Case Name: PETERS v. FARMER'S MUTUAL FIRE INS. CO. OF WAYNE AND MONROE COUNTIES
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1935-12-10
Citations: 274 Mich. 37
Docket Number: Docket No. 46, Calendar No. 38,574
Parties: PETERS v. FARMER’S MUTUAL FIRE INS. CO. OF WAYNE AND MONROE COUNTIES.
Judges: Butzel, Bushnell, and Edward M. Sharpe, JJ., concurred with Wiest, J.
Reporter: Michigan Reports
Volume: 274
Pages: 37–47

Head Matter:
PETERS v. FARMER’S MUTUAL FIRE INS. CO. OF WAYNE AND MONROE COUNTIES.
1. Insurance — Mutual Pire Policy — 'Suspension — Nonpayment on Assessment.
Mutual fire insurance company’s policy held, suspended for nonpayment of assessment notwithstanding that charter of company provided for optional cancellation of policy by secretary subject to review of board of directors, since suspension for a confessed nonpayment calls for no review and is an accomplished fact whei-e notice of assessment provided for such suspension in case of default, hence member may not recover for fire loss occurring after default.
2. Same — Construction of Policy.
If there be language in an insurance policy calling for construction, it should be construed in favor of insured.
3. Same — Nonpayment of Assessment — Self-Operative Forfeiture.
Clause in mutual fire insurance policy providing that assessment shall be paid within a stated time or policy will be forfeited is valid and self-operative.
Potter, C. J., and North and Fead, JJ., dissenting.
Appeal from Wayne; Webster (Arthur), J.
Submitted October 10, 1935.
(Docket No. 46, Calendar No. 38,574.)
Decided December 10, 1935.
Rehearing denied January 31, 1936.
Assumpsit by Paul F. Peters against Farmer’s Mutual Fire Insurance Company of Wayne and Monroe Counties, for sums due for fire loss. Verdict for plaintiff on special questions. Judgment for defendant non obstante veredicto. Plaintiff appeals.
Affirmed.
Harry Hartman (Harold M. Shapero, 'of counsel), for plaintiff.
Golden, Nadeau & Fallon (Frank C. Golden, of counsel), for defendant.

Opinion:
Wiest, J.
I cannot concur in the opinion of Mr. Justice North.
Plaintiff agreed to pay all regular fees and all assessments made against him according to the char ter and by-laws, within 30 days after notice. He was duly notified of a proper assessment and warned that "If not paid on or before Jan. 10, 1932, your policy will stand suspended until such assessment is paid." He did not pay and later, while still in default, he suffered loss by fire.
Was the policy so suspended in the absence of subsequent notice of cancellation?
The charter provides:
"He (the secretary) may cancel any and all policies at any time for non-fulfillment of the requirements of the charter of this company on the part of the holder or holders thereof, subject to an appeal from such decision to the board of directors at their annual meeting. ' '
The charter contains requirements other than payment of assessments, the non-fulfillment .of which call for cancellation of the policy and, to check arbitrary action by the secretary, his cancellation is made subject to review, but suspension of the policy, for confessed nonpayment of an unquestioned assessment, calls for no review, is an accomplished fact and valid without further idle ceremony. The notice and default worked suspension of the risk, and I cannot hold otherwise.
In School District No. 7, Keeler Twp., v. Farmers Mutual Fire Ins. Co. of Dowagiac, 256 Mich. 515, the by-law of the company provided:
" 'Each member shall understand and take notice that his assessment is due the 1st day of November in each and every year, and unless such assessment is paid on or before December 31st thereafter that such failure bars him from any privileges in this company after January 1st following, no matter whether or not he has received notice of his assessment.' "
There no notice, except that of October 31st or November 1st, was claimed. We said:
"There is no provision for suspension. Does the contract provide for lapse or forfeiture for failure to pay assessment? Having due regard for the rule that if there be language in the policy calling for construction it should be construed in favor of insured, we think the question well answered by the trial judge, quoting from his opinion:
" 'A clause stating that an assessment shall be paid within a stipulated time or policy will be forfeited is valid and such a provision operates of itself to work a forfeiture.
" 'So the question gets around to this: Is the condition of the by-laws, "unless such assessment is paid on or before December 31st thereafter, such failure bars him from any privileges in this company after January 1st following," to be construed as a provision for forfeiture?
" 'As a member of defendant company, plaintiff had the right to recover for the loss if the assessment was paid on or before December 31, 1929. Plaintiff failed to pay; such failure worked a forfeiture of the policy and barred the plaintiff from the right or privilege to collect.' "
The judgment is affirmed, with costs to defendant.
Butzel, Bushnell, and Edward M. Sharpe, JJ., concurred with Wiest, J.