Burkheiser v. Mutual Accid. Ass'n of Northwest

JENKINS, Circuit Judge (after stating tbe facts). The correctness of the ruling is dependent upon the proper construction to be given to tbe contract of insurance in question. If liability for an accidental injury came to an end when Mr. Burkheiser, by reason of default in payment of tbe assessment, ceased, to be a member of tbe association, the instruction was correct. If, however, liability for an accident occurring during the membership in tbe association continued, notwithstanding tbe cessation of membership after the accident, then the instruction was wrong, and the court should have directed a verdict for the plaintiff. Tbe policy insures against personal bodily injuries effected during tbe continuance of membership in this insurance through external, violent and accidental means. Tbe language of tbe contract is plain and unambiguous. It was clearly designed to effect the object of tbe association, which was to indemnify for injury sustained during membership. The consideration paid by tbe assured is for such pro lection. Tbe injury which resulted in the death of Mr. Burkheiser occurred during such membership. The accidental injury was the cause; tbe death, the consequence. Tbe contract indemnified against injury produced by accident as the operating canse, and occurring during membership. The contract with respect to liability of the company bad relation to the time of the happening of the accident, not to the time of the final outcome of tbe Injury, or to the time when liability should be discharged by payment. Tbe liability of tbe association became absolute upon tbe occurrence of the accident, the amount of indemnity and the person to whom it should be payable being contingent upon (lie character and result of the injury sust tained; as to tbe plaintiff, contingent only upon the death of tbe assured within the stated time. It was not contingent upon continuation of membership, either within tbe letter or spirit of the contract. There was no obligation on the part of tbe assured to continue in membership after an injury, nor does his failure so to do result in forfeiture of indemnity for injuries theretofore received, or in discharge of liability theretofore incurred. We search tbe policy in vain for a suggestion that that liability should be released or 818 discharged if, through default in payment of an assessment, the assured should, after the incurring of the accidental injury, cease to he a member of the association. By failure to honor the assessment, he indeed ceased to be a member of the association, and could no longer look to the company for indemnity for accidental injury thereafter occurring; but by no term of the contract and by no provision of the by-laws does such cessation of membership work forfeiture of rights accrued, or release the company from legal liability incurred under the policy during continuance of membership. The membership ceases; the legal liability for previous accidental injury remains. By one condition of the policy, it was competent for the association to cancel the certificate of membership at any time upon refunding paid unexpired assessments, or at the expiration of time covered by any one paid assessment. Gan it be claimed that the association under this provision could, upon complying with its condition, absolve itself from liability for an accident occurring previous to such cancellation? We think not. Cessation of membership, whether voluntary or involuntary, operates prospectively, not in derogation of acquired rights or in release of antecedent liability. This view is impliedly sustained by that provision of the eighth by-law of the association above quoted, to the effect that a reinstated member shall not be entitled to indemnity for injuries occurring in the interval of time between default and reinstatement. It recognizes the liability of the association to respond for accidental injury sustained during the membership, notwithstanding subsequent severance or interruption of membership relation. The case of Klein v. Insurance Co., 104 U. S. 88, has no pertinency here. There default upon an ordinary life policy of insurance occurred before the death of the insured. By the terms of such contracts, the insurance is against death occurring during the life of the policy, lapsing upon default in payment of the premium. The case at bar is quite different. Here the accident—which is like to the case of death in an ordinary life policy—occurred during the life of the policy, and liability attached immediately upon the occurrence of the injury. It is further to be observed that if the language used in this policy or certificate can fairly be said to admit of two interpretations, and to be of doubtful construction, the court should construe the provisions of the contract strictly as respects the company, and liberally as regards the insured, because the language employed is that of the insurance company. If the construction be doubtful, or the meaning obscure, it is the fault of the company. National Bank v. Insurance Co., 95 U. S. 673, 678; Grace v. Insurance Co., 109 U. S. 278, 282, 3 Sup. Ct. 207; Moulor v. Insurance Co., 111 U. S. 335, 341, 4 Sup. Ct. 466; Insurance Co. v. McConkey, 127 U. S. 661, 666, 8 Sup. Ct. 1360; Kratzenstein v. Assurance Co., 116 N. Y. 54, 59, 22 N. E. 221. The court below should have instructed the jury to return a verdict for the plaintiff. The judgment is reversed, and the cause remanded, with instructions to the court below to award a new trial.