Court Opinion

ID: 7951408
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:27:09.983569+00
Date Added: 2024-06-11T16:34:09.586019
License: Public Domain

Moore, J.
(dissenting). In this case plaintiff recovered a verdict for $500 by direction of the judge, given to the jury. The defendant is an insurance company organized under the laws of Michigan. The plaintiff is the owner of a farm in Genesee county, and a member of the defendant company. Plaintiff paid his assessments for 1912, 1913 and 1914, but did not pay them, except as hereinafter stated, for the years 1915, 1916, 1917 and 1918, claiming that he had no notice of these assessments. The four assessments for 1915, 1916, 1917 and 1918, were sent by the defendant to a justice of the peace at Flushing for collection, and defendant notified the plaintiff of its action, and that if they were not paid suit would be brought. The justice sent no notice to plaintiff and suit was not brought.
On July 14, 1919, plaintiff had a loss by hail. On July 15th, he drove to Lansing and went to defendant’s! office and paid to Mrs. Ethel M. Gettle, defendant’s clerk, the amount claimed against him for the years 1915, 1916, 1917 and 1918, total $13.30. When plaintiff called at defendant’s office on July 15th, Mrs. Gettle informed him that Mr. Garber, the defendant’s secretary, was out of the city. Mrs. Gettle and the defendant are not agreed as to what was said when the assessments were paid.
On February 15, 1920, plaintiff commenced this suit. The defendant pleaded the general issue and gave notice that the policy had lapsed on account of the failure to pay assessments. When both parties rested, *549plaintiff moved for a directed verdict for $500 for the reason that defendant had waived the suspension of the policy by accepting the assessments and not returning them. The court granted the motion. This ruling of the court is the only error assigned. The defendant retained the money paid to Mrs. Gettle and still retains it.
In article 12 of the charter of defendant company is the following:
“Notice of assessment shall be mailed to the last known post office address of each member on or before November first of each year when an assessment is called. All assessments shall be a lien on the property insured until said assessments are paid.”
The plaintiff claims he did not receive any notice of assessments which he did not pay promptly.
Section 2 of the by-laws reads:
“Section 2. The secretary may cancel or suspend a policy or any part thereof, for the noncompliance of any of the laws of the company or for the nonpayment of any assessment after the expiration of 30 days from the date of the notice of the same; provided, however, that before a policy can be cancelled for aforesaid causes, the insured shall be given 10 days’ notice in which to establish to the president and secretary the injustice of the cancellation.”
We are unable to find any provision, either in the charter or the by-laws as to what the effect will be of a suspension of a member for nonpayment of assessments. It is conceded that no formal entry was made upon the books of the company of an order of suspension.
Counsel for appellant say:
“We claim that this judgment cannot be affirmed without overruling Williams v. Insurance Co., 19 Mich. 451 (2 Am. Rep. 95), and Hill v. Insurance Co., 129 Mich. 144, which are absolutely controlling of the instant case.”
*550An examination of the first case will show that the policy involved was a marine insurance policy, and that the question of assessments and the effect of nonpayment thereof was not involved. The case of Hill v. Insurance Co., 129 Mich. 144, is easily distinguishable from the instant case in that the defendant did not retain the money which was paid to it after the loss occurred, but promptly returned it to the plaintiff.
The law is well settled that the courts do not favor forfeitures and a provision for forfeiture will be strictly construed and courts will find a waiver upon slight evidence when the equity of the claim is in favor of the insured. Lyon v. Insurance Co., 55 Mich. 141; Jones v. Assurance Co., 120 Mich. 211; Lord v. Protective Society, 129 Mich. 335; Staffan v. Cigarmakers’ Union, 204 Mich. 1.
The case before us instead of being controlled by the cases cited by the' appellant are more like the cases of Farmers’ Mutual Fire Ins. Co. v. Bowen, 40 Mich. 147; Elmondorph v. Insurance Co., 91 Mich. 36; Towle v. Insurance Co., 91 Mich. 219; Dick v. Order of the Amaranth, 150 Mich. 215; Reimold v. Insurance Co., 162 Mich, at p. 73; Laxton v. Insurance Co., 168 Mich. 448.
29 Cyc. p. 194, reads:
“It generally constitutes a waiver of the right to avoid the contract of insurance so to declare a forfeiture, where the society, with knowledge of the existence of grounds of avoidance or forfeiture, unconditionally accepts dues or assessments from the member in question, at least where the society retains the money thus paid even though it was received and retained after the death of the assured.”
In the case of Phenix Ins. Co. v. Tomlinson, 125 Ind. 84 (25 N. E. 126, 9 L. R. A. 317), the question arose concerning the payment of a loss which had occurred while the premium note was still due and unpaid. The policy contained this provision:
*551“In case assured fails to pay the premium note, or order, at the time specified, then this policy shall cease to be in force, and remain null and void during the time said note, or order, remains unpaid after its maturity, and no legal action on the part of this company to enforce payment shall be construed as reviving the policy. The payment of the premium, however, revives the policy and makes it good for the balance of its term.”
The case shows that the premium note was paid after the loss and the money accepted and retained by the company. Justice Elliott, in rendering the opinion, said in part:
“It is established law, that the right to declare forfeiture of a policy for the nonpayment of premiums, may be waived, and that the waiver may be manifested by conduct as well as by words. * * *
“This general rule is too firmly settled to be shaken, so that the only question which is here open to controversy is, whether the company did waive the right to forfeit the policy by an acceptance of the premium after the loss had occurred.” * * *
He then considers some cases cited by the insurance company and calls attention to the difference between the cases so cited and the one that is being construed, saying:
“For the reason that in those cases the premium notes were shown to be unpaid at the time of the loss, and it did not appear that the insurance company had subsequently accepted payment, while here there was an acceptance of the premium after the loss occurred.
“We cannot perceive any valid ground upon which it can be held that an insurance company may accept payment of the entire premium after a loss has occurred, and yet escape payment of the loss. By accepting payment, it affirmed the validity of the policy and tacitly asserted that the policy was in force from the time it was executed. * * *
“It is a principle of wide sweep that forfeitures are not favored, and within the spirit of this principle such cases as this clearly fall, ' * * * for it is but *552just that the company having accepted the entire premium after the occurrence of the loss should yield the consideration for which the premium was paid. It is not just that the company should retain the premium and give no value in return. * * *
“We have studied with care the cases referred to by the appellant’s counsel, and we cannot regard them as sustaining the position counsel assume, for we do not believe that in any of them is the doctrine asserted that under such a policy as that before us the insurance company may, with knowledge of the loss and notice that the assured is affirming the validity of the policy, accept and retain the entire premium and yet refuse to pay the loss.”
In the case before us the insurance company has received and retained the full amount of money it would have received if the plaintiff had received notice of the assessments and paid them promptly.
Judgment should be affirmed, with costs to the appellee.
Wiest and Bird, JJ., concurred with Moore, J.