Court Opinion

ID: 6736129
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:18:35.066737+00
Date Added: 2024-06-11T09:43:44.807496
License: Public Domain

On Rehearing.
Spalding, J.
Counsel for respondent submit a petition asking a rehearing. They insist that the original opinion of this court indicates that certain controlling facts and authorities were overlooked. The petition is not framed in the spirit that we would expect to see exhibited by counsel of the high reputation for fairness which those signing it possess or should exhibit toward the court, and is not altogether entitled to the consideration which we give it. It seems also to rest upon a misconstruction of what we held to be .the law applicable in the premises. We did not attempt to decide that the acts of appellant might not in some cases, or if done by officers -of a stock company, constitute a waiver, although there is a vast number of authorities, we think,, a very large preponderance of them, holding similar acts no waiver. Counsel assume that the delivery of the policy to respondent was unconditional. This is not the fact. The conditions on which it was delivered were plainly stated on the policy, and were a part of the by-laws of which respondent had notice as a member of the company, and by which it was bound. Farmers’ Mutual Insurance Company v. Kinney, 64 Neb. 808, 90 N. W. 926; Corey v. Sherman, 96 Iowa, 114, 64 N. W. 828, 32 L. R. A. 514; Brown v. Stoerkel, 74 Mich, 269, 41 N. W. 921, 3 L. R. A. 430; 74 Mich, 269, 41 N. W. 921, 3 L. R. A. 430; 7 Current Law, 1784. This by-law gave credit for 30 days. Afterwards, if the premium was still unpaid, the policy was suspended and in 60 days cancelled. The cancellation took place before the loss occurred and the premium was never paid. The policy and by-laws were actual notice of these conditions, and, as stated in the original opinion, were self-executing. 7. Cur. *265Law, 1793, note 20; Lehman v. Clark, 174 Ill. 279, 51 N. E. 222, 43 L. R. A. 648. Had the insured paid the premium-after default, and had it 'been accepted by the insurer, pursuant to a usage or custom which had become established -either in its dealings with the respondent or generally, a different question would be presented, but, as we show in the original opinion, no part -of the premium was accepted -or retained, or even offered.
While we rested our decision upon the broad ground that the secretary -cannot, under the laws which govern him, waive the conditions prescribed by such laws, respondent still argues that the waiver did take place. It must be borne in mind, as before stated, that this is a purely mutual company. It has no capital stock, and must depend solely upon the payment of premiums and the additional liability imposed upon its members by statute -to enable it to pay losses. If its secretary can extend ambiguous or unlimited credit to one member, contrary to the terms -of the agreement entered into through its by-laws by its members, of which respondent was -one, he -can do so with all members, and it would be wholly devoid of power to -meet losses as they might occur. The same effect would follow, and the same law apply, as though it was an assessment company. It is said in National Masonic Accident Association v. Burr, 44 Neb. 256, 62 N. W. 466: “A member who fails to pay his assessment when due, -though he may afterwards pay it, and his rights as a member be reinstated from the time -of making such payment, has no cause to complain because his rights as a member and his claims against the association are not made to date back so as to cover any injury he may have received during the time of his default, for this is his express -contract, and it is a reasonable one.” The law of this state provides that mutual companies shall make collections in the shape of premiums, payable in advance, to enable them to meet losses-. The premiums are fixed at figures which it is supposed will admit of all losses being paid therefrom, but, in case of a miscalculation or an emergency, an additional liability is placed upon members. Upon the other hand, if, at the end of the year, it is found that the members have overpaid, they are entitled to a return of the surplus. If losses are paid outside of reasonable limits, necessary to permit the -transaction of business, without the payment of any premiums, it -could only be by taking money with which to do so from the surplus in the hands of the company belonging to other members, or from the *266small percentage required as a reserve. The latter would soon 'be exhausted, and thus compel assessments to make up the deficiency or force a suspension, or both. Still further, the policy had ceased to exist by its terms and those of the by-laws of the company. For this reason, it is clear that the same principle does not apply that would be applicable had the policy still been in force. Nlo contract was in existence. Can it be contended that by replying to letters of the respondent, or even by sending it a blank proof of loss, a new contract was entered into? It is not a question of waiving a mere suspension, but one of making a wholly new contract, and it requires an express agreement to do this. The doctrine of waiver is not applicable. The insurer had received no benefits under the policy, and, there being no policy in effect, no forfeiture in a legal sense occurred. It is held in Equitable Life Assur. Society v. McElroy et. al., 83 Fed. 631, 28 C. C. A. 365, that, where a life insurance policy has become void, it cannot be revived without a new contract between the parties.' See, also, Diehl v. Adams County Mutual Insurance Company, 58 Pa. 443, 98 Am. Dec. 302; Beatty v. Lycoming County Insurance Company, 66 Pa. 9, 5 Am. Rep. 318. It is immaterial whether notice of suspension, cancellation, and demand for payment were sent and received prior to loss, though the proof strongly tends to show that some of these things were done. The by-laws of the policy were notice of what would happen, and the sending of a notice that payment might still be made during the period of suspension could be no waiver, and it was so stated in the by-laws.
It is insisted that we assume the constitutionality of the standard policy law, and that the terms of the standard policy are in conflict with the by-law quoted. If the standard policy law is unconstitutional, the by-law is certainly effective. If valid, the standard form of policy expressly makes the by-laws of mutual companies a part of their policies. Section 5951, Rev. Codes 1905, only applies where a note or obligation is given for the whole or a part of the premium, and has no bearing on this case. Neither have the provisions of section 4446. It is urged that the principle which this court holds controlling was not insisted upon in the lower court, and was but faintly touched upon in appellant’s brief. On the contrary, its discussion occupies a very considerable part of the brief submitted by appellant,' and respondent answers it in his brief, and states that all matters were more or less fully argued and.considered in the *267trial court. We might add that, in view of the persistency and earnestness with which respondent urges its claims to a rehearing, we have most carefully reviewed the authorities, and that the reasons stated in the original opinion in support of our decision have ample support, not only by the overwhelming weight of authority where the question has been raised, but by reason as well. One point was, however, not referred to which we deem it advisable to mention at this time. The policy -contained a provision reading as follows: “No offcer, agent, or other representative of this -company shall have power to waive any provision or condition of this policy, except such as, by the terms -of this policy, may be indorsed hereon or added hereto, and as t-o such provisions and conditions, no officer, agent, or representative shall have such power, or be deemed or held to have waived such provisions or conditions, unless such waiver, if any, shall be written upon -or attached hereto, nor shall any privilege or permission affecting the insurance under this policy, exist or be claimed by the insured,’ unless so written or attached.” The authorities on similar provisions are in hopeless conflict, but the Supreme Court of the United States in 1901 had this identical provision under consideration in Northern Assurance Company of London v. Grand Building Association, 183 U. S. 308, 22 Sup Ct. 133, 46 L. Ed. 213, and, after an exhaustive review -of the conflicting authorities, sustained the provision in question as against the contention that it could be waived in some manner other than in writing indorsed on the policy. The opinion in that case is most instructive, as is also that in Modern Woodmen of America v. Tevis et al., 117 Fed. 369, 54 C. C. A. 293, in which the opinion of the Circuit Court of appeals of the Eighth Circuit was delivered by Judge Sanborn. We append a list of a few authorities bearing directly or indirectly on the questions involved in the -case at bar, several of which are to the effect that acts of agents and -officers or insurance companies similar to those urged as constituting a waiver in the case at bar do not create a waiver of the terms of the policy: Driscoll v. Modern Brotherhood of America, 77 Neb. 282, 109 N. W. 158; Farmers’ Mutual Insurance Company v. Kinney, 64 Neb. 808, 90 N. W. 926; National Masonic Accident Association v. Burr, 44 Neb. 256, 62 N. W. 466; Kocher v. Supreme Council Ben Legion, 65 N. J. Law, 649, 48 Atl. 544, 52 L. R. A. 861, 86 Am. St. Rep. 687; Borgraefe v. Sup. L. & C. of Honor, 22 Mo. App. 127; Burdon v. Mass. & C. Ass’n, 147 Mass. 360, 17 N. E. 874, 1 L. R. A. 146; Garlick v. *268Miss. Valley Ins. Co., 44 Iowa, 553; Morrow v. Des Moines Ins. Co., 84.Iowa, 256, 51 N. W. 3; Ware v. Insurance Co., 45 N. J. Law, 177; Carlson v. Supreme Council A. L. of H., 115 Cal. 466, 47 Pac. 375, 35 L. R. A. 643; McCullough et al. v. Home Ins Co., 118 Tenn. 263, 100 S. W. 104; Lyon v. Supreme Assembly of the Royal Society of Good Fellows, 153 Mass. 83, 26 N. E. 236; Boyd v. Insurance Company, 90 Tenn. 212, 16 S. W. 470, 25 Am. St. Rep. &76; Van Buren v. St. Joseph County Village Fire Ins. Co., 28 Mich. 398; Hughes v. Wisconsin Odd Fellows Mutual Life Ins. Co., 98 Wis. 292, 73 N. W. 1015.
(119 N. W. 1048.)
The petition is denied:
All concur.