Evarts v. United States Mutual Accident Ass'n — 40 N.Y. St. Rep. 878

Majority

p. 878

Harry Evarts, by Guardian, Resp’t, v. The United States Mutual Accident Association of the City of New York, App’lt.

(Supreme Court, General Term, Fifth Department,

Filed October 23, 1891.)

Headnote

1. Benefit societies—Assessments.

In an action upon a policy of insurance upon the assessment plan, it appeared that the defendant had moneys of the insured in its hands sufficient to pay the required assessments unless an assessment of two dollars was valid against the insured.. It appeared that this assessment was made before he became a member. Held, that it was not a claim against the insured and that the defendant was bound to apply the moneys of the insured in its hands to the payment of an assessment levied.

2. Same—Proofs of death.

After a company has received notice of death and has declined to furnish the usual blanks for such proof, upon the ground that the policy had lapsed, it cannot make the defense that proofs under oath, required by its rules, were not furnished in time.

3. Pleading—Amendment of complaint on motion for new trial.

It seems that upon a motion for a new trial made upon a case;/and exceptions, the court may allow an amendment to the complaint conforming the pleadings to the proof, where the amendment does not mislead the defendant.

Appeal by the defendant from a judgment entered on the verdict of a jury at the Brie circuit April 15, 1891, and also from an order of the special term entered April 10, 1891, denying the defendant’s motion for anew trial upon a case, and exceptions, the notice of appeal bringing up for review that part of the order which permitted an amendment of the plaintiff’s complaint.

Peet, Smith & Murray, for app’lt; George M. Osgoodby, for resp’t.

The defendant belongs to that class of insur

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.anee companies which carry on a business of insurance against accidents on a mutual plan, and where the funds to meet losses and general expenses are derived from an assessment made upon the members from time to time.

The plaintiff’s father, Harry Bvarts, received a policy of the company August 9, 1888, under proper application, the contract being, in part, that in case of the death of the assured by accident, the defendant should pay to his son, the plaintiff, Harry Bvarts, the sum of $5,000. At the time the insurance was •effected, the assured paid to the defendant the sum of five dollars and a like sum on September 6, 1888, September 13, 1888, .and December 13, 1888, making twenty dollars in all, the last three payments being advance deposits to the defendant to apply upon future assessments under arrangements provided by a general rule of the company to deposit accounts, by which the association agreed to apply upon such assessments as might be made the several small sums so deposited with the company.

The assured was killed outright in a railway accident at Hamilton, Ontario, on April 28, 1889. A letter bearing date May 4, 1889, was written to and received by the defendant, notifying it •of the assured’s death. An acknowledgment thereof was made by the officers of the defendant May 8, 1889, by which the receipt •of the letter informing the company of the death of Harry Bvarts was admitted, and also admitting that an application was made to the company in the same letter for blanks for formal proofs of death. The letter then proceeded as follows: “ In reply I have to say that we cannot comply with your request, for the reason that at the time of his demise Mr. Bvarts was not insured in this company. His insurance having lapsed on April 3, by the non-payment of an assessment expiring on that day.”

It was conceded at the trial by the defendant that the deceased came to his death by accidental means within the intent and meaning of the policy, and that the defendant had, at all times, sufficient moneys to pay the loss, if it should be found to be a claim against the company. The answer, after admitting the issuing of the policy and putting certain allegations of the complaint in issue not necessary to be mentioned, set up as an affirmative defense, and as a forfeiture of the rights of the plaintiff under ■the policy, an allegation to the effect that the deceased failed to pay an assessment ordered, and payable on the 11th day of February, 1889. It further alleges that the certificate or policy so issued by the defendant contained the following condition and provision, to wit: “Immediate notice of any accidental injury or death for which claim may be made under this certificate shall be given in writing, addressed to the secretary of the association at Hew York, stating the full name, occupation and address of the member, with full particulars of the accident and injury; a failure to give such immediate notice shall invalidate all claims under this insurance, and unless affirmative and positive proof of the death or injury and duration of the disability, and that the same ^resulted from bodily injuries covered by this association, shall be nrnished to the association within six months of the happening

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of such accident, in case of the injuries resulting fatally, then all claims based thereon shall be forfeited to the association, and that; the said plaintiff and beneficiary of said Harry Evarts failed to-comply with said condition.”

There appears, therefore, to be two affirmative defenses set forth in the answer. The one relating to the failure of the assured to-pay an assessment of two dollars which matured on the 11th day of February, 1889, is shown to be entirely erroneous, and on the trial, with a liberality quite unusual in pleadings setting up forfeitures and claims for penalties, the learned court permitted an amendment of the answer by which the time of such forfeiture-should be changed from the 11th day of February, 1889, to the; 3d day of April, 1889.

By a notice dated August 9, 1888, (the date of the policy) the defendant informed the insured that at a regular monthly meeting of the board of directors, but at what monthly meeting it was not. stated, an assessment of two dollars upon each member, for conducting the business of the association, was ordered to be made-upon all members in Division “A," to which the deceased belonged, and that such assessment must be paid prior to September 8, 1888.

As we -understand the case, the payment of five dollars at the-time of the issuing of the policy was a part of the contract by which the policy was procured. There were, therefore, three payments of five dollars each, applicable to future assessments. If the assessment of which notice was given August 9, 1888, was-not legal, and the assured consequently not liable for the two dollars therein mentioned, the company had, at the time of the-making of the subsequent assessments, sufficient moneys on deposit in its hands for that purpose, belonging to the assured, to meet such assessment; while, if such payment demanded August. 9, 1888, was lawful and correct, sufficient- moneys would not be in the hands of the company for such purposes. Where, from any portion of the agreement or of the rules and regulations of the company to which the assured subscribed, either in fact or by necessary implication, the right to make the assessment contained, in the notice of August 9, and apply it to prior expenses, exists, „ is not ascertainable from the printed record before us. William. Bro. Smith, who had been a director of the company for ten. years, and its general counsel, testified that though the assured did not become a member until the 8th or 9 th of September, 1888, the first assessment against him, of which he was notified September 9, 1888, was actually made before September 6th, of that, year. This sum may have been exacted under a resolution passed April 30, 1888, whereby applications accepted on and after July 15, 1888, should be assessed to expire thirty days from the date of the policy. Nothing, however, can be claimed by the-defendant from this resolution, for Mr. Smith likewise testified that the assessment under that resolution expired September 6, 1888. But whether the deceased paid in pursuance of the resolution of Api’il 30th or not, there came into the defendant’s hands-at this time the sum of five dollars, applicable only to' assessments-

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made after his membership was effected; and such being the fact the assured is not shown to have been in default in any view which may be taken of the case.

Under the evidence the inference is strong that the assured, when he received the notice, believed that the same was in pursuance of the proper and necessary action of the board, taken after he had become a member of the corporation. If he was deceived in this respect, the company can claim nothing by way of forfeiture of his policy by reason of his voluntary payment of an illegal demand contained in the notice. With the moneys so-unlawfully taken from the assured, the defendant had.it in its power, and it was its duty to discharge any assessment which had. been lawfully made against the assured. Uo defense of forfeiture for nonpayment was available to the defendant while it held, these moneys, and while the assessments lawfully made had not exceeded the amount of money in their hands belonging to the assured. The assured had not contracted to pay for any assessment for losses prior to his membership in the company. Knight v. Supreme Council of Chosen Friends, 24 N. Y. State Rep., 847. For this reason the principal contention made by the learned, counsel for the defendant cannot be upheld.

In respect to the second defense above mentioned, we should be of the opinion that the answer is insufficient to raise the question argued relating to the furnishing of proofs of death, were it necessary to do so to uphold the judgment; for it fails to specify which of the eight or more conditions named in the contract the-plaintiff failed to comply with. Whether such failure related to the omission to serve (1) immediate notice of death, or whether such notice was (2) not in writing, or (8) whether it was not addressed to the secretary of the association at Mew York, or (4) whether the full name of the deceased was not given, or (5). whether his occupation and address were not given, or (6) whether the full particulars of the accident were not given, or (7), whether' the proof was not affirmative and positive of the death, or (8), whether the same was not furnished within six months after the accident, the answer fails to state. It is alleged in tile answer above quoted that the plaintiff failed to comply with the condition which was set forth in the answer, while it is seen that there are numerous conditions upon which the defendant might attempt, to rely, no one of which is specified. In this respect the answer1 is insufficient.

But under the letter acknowledging the receipt of the notification of the death of the assured, and refusing to furnish blanks for giving the formal, positive proofs under oath, no such defense is, under the well established authorities, available to the defendant. There is no condition in the policy saying what kind of proof shall be furnished, and under a refusal to forward blanks for such purposes, and under the letter which acknowledges the intelligence, of the death of the assured without disputing the fact, the defendant must be deemed to be satisfied with such evidence as was in fact furnished, although it was not rendered under oath.

p. 882

It is further contended by the learned counsel for the appellant that it was error for the court on the motion for a new trial made upon a case and exceptions, to allow an amendment to the complaint by which the failure to give formal proofs of death was excused. But under the view already expressed such amendment to the complaint was not necessary, for it was competent for the defendant to regard as sufficient and satisfactory the letter above mentioned containing the announcement of the death of the accused. Yet we know of no reason, if the court thought the amendment should be made, why the same could not be made as well upon a motion for a new trial, so as to conform the pleadings to the proofs, as upon the trial itself, where it is quite clear that the defendant was not misled by such amendment Code Civ. Pro., §§ 539 and 2944.

The judgment and order appealed from should be affirmed.

Dwight, P. J., and Lewis, J., concur.