Bentz v. Nw. Aid Ass'n

• Decision Date: 06 March 1889
• Citation: 41 N.W. 1037,40 Minn. 202
• Parties: BENTZ v NORTHWESTERN AID ASS'N.
• Court: Minnesota Supreme Court

40 Minn. 202

41 N.W. 1037

BENTZvNORTHWESTERN AID ASS'N.

Supreme Court of Minnesota.

March 6, 1889.

(Syllabus by the Court.)

1. When a mutual benefit life insurance association, incorporated under the laws of this state, and dependent upon securing such amounts as may be required to meet and liquidate death claims through assessments upon its members, refuses to make an assessment in a proper case, the remedy is by an action for a breach of contract.

2. Unless the defendant association alleges in its answer and on trial establishes that the amount should be less, because all members do not respond to assessments, the measure of damages in such cases is the amount assessable upon all insured.

3. In an action to recover the amount claimed to be due upon a policy or certificate issued by such an association, it answered, by way of defense, that the assured had used alcoholic liquors to such an extent, subsequent to the issuance of the certificate, as to induce delirium tremens, and that such disease was the cause of death. On the trial it offered little or no evidence to sustain the allegations, but relied upon two affidavits made by physicians as to the cause of the death, in one of which the cause was stated as delirium tremens, in the other as hemorrhage induced by an excessive use of intoxicants. These affidavits were made by the physicians on blanks furnished by the association, and were forwarded to it by plaintiff, with other proofs of the death of the assured. Held, that the plaintiff beneficiary was neither concluded nor estopped upon the trial by the statements of the physicians, and that the issue made by the pleadings as to the real cause of the death was triable as any other issue of fact.

Appeal from district court, Hennepin county; REA, Judge.

Action by Mary Bentz against the Northwestern Aid Association, to recover the amount due on a policy of insurance issued to plaintiff's husband. Judgment for plaintiff, and defendant appeals.

Keith, Evans, Thompson & Fairchild, for appellant.

C. A. Ebert, for respondent.

COLLINS, J.

October 2, 1886, one William Bentz became a member of the defendant association, and so continued until his death, June 21, 1887. The plaintiff, his widow, is named as the beneficiary in the certificate or policy of insurance issued to the deceased when he joined the association.

1. If plaintiff has chosen the proper remedy, an issue of fact is presented by the pleadings in an action for the recovery of money only, and the defendant is in error when insisting that, upon its failure or refusal to levy an assessment with the proceeds of which it could meet and liquidate plaintiff's claim, she could only resort to equity, and compel an assessment. This position is based upon the provision in the certificate that “upon receipt at the principal office of this association of satisfactory proofs on blanks furnished from said office of the death *** of said William Bentz, this association will pay to Mary Bentz, or to the legal heirs of said William Bentz, seventy-five per cent. of the net proceeds of one full assessment at schedule rates upon all the certificate holders in good standing in this association at the date of said death, *** not, however, to exceed $2,000, to be paid within ten (10) days after the closing of the assessment for the same.”

In holding that appellant's contention is not well grounded, and must be rejected, that an action at law may be maintained in case of the refusal of an association to make an assessment for reasons of the character alleged in the answer herein, we are conscious of the diversity of opinion upon the question, and that a number of very respectable courts have held to the contrary; their decisions being that, when the officers of an association of this nature refuse to make an assessment to meet a death claim, appropriate proceedings must first be taken to compel a performance of this duty, and that a judgment for money without regard to an assessment, or to the amount which might be collected on an assessment, cannot be sustained. But, upon the other hand, the authorities are numerous and of high character that such an association is liable to suit for a breach of contract when it refuses to make the required assessment; the measure of damages being the amount assessable upon all insured, unless the defendant alleges in its answer, and by proof establishes the fact, that it should be less. Freeman v. Society, 42 Hun, 253; Lueders v. Insurance Co., 4 McCrary, 149; Association v. Houghton, 103 Ind. 286, 2 N. E. Rep. 763; Taylor v. Union, 94 Mo. 35, 6 S. W. Rep. 71; Burland v. Association, 47 Mich. 424,11 N. W. Rep. 269. And we think this view very clearly foreshadowed in Kerr v. Association, 39 N. W. Rep. 312.

In this state these associations are incorporated. We see no reason why a corporation of this character should be exempt from the common-law liability which rests upon other kinds of corporations, and on natural persons, for a breach of contract, when it refuses to assess its members to meet a proper claim. In many of the adjudicated...