Council, 94 App. Div. 357, 88 N. Y. Supp. 44. In the first case there was clearly no waiver. The premium was paid under protest, the insured standing upon the policy as originally made. Besides, there was a flat reduction in the amount of the benefit from $5,000, as provided in the policy, to $2,000. In the latter case (Smith v. Supreme Council, supra) there was a similar cut, and the action was brought upon the policy after death of the insured. It also appears, as stated in the opinion, that the insured did not have knowledge of the change and hence there could be no acquiescence or ratification, and that, since he had no notice of the change, his contract rights could not be affected by it on the theory of acquiescence, ratification, or estoppel. Moreover, the opinion is in direct conflict with Evans v. Southern T. M. R. Asso. 76 App. Div. 151, 78 N. Y. Supp. 611. We do not decide whether the passage and attempted enforcement of the by-law was a breach of the contract; but, as — 504 — suming that it was, we axe convinced upon the whole record that the plaintiff and insured waived the right to maintain an action because of such breach, and therefore the judgment must he reversed. By the Court. — The judgment below is reversed, and the action remanded with instructions to render judgment for de^ f endant dismissing the action.