Court Opinion

ID: 6582671
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:39:32.89635+00
Date Added: 2024-06-11T15:57:20.481415
License: Public Domain

Seymour, J.
This is an appeal from the judgment of the Superior Court sustaining the defendants’ demurrer. The cause of demurrer upon which the issue was found for the defendant alleges that it appears from the contract for a breach of which the suit was brought, that the only agreement made therein was to pay such sum as might be received from a death assessment, and that it is not alleged in the complaint that any such sum was ever received.
To understand the force of this objection and the considerations applicable to it, it is necessary to set out the contract in full. It is as follows:—
*306“ Certificate No. 446. Benefit $1,000.
“ Connecticut State Insurance Fund of the Ancient Order of Hibernians of the State of Connecticut.
“In consideration of one dollar, initiation fee, and assessments levied from time to time bjr the directory, Thomas Lawler, of division No. 2 of Hartford, County of Hartford, State of Connecticut, receipt of which is hereby acknowledged, and the agreement on the part of the said Thomas Lawler to accept the following conditions and rules as a part of this contract between said A. O. H. Insurance Fund and himself, hereby constitutes the said Thomas Lawler a benefit member of said A. O. H. Insurance Fund, and agrees to pajr Mary Lawler, wife, if living, if not, to the heirs at law of said member, in sixty days after due proof of the death of said member, a sum received from a death assessment, but not to exceed one thousand dollars.
“COSTDITIOTTS.
“ The conditions upon which this certificate is issued by the Fund and accepted by said member, are the following:—
“First. That the statements and declarations made by and on behalf of said member in his application to become a benefit member of said Fund, which are hereby referred to as a basis of this contract, and are a part thereof, and on the faith of which this certificate is issued, are in all respects true, and that no fact has been suppressed relating to his health or circumstances, affecting the interests of said Fund or their inducement to accept the risk.
“Second. That the said member must be a member in good standing in the order at the time of his death, otherwise this certificate will be null and void.
“ Third. Any assignment of this certificate shall be void unless assented to in writing by said Fund.
“ Fourth. The death claim under this contract shall be payable in sixty days after satisfactory proof of death of said member shall have been furnished at the office of the secretary of the Fund, by the certificate of the attending physician, if there was any, and the full and particular
*307statement of at least one competent and disinterested member of the order, stating the time, place, cause, and circumstances of the death of the party.
'■'■Fifth. No officers of divisions are authorized to make, alter or discharge contracts or waive forfeitures, and any such act, to be valid, must be done in writing and signed by the president and secretary of the directory.
“ Sixth. This contract shall be void if the party shall die in or in consequence of a duel, or by the hands of justice, or in the violation of or attempt to violate any criminal law of the United States or of any state or county in which he may be. .
“ Seventh. A failure to comply with the rules of said Fund as to payment of assessments, or falling into gross and- confirmed habits of intoxication, shall also render the certificate void.
“ Eighth. This certificate is subject to all rules and regulations that the state convention may, from time to time, adopt for the general advancement and interest of the Fund.
“ EXILES.
“ The rules governing this contract, and which form a part of the same, are as follows:—
“ First. There shall be paid by the member under this contract to the secretary of the Fund, on the day of the month in which this contract was made, the sum of one dollar, and he shall not be liable for any further sum except as follows:—
“ Second. Upon the death of any member the said Thomas Lawler shall at once pay, if required, to its secretary, an additional assessment of whatever the directory shall deem necessary.
“ Third. 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 secretary of the Fund by each member, and if the assessment is not received within forty days from *308the mailing of said notice, it shall he accepted and taken as sufficient evidence that the brother has decided to terminate his connection with the Fund, which connection shall thereupon terminate, and the brother’s contract with the Fund shall lapse and be void; but said brother may again renew his connection with the Fund by a new contract, made in the same manner as at first, or for valid reasons to the officers of the Fund, (such as a failure to receive notice of an assessment), he may be reinstated by paying assessment arrearages.
“ Fourth. The above rule governing the collection of assessments for death-claims shall also apply to the collection of the annual assessment.
“ Fifth. Each applicant to become such member must sign the Fund’s form of application, countersigned by the board of directors of the division of which he is a member.
“ In witness whereof the said A. O. H. State Insurance Fund hath, by its president and secretary, signed and delivered this certificate at its office, this 12th day of July, 1886.
“John D. Cunningham,
Secretary Ins. Fund. “P. J. O’Connor,

Treasurer Ins. Fund.

“John P. Murphy,

President Ins. Fundi

Is; it true, as claimed by the defendants, and in the sense in which they claim it, that the only agreement contained in the above contract is to pay such sum as might be received from a death assessment? Or, to put it in another form, what does the agreement to pay a sum received from a death assessment imply and involve, when taken in connection with the other provisions of the contract?
The contract is a peculiar one. It is very inartificially drawn, and it is undoubtedly difficult to give it a satisfactory construction. Of course it should be so construed as to make its contemplated benefits available, if it can legally bo done. And we are, at least, warranted in assuming that the insur*309ers, in accepting the money of the insured, and the insured in paying it, understood that some duty devolved upon the former to secure the promised benefits of the contract to the latter.
In addition to the agreement to pay to Mary Lawler, if living, if not, to the heirs of Thomas, in sixty days after due proof of his death, a sum received from a death assessment, but not to exceed 11000, the contract further provides that the death claim shall be payable in sixty days after satisfactory proof of such death, except in certain eases not necessary to be stated here, and gives the form of notice and process for collecting the death assessment from each member of the association. Each contract contains, also, a promise by the insured that upon the death of any member he will at once pay, if required, to the secretary, an additional assessment of whatever the directory shall deem necessary—additional as the contract shows to the dollar paid upon becoming a member. This is an agreement by the A. O. H. Insurance Fund to pay the proper person, within sixty days after satisfactory proof of the death of the insured, a sum, not to exceed $1000, received from a death assessment. The contract contains the agreement of members to pay such assessments and specifies the process by which its collection shall be undertaken—“ a notice shall he sent ” announcing such assessment, etc. All of which, taken in connection with the other provisions of the contract and the situation and manifest intention of the parties, seems to us to import a promise to make, or cause to be made, the necessary assessment to meet the death claim promised to be paid.
It is well established that whatever is necessary to be done in order to accomplish work specifically contracted to be performed, is parcel of the contract, though not specified. It is also a principle of general application that whatever may be faiily implied from the terms or language of an instrument, is, in judgment of law, contained in it. Currier v. Boston & Maine R. R. Co., 34 N. Hamp., 498; Rogers v Kneeland, 13 Wend., 114.
*310Addison, in his work on contracts, sec. 1400, says: “ Although the words of a contract under seal do not in themselves import any express covenant, yet the law, in order to promote good faith and make men act up to the spirit as well as to the letter of their engagements, will' create and supply, as a necessary result and consequence of the contract, certain covenants and obligations which bind the parties as forcibly and effectually as if they had been expressed in the strongest and most explicit terms in the deed itself.”
In White v. Snell, 5 Pick., 425, an action of assumpsit, the defendant “ for value received promised to pay a sum of money if, and when, he should recover his demands against A.” It was held competent for the plaintiff to prove that the defendant had no demands against A, and that so the promise was absolute, or that he had not used due diligence to collect them.
In Savage v. Whitaker, 15 Maine, 24, the court says:— “An engagement to do a certain thing involves an undertaking to secure and use effectually all the means necessary to accomplish the object.”
Marshall, C. J., in Ogden v. Saunders, 12 Wheat., 341, speaking of the power and policy of the law to supply in contracts what in that case is presumed to have been inadvertently omitted by the parties, says that the parties are supposed to have made those stipulations which as honest, fair and just men they ought to have made.
The contract in Freeman v. National Benefit Society, 42 Hun, 252, is, in many respects, similar to the one under consideration. Although the stipulation in that case was to pay a sum “ equal to the amount received from a death assessment, but not to exceed $3000,” instead of “ a sum received from a death assessment,” etc., yet the court held that “ the provision in the body of the certificate that payment should be made of a sum equal to the amount received from a death assessment, not to exceed the sum specified, in ninety days after due proof of the death of the member was given, implies an obligation upon the company to proceed *311and make the necessary assessment to raise the fund within the time during which it was provided that the claim should remain in abeyance.”
We conclude then that, in connection with the express promises contained in the contract in this case, there is an implied promise to make an assessment to pay the death claim agreed to be paid; an implied promise which the law, “ in order to promote good faith and make the parties act up to the spirit as well as to the letter of their engagements, will create and supply as a necessary result and consequence of their contract.” The contract to pay a sum received from a death assessment, taken in connection with the other express provisions, involves, in the language of one of the decisions above quoted, an undertaking to secure and use effectually all the means necessary to accomplish the result, and require that an assessment should be made.
In this view of the case the allegation of the demurrer, that “ it appears by said contract that the only agreement made therein was to pay such sum as might be received from a death assessment,” is not sustained. There was a further agreement, namely, to make such assessment. The complaint alleges that it was not made nor the amount of insurance paid. This cause of demurrer therefore must fail.
It is true that the complaint does not state, in terms, that the defendants agreed to make an assessment, but it sets out the contract in full and alleges as a breach of it, for which it claims damages, that “ said assessment has never been made by the defendants.”
This method is sanctioned by the Practice Act and the forms and rules given under it. Rule III., sec. 5, states that it is unnecessary to allege any promise or duty which the law implies from the facts pleaded.
Whatever, therefore, may have been the theory of the plaintiff, inasmuch as the agreement to make the assessment to pay the death claim is implied in the contract, we cannot sustain the demurrer upon this point.
This disposes of the only ground for demurrer specifically decided by the Superior Court. The defendants however *312insisted, in the argument before us, that the real question is, whether the suit can be maintained at all against these defendants, that it would be unreasonable not to dispose of the whole matter now and here, and that a demurrer goes back and searches out all the errors in the pleadings. Perhaps, in order to determine whether the plaintiff was injured by the decision of the court sustaining the cause of demurrer already disposed of, we ought to pass upon the other causes assigned, for, if the action cannot, in any event, be sustained against the defendants as individuals, the plaintiff has sustained no injury from the decision that the complaint fails to set forth a cause of action against anybody.
Then too, all the causes for demurrer were argued before us, and the conclusions to which we have come will not make it unjust to the plaintiff to accede to the defendants’ claim, that we should decide all the points which were argued.
The defendants assign for further cause for demurrer, that it appears from the contract declared on that the defendants made no personal agreement upon which they were personally liable, but that the contract was signed by them only as officers of the organization mentioned therein. This issue is raised, not as a question of fact, but as a question of law upon the pleadings.
As a matter of law does the contract, upon its face, show that the defendants made no personal contract upon which they were personally liable? The complaint alleges that they were jointly engaged in carrying on a life insurance business under the name of the “ Connecticut State Insurance Fund,” and that they entered into the contract sued upon. If the facts are so should they not be held liable? Does the contract, as a matter of law, preclude that state of facts? If they had simply been s„ued as individuals, upon a contract headed with the name of the association and signed by them respectively as president, secretary and treasurer, as appears to have been the case in Hitchcock v. Buchanan, 105 U. S. R., 416, cited by the defendants, and the complain* had contained no allegation that they were carrying on the insurance business under a certain name and made the con*313tract wiRi Thomas Lawler, the question, would be a different one, especially if it appeared that the association was incorporated. But under the decision of Davison v. Holden, 55 Conn., 103, the defendants certainly might be liable on a contract signed by them as officers of an organization. If, as the statute permits, the organization consisted simply of individuals united under a distinguishing associate name for business purposes, they did not thereby acquire either corporate power or immunity from individual liability; consequently it could not appear, as a matter of law, from the contract declared on, that the defendants made no personal contract or agreement upon which they were personally liable.
The case of Davison v. Holden was a suit against certain individuals who were, in fact, the president and secretary of an unincorporated association. This court held that “as a matter of law the plaintiff, in giving credit to the associate name, gave credit to-the individuals who upon inquiry should be found to stand behind it.” It seems clear, without pursuing the subject further,'that this cause for demurrer cannot be sustained. Individual members of an unincorporated association are liable for contracts made in the name of the association, without regard to the question whether they so intended or so understood the law, and even if the other party contracted in form with the association and was ignorant of the names of the individual members composing it. And it is also held in the case just cited, that the individual members of such an association do not acquire any immunity from individual liability by force of the statutes which provide that any number of persons associated, and known by some distinguishing name may sue and be sued, plead and be impleaded, by such name; and that the individual property of the members shall not be liable to attachment or levy of execution in a suit brought against the association.
The remaining causes assigned for the demurrer are, that the only breach of the contract alleged in the complaint is that the defendants did not make an assessment, whereas there is no provision in the contract that the defendants or any of them should make any such assessment; and that the *314complaint alleges that, by the contract, the death assessment was to be made by the defendants, whereas it appears in the contract that death assessments were to be made by the directory of the association, and it is not alleged that the defendants are mémbers of the directory. The conclusion to which we have already come, that the contract implies a promise that the defendants will make, or cause to be made, an assessment to meet death claims, makes further discussion of these causes unnecessary. We do not concur in the assertion therein made, that death assessments were to be made by the directory. Its duty was the subordinate one of ascertaining 'the amount necessary to be raised by assessment. This the contract undertakes that it shall do, and that an assessment shall thereupon be made by the Insurance Fund.
Two other questions were discussed before us, namely, whether, if it should be held that the contract contains an agreement to make an assessment, the plaintiff’s remedy is at law, or whether she must first go into a court of equity to compel the defendants to make‘the assessment; and, if an action at law can be sustained, what is the rule of damages. As to the first, we think an action at law can be sustained. Neither circuity nor multiplication of actions is favored by our practice. If there is a contract to make an assessment, a breach of which is alleged and damages demanded therefor, and a rule of damages can be provided, why should not an action at law be sustained ? Both Niblack and Bacon, recent writers upon the subject of mutual benefit societies, after examining a great number of cases, come to the conclusion, with which we fully agree, that the decided weight of authority is to the effect that an action at law will lie for damages for the breach of a contract to make an assessment.
It makes no difference with the questions raised by the demurrer whether substantial or nominal damages can be recovered, for it ought to have been overruled if the plaintiff is entitled to an} damages at all. Still, the rule of damages applicable to the case was thoroughly argued and both parties invited a decision upon it.
Referring again to the contract, the Insurance Fund agrees *315to pay to the proper person, in sixty days after due proof of death, a sum received from a death assessment, but not to exceed one thousand dollars. Each member pays one dollar upon joining the association, and agrees, upon the death of any member, to pay at once, if required, an additional assessment of whatever the directory shall deem necessary. Deem necessary for what ? Clearly not what it shall deem necessary to pay, leaving the amount discretionary with the directory and to be settled in each individual case as it may deem necessary, but what it shall deem it necessary for the association to raise by assessments in order to pay the one thousand dollars. In short, the contract is to be taken as an agreement to make an assessment which, if duly paid, will raise one thousand dollars, or so much thereof as, in addition to funds on hand, will make that sum. The insured takes the risk of the neglect of members to meet their assessments, and of the consequent reduction of the maximum sum named. One thousand dollars is, primé facie, the value of the policy, and the Insurance Fund was bound to take all the steps which it contracted to in order to realize that sum. Cases cited by the plaintiff, and other cases which we have examined, fully sustain this conclusion. And the rule is a fair one, because it is always within the power of the association to live up to its contract, and thus fix the sum which a death assessment will bring.
In Elkhart Mutual Aid Association v. Houghton, 103 Ind., 286, the certificate entitled the beneficiary to one thousand dollars, or so much thereof as might be realized from one assessment. The complaint alleged the death of the beneficiary, proof of his death duly given, and the refusal of the defendant to pay the amount named in the certificate or any part thereof, and its refusal to order or make any assessment to raise the required sum or any part of it. The defendant was held liable for the maximum amount, it not being shown in defence that an assessment would not produce the full amount of the certificate. It was assumed that it was the duty of the defendant to make an assessment, though the contract contained no express agreement to that effect *316Earnshaw v. Sun Mutual Aid Society, 68 Md., 467; Lueder’s Exrs. v. Hartford Life & Annuity Ins. Co., 12 Fed. Reporter, 465; Kansas Protective Union v. Whitt, 36 Kan., 760; Covenant Mutual Benefit Association v. Hoffman, 110 Ill., 606; Suppiger v. Covenant Mut. Benefit Asso., 20 Ill. App., 595; Niblack on Mutual Benefit Societies, § 410, commenting on Newman v. Covenant Mutual Benefit Asso., 72 Iowa, 242. There is error in the judgment appealed from.
In this opinion the other judges concurred,