Court Opinion

ID: 4929220
Source: CourtListenerOpinion
Date Created: 2021-09-24 01:05:01.678057+00
Date Added: 2024-06-11T08:14:24.275519
License: Public Domain

Shepley, C. J.
The suit is upon a note given by the defendants to the corporation in payment, of so much as should be required, of the premium for a policy of insurance issued to them for the term of three years. It is admitted, that they thereby became members of the corporation and liable to be aifected by its charter, by-laws, and regulations. And that the assessments claimed were duly made; the last two of which the defendants refused to pay.
The defence rests upon a notice or communication made on June 5, 1848, by the treasurer of the corporation, that by a vote passed at its annual meeting holden on May 23, 1848, their “ insurance is suspended in thirty days” after they have *454been notified, “ if payment be not made; and should your property be destroyed by fire during such suspension, you will have no remedy upon this company.”
The argument for the defendants concedes, that the corporation by its charter, or by-laws, or by the conditions of the policy, or of the note, had no right to suspend the risk for neglect of prompt payment of assessments. A mutual insurance company by its contract with one of its members becomes as perfectly bound by the terms of that contract, as it would, if made with a stranger. The vote of the corporation can amount to no more, than the declaration of one party to a contract, that he will consider himself discharged from it, if the other party does not perform his part of another contract, which formed the consideration of it.
When the contracts of the respective parties are not dependent, the omission of one to perform punctually, does not authorize the other to rescind or annihilate his own contract. The policy and the note were independent contracts, neither could be suspended or rescinded by one party without the consent of the other.
If the defendants had suffered by a loss of their property within the terms of their policy and had claimed an indemnity from the corporation, its own vote passed before that time, that their policy was suspended, could have had no effect upon their rights. It could only have been considered as a vain effort made by a party to relieve itself from its contract without the consent of the other party. And to do it upon terms and in a manner not contained in any charter, by-law or stipulation operative upon both parties.
It is said, that the vote of the corporation “ was a gross and palpable violation of the contract on the part of the companyand it is thence inferred, that the other party was discharged.
The violation of a contract by a party to it, which will discharge another party, must consist of some omission of an act required or commision of one forbidden by it and essential to the continued performance of the contract. A *455mere declaration made by a party, that he will not do a future act, which it has not and may not become his duty to perform, or a mere denial, that upon a future contingency, the other party shall not have any benefit from the contract, is not such a violation of it, as will without the assent of the other destroy its efficacy.
The defendants might, as the argument for them alleges, have had a right “ to take them at their word,” if they had notified them, that they consented that the policy should terminate upon the conditions named in their vote.
Having continued to the termination of their policy to have the right to enforce it for the recovery of any loss, that might have occurred within its terms, they cannot be relieved from the performance of their contract which formed the consideration of it. Defendants defaulted.
Tenney, Wells, Howard and Appleton, J. J., concurred.