Case Name: Merritt E. Castner and Rachel A. Castner v. The Farmers' Mutual Fire Insurance Company of Van Buren County
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1883-04-11
Citations: 50 Mich. 273
Docket Number: 
Parties: Merritt E. Castner and Rachel A. Castner v. The Farmers’ Mutual Fire Insurance Company of Van Buren County.
Judges: The other Justices concurred.
Reporter: Michigan Reports
Volume: 50
Pages: 273–278

Head Matter:
Merritt E. Castner and Rachel A. Castner v. The Farmers’ Mutual Fire Insurance Company of Van Buren County.
[See 46 Mich. 15.]
Insurance — Grounds for refusing io pay losses — Forfeit/ure for non-payment of assessments — Notice of assessments — Special questions.
An insurance company, -when sued upon a policy, cannot, after the beginning of suit, make any objections to paying the loss that are different from or additional to those which it stated before.
Using a stove in a room that has no chimney does not release an insurance company from liability to pay a loss by fire resulting therefrom, if the premises are not within corporate limits or if the charter or by-laws of the company do not furnish a basis for refusing to pay.
The charter of a mutual insurance company made the non-payment of assessments within a fixed period a cause of forfeiture. In a case in which this period-had been exceeded and the assessment not paid, an affidavit of loss admitted that the notice of assessment had been received shortly after it was sent. But the affidavit was filled out by the agent of the company and the insured was not led to suppose that the company intended to rely on the provision for forfeiture, or that the date of receiving the notice was of any importance. Held that in an action on the policy he was not estopped, by the recital in his affidavit, from showing that although the notice was taken from the postoffice soon after it was sent, it had not been delivered to him until long afterward.
The charter of a mutual insurance company provided that members should be notified of assessments by circular or verbally, and that if they did not pay within a fixed time they would forfeit protection through their policy. Held that such personal liability could not attack from merely mailing the notice, if it was not actually received.
Refusal to submit special questions that cannot control the result is not error.
Error to Van Buren (Arnold J.)
April 4-5.
April 11.
Assumpsit. Defendant appeals.
Affirmed.
C. A. Harrison, E. A. Grane and Geo. W. Lawton for appellant.
Mailing notice of assessments of a mutual insurance company, prepaid, and directed to members is enough: Lothrop v. Greenfield Ins. Co. 2 Allen 82; and it is sufficient delivery if the notice is taken from the postoffice by one of the family of the person addressed : May on Insurance § 562.
Lester A. Tabor for appellees.
When an insurance company once assigns reasons for not paying a loss, it is estopped from assigning any others in an action on the policy: Brink v. Hanover Life Insurance Co. 80 N. Y. 108 ; Goodwin v. Mass. Life Ins. Co. 73 N. Y. 488; Prentice v. Knickerbocker Life Ins. Co. 77 N. Y. 483; where a party is entitled to notice, and has not stipulated to have it transmitted by mail or otherwise, he is not bound by any notice until actually received: Bwrhams v. Gorey 17 Mich. 282; if after knowledge of a cause of forfeiture under a policy, the company, in any negotiation or transactions with the insured, recognizes the continued validity of the policy, or does any acts based thereon, or requires the insured by virtue thereof to do some act or incur some trouble or expense, the forfeiture is, as matter of law, waived, and such waiver need not be based upon any new agreement, or an estoppel: Titus v. Glens Falls Ins. Co. 81 N. Y. 410; Allen v. Vermont Mutual Ins. Co. 12 Vt. 366 ; Webster v. Phœnix Ins. Co. 36 Wis. 67; Gans v. St. Paul Ins. Co. 43 Wis. 109; Insurmice Co. v. Norton 96 U. S. 234; Viele v. Germania Ins. Co. 26 Iowa 9 ; Pratt v. N. Y. C. Ins. Co. 55 N. Y. 505.

Opinion:
Graves, C. J.
The plaintiffs recovered in the court below a certain loss which they had suffered by the burning of a dwelling-house and part of the contents, which had been insured by the defendant company. The policy was issued on March 2d, 1878, and the fire occurred on the 5th of October following. A wood house stood about ten feet from the dwelling, and an apartment in it contained a stove and was used for drying fruit. The fire started in that room.
The application for insurance made no mention of this building. Notice was regularly given of the loss and the com pany acted upon it. The preliminary proof was drawn up by the secretary, and the directors made an investigation and acquired full knowledge concerning the, facts. The situation of the wooden building in which the fire originated was ascertained. The board thereupon declined to pay any part of the loss, and the refusal was deliberately based upon two grounds : First, because the insured had forfeited all right to recover by not paying an assessment which the company had made against them, according to the provisions of section sixteen of the charter; second, because a stove was used in a room without a chimney, in violation of the charter.
Such was the position when the suit was instituted, and the company were not at liberty thereafter to vary their ground and offer new or additional ob j ections. The property was farm property, and not within any village limits. • There is no provision in the charter against using a stove without a chimney, nor any by-law applicable to the objection.
The chief reliance is on the other ground. The important question is whether when the fire occurred the policy was still active so as to affect the company with liability as insurers in respect to the plaintiffs' loss, and the claim is made that it was not; that the force of the policy as an indemnifying contract had become suspended through the plaintiffs' failure to pay a valid assessment wdthin sixty days after notice. The burden of showing this interruption of responsibility rested on the company — the party asserting it.
It may be assumed for the purpose of the case that the assessment of June, 18Y8, was a valid assessment. The essential point is upon the existence of the alleged default and consequent suspension of insurance. As matter of fact a notice of the assessment was mailed to the plaintiffs not later than June 3d, by Mr. Richards, who was the secretary and treasurer of the company, and at the time the fire took place, on the fifth of October, no payment had been made. But the plaintiffs claimed that they did not receive the notice until some time in September, and it is not disputed that within sixty days from that time they made a tender of the assessment, which was refused. The company maintained — First, that the plaintiffs were estopped from saying that they did not get the notice more than sixty days prior to the fire; but if not, then second, that the mailing the information amounted to notice within the meaning of the charter provision.
First, as to the estoppel. The ground on which this proposition is based is that M. E. Castner, in the affidavit of loss drawn up by Mr. Richards, the secretary and treasurer, in the presence of the co-plaintiff and the directors and some others, stated that the notice Was received about a week after its date, and that Edward Castner delivered it. But .it appeared at the trial that on the occasion when this affidavit was made there was no intimation to the plaintiff that the company meditated taking any advantage of the prior non-payment of the assessment, nor any suggestion that the time of the actual reception of the notice was of the least importance, nor any hint that the company had any hostile views. There was evidence, moreover, tending to show that the plaintiffs were led to suppose and did suppose, as the agents of the company must have seen, that the actual time of the receipt of the notice was not material, and the statement about it more a matter of form than substance ; that Mr. Richards, on drawing up the affidavit, inquired about the time, and was told by the affiant that he could not tell; that Richards then pressed him to make some reply, and that he thereupon answered "Perhaps a week or two; " and there was evidence tending to show further that Edward Castner, a brother of Merritt, took, the notice from the post-office and inadvertently kept it in his pocket until about the 10th of September, and then for the first time gave it to the plaintiffs.
In view of all the evidence on the subject it was not proper for the court to rule that the plaintiffs were bound by this statement in the affidavit of loss, and estopped from taking the sense of the jury on the question of the real truth respecting the time when the plaintiffs received notice. It would have been an inequitable rather than an equitable estoppel.
As to the second point, was the fact of mailing the paper which contained the information for the member sufficient of itself to constitute the notification required by the charter ? The proposition here is that it makes no difference whether the member ever gets knowledge of the assessment upon him or not, provided notice of it is regularly mailed to him, and therefore the contention is to be viewed on the assumption that he does not get it. The language of the charter is that the member is to be " notified by the secretary or otherwise, either by cvrcula/r or a verbal noticeP § 16. The consequences to flow from this notification are admitted to be important.
A fixed personal liability is to depend upon it; and further, in case of failure to respond by payment of the sum assessed as communicated by the "notice," during a given number of days, the member is to stand unprotected by his policy and wholly without remedy or redress in case of loss. In principle it is not easy to distinguish the nature of the required notification from the office and object of service of process, and there would seem to be as much reason for real notice in the case in question as in the case of an action. The destruction of a mail, or accidents preventing the delivery of matter, or even a considerable delay, might at any time, without fault of the persons insured, eventuate in wide-spread loss and injustice.
No construction,- open to so much- objection, should be admitted unless rendered necessary by the terms of the charter; and they do not require it. On the contrary, they contemplate that the members shall have real information of the assessment. The provision is not that notice or information shall be mailed or sent or forwarded. The members are to be " notified," — that is, informed; to have made known to them the fact of the assessment; and this is permitted to be done either by oral statements to the members or by delivery to them of written statements through the agency of the post-office or some other. It follows that the second ground of defense cannot be supported.
On reviewing tbe charge it appears to have been very-full and entirely fail', and it is not open to complaint by the company. No error was committed in declining to submit the specific questions proposed by the defense. They called for nothing which could rule the result.
No error is shown, and the judgment should be affirmed with costs
The other Justices concurred.