Case ID: ny-st-rep_26/html/0579-01.html
Source: Caselaw Access Project
Author: {"author": "Macomber, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Emily J. Shay, Pl’ff, v. The National Benefit Society of the City of New York, Def't.
    
      (Supreme Court, General Term, Fifth Department,
    
    
      Filed October 19, 1889.)
    
    1. Insurance (Mutual) — Second notice waives forfeiture under first.
    Where the rules of the company provide that the policy shall lapse if assessment is not paid within thirty days after notice thereof, but that the insured may renew his connection by a new contract or for valid reasons: to the officers may be reinstated on payment of arrearages, a second notice of assessment sent by the company after expiration of thirty days from the first is a waiver of forfeiture for non-payment under the first notice.
    3. Same — Effect of payment.
    Where payment was made within the time limited by the second notice, but was received by the company after the death of insured, with knowledge of such death, without objection, it cannot afterward repudiate such payment and insist on the previous opportunity to work a forfeiture by notice that a certificate of good health should have accompanied the remittance ; the rule requiring no such certificate.
    Motion by the defendant for a new trial on a case and exceptions, ordered to be heard at the general term in the first instance, upon a verdict directed at the Ontario circuit in favor of the plaintiff for the recovery upon two policies of life insurance of $5,000 each, issued by the defendant to James Shay on the 14th of September, 1885, for the benefit of the plaintiff.
    
      E. G. Lapham, for pl’ff; William H. Smith, for def’t.
   Macomber, J.

One of the rules (the third) of the company, and under which the assured received the policies, is as follows: “ The form of notice to and process of collection from each of the members of the assessment above named shall be as follows: A notice shall be sent announcing such assessment, and the number thereof, to the last post office address given to the society by each member, and if the assessment is not received within thirty days from the mailing of the said notice it shall be accepted and taken as sufficient evidence that the party has decided to terminate his connection with the society, which connection shall thereupon terminate, and the party’s contract with the society shall lapse and be void; but said party may again renew his connection with the society by a new contract made in the same manner as the first, or, for valid reasons, to the officers of the society (such as a failure to receive notice of the assessment), he may be re-instated by paying assessment arrearages.”

On the 31st day of May, 1886, a notice to pay a death rate to the company for the death of one of the members was mailed to James Shay. It was dated June 1, 1886. It was therein stated that the assessment was made “to provide for this claim, your assessment of $16.80 is now due and payable within thirty days from the date hereof.”

Annexed to the notice was what is called a coupon, which was a summary statement of the number of the policy, and the .claim of the insured, and the amount, and the time of the expiration for the payment of the assessment, which was there stated to be July 1, 1886. This was not paid within the month of June by'the deceased or by anybody else in his behalf.

The same blank notice, filled up in the same manner, was again mailed to the deceased July fifth or sixth. This was marked in conspicuous letters “ second notice.”

When this last or second notice, so called, was sent to the deceased, the time for the payment, by the terms of the notice itself, had passed by about five or six days. If any forfeiture had been worked by the failure to pay the assessment, it was before the sending of such last notice. Under the phraseology of the third provision or rule above quoted, it seems to us that the company, by sending out a second notice, intended to and did, in fact, waive any forfeiture which had been incurred by the assured by reason of his failure to pay the assessment on or before July first. This act of waiver was not done by any subordinate officer of the company, but by the company itself, through its treasurer. Under the rules of the company, it was doubtless competent for the defendant to treat the failure to pay within the previous thirty days, sufficient evidence that the party had decided to terminate his connection with the society, and for the company on its part to take the position that the policy had lapsed and was void It is there provided that the “ party may again renew his connection with the society by a new contract made in the same manner as at first; or, for valid reasons to the officers of the society, such as a failure to receive notice of an assessment, he may be reinstated by paying the assessment arrearages.” Here was, therefore, an invitation to the deceased, necessarily involving a waiver of the previous forfeiture, to pay within the usual time after the service of such notice the assessment which was claimed from him, and there was impliedly a promise on the part of the company that if such payment was within thirty days from the time of the reception of the second notice there should be no forfeiture.

Payment was made by express within that period, namely, on the 21st day of July, 1886, and was received by the defendant on •the 22d of that month, but not' until after the death of the insured. A receipt in due form was given for such payment, and was written upon the face of the second notice.

Subsequently to this payment the company undertook to retire from the obligation which it assumed by receiving, unquestioned, the money and giving a receipt therefor, to repudiate such payment and to insist upon the previous opportunity to work a forfeiture. In this respect also the action of the defendant cannot be upheld. The officers, at the time of the receipt of the money, knew that James Shay was dead. On the 22d day of July, 1886, the defendant returned by express, addressed to L. L. Shay, a daughter of the deceased, money orders for $16.80 and $7.80 for the assessments, alleging as follows: “ The assessments were due and payable on or before July first, and not having been paid then the certificate lapsed and became void by the conditions therein and reinstatement can only be made under the terms of our certificates and by-laws upon satisfactory evidence of good health at the time or by new contract made in the same manner as at first Certificate of health must accompany remittances.” This communication contains no intimation that the clerk who had been furnished proper receipts had no power or right to receive and to retain the assessments ; on the contrary it places the rights of the company upon a ground utterly untenable with respect to the third rule above quoted.

Under these circumstances, there being no request on the part of the defendant to go to the jmy, but both sides participating in a motion for a direction of a verdict respectively, we think the direction of the trial court was correct, and the judgment should be granted to the plaintiff upon the verdict as directed, with costs.

Barker, P. J., and Dwight, J., concur.