RONALD v. MUTUAL RESERVE FUND LIFE ASSOCIATION

RONALD v. MUTUAL RESERVE FUND LIFE ASSOCIATION. N. Y. Supreme Court, First District, Circuit; April, 1889. 1. Benefit insurance; renewal of lapsed, certificate.] A certificate of benefit insurance, which has lapsed by default in payment of dues, is not reinstated by the payment of the dues to a receipting clerk who has no power to-make a fresh contract, and who delivers a receipt expressed to be on condition that the insured is in as good health as originally, etc., this not being the fact, even though the person making the payment does not read the receipt. 2. Same ; waiver of forfeiture.] The fact that the association asked for proofs of death, and gave instructions in connection therewith, is not a waiver of the forfeiture. Trial at the circuit. Agnes Ronald sued upon a certificate of insurance issued by the defendant. Mutual Reserve Fund Life Association, upon the life of George Ronald and made payable to the plaintiff. The certificate contained a stipulation providing that if any of the payments stipulated should not be paid when due, the policy should become null and void, and all payments made thereon should be forfeited to the association. The annual dues, payable August 21, 1884, were unpaid on that day. On September 26, 1884, one, Hardenburgh, presented the amount of the dues to the defendant, and they received the same, at the same time delivering to him a receipt or paper which provided: 66 the time having expired for the payment of the above annual dues, and. payment being tendered after the same was due, this receipt is given by the association and accepted by the member upon the following conditions, and not otherwise: First. That said member is now living and of temperate habits, and in as good health as when originally received as a member of this association under said certificate, otherwise said payment and this receipt and said certificate shall be null and void.” . On the day of payment the insured was ill and on the following day he died from fatty degeneration of the heart. These facts were not disclosed to the association at the time of payment. Subsequently, on being informed of the death of the insured, the association gave the plaintiff’s representative blank proofs of loss to be filled in, with instructions relating to the same. When these proofs of loss were delivered to the association, they were found to be incorrect, and new blanks were thereupon furnished to the plaintiff’s representative, and instructions given as to the method of filling out the same. The defendant resisted payment, claiming a forfeiture of the certificate, and thereupon the plaintiff brought this action. At the close of the plaintiff’s case the defendant moved to dismiss the complaint. Charles B. Meyer, for the plaintiff. Taylor & Parker, for the defendant. Compare Titus v. Glens Falls Ins. Co., 81 N. Y. 410; s. c., 8 Abb. N. C. 315, to the effect that mere negotiations may amount to a waiver of the forfeiture, even though there is no consideration and no estoppel. [MAJORITY — Barrett, J.] Barrett, J. By the failure to pay the dues, $10, on or about August 2l, 1884, the policy became null and void, and all previous payments made thereon were forfeited to the company. The contract of life insurance was then at an end. That was the situation when Mr. Hardenburgli went to the office of the company on September 26, 1884, and paid the $10 so due on the 21st of the preceding August. Mr. Hardenburgh was bound to know that a reinstatement of the policy on September 26, depended upon the will of the company, and accordingly he should have examined the instrument given to him at the time of the payment. Such instrument could not in the nature of things have been understood to be an ordinary receipt for dues. It would naturally express the terms of waiver or the conditions of reinstatement, or whatever else was essential to give renewed life to the old policy, or to create a new contract. . The receipting clerk had no authority in law to contract afresh for the company, except upon the terms and conditions to which he was limited by the instructions given to him pursuant to the constitution and by-laws, which constitution and by-laws were made part and parcel of the original contract of insurance. Accordingly, the payment of the $10, and the- delivery, contemporaneously therewith, of the receipt, together constitute the fresh contract. The insured thereupon became bound by the terms and conditions embodied in the receipt, and he so became bound whether he or Mr. Hardenburgh read it or not. He was as much bound by the terms of the receipt as he was by the terms of the original policy. Now, this is a conditional receipt. It specifies the fact that the time for the payment of the dues had expired ; that such payment was tendered after the expiration of the contract period, and that the receipt was given and accepted upon certain conditions. These conditions read as follows : “ That the said member is now living and of temperate habits and in as good health as when originally received as a member of the association under the certificate.” And it further provides, that otherwise the payment and the receipt and the original certificate should be null and void. It is clear, upon the evidence, that the insured was not on September 26, 1884, a man of temperate habits, nor in as good health as when originally received as a member of the association under the certificate. It would seem to follow, therefore, that the payment -at that date of the August dues was null and void, and that the original certificate received no fresh life. It remained just as it' was at the time of payment, null and void. It is also contended that there was a waiver resulting from the request for proofs of death, and from the instructions given in regard to them. In my judgment this request and these instructions did not amount to a waiver of an .existing forfeiture. The plaintiff was not thereby misled to. her prejudice. Her rights depended upon the facts existing at the death of her husband. The question of waiver might subsequently arise with respect to conditions as to the proofs of death, but the insurer is not bound to abandon its claim of forfeiture if it would insist upon a compliance with the terms of the policy as to the proof of death. The case of the Phoenix Insurance Company against Stevenson, 8 Ins. Law Journal, 922, is in point. The principle which I have stated was there maintained by the court of appeals of Kentucky, and the learned editor of the journal adds a very copious and instructive note, citing all the cases upon the subject, and making the following clear and correct statement of the results : “ If the mere demand for formal proof of loss, with a knowledge that the insured had violated a policy stipulation, were liable to operate as a waiver of such stipulation, it would follow that the insured must surrender his right to demand such proof if he would avail himself of the breach, or, at any rate, he could not safely demand proof without at the same time being careful to notify the insured of his proposed future line of defense.” There are cases which hold that there may possibly be an election between the claim of forfeiture, because of acts antecedent the death of the insured and the demand for proofs of death, but those are cases where upon, the facts there was a clear election; cases where the plaintiff had' been subjected to expensive and burdensome efforts to supply elaborate details in the proofs required by the company ; cases where the facts otherwise indicated a clear abandonment of any position inconsistent with the demand for such elaborate and expensive proofs. It is needless to say that nothing of the kind exists in the present case. The defendant asked for nothing more than the ordinary proofs required under ordinary circumstances, and just as soon as it was clear to the mind of those who were acting for the company that there was no just claim against it, owing to the facts existing at the time of death, that position was promptly asserted. For these reasons I feel constrained to dismiss the complaint ; and I think it fair to say that it is one of those cases where a well regulated company, desiring to do justice to all those whom it represents, might fairly, and with a due sense of equity, make the defense it has here. It certainly was a very peculiar case, where after a policy had lapsed for over a month, and the insured was within one day of his death— suffering from fatty degeneration of the heart—that the dues should have been tendered without full disclosure of the then existing facts. I do not suppose there is the slightest doubt that if the whole truth had been known to the officers of the company, they would scarcely have felt justified in acceding to the request that the insurance be kept alive. I am satisfied, therefore, that in this case the application of the rules of law do not work any real hardship. Complaint dismissed.