Earnshaw v. Sun Mut. Aid Soc.

• Decision Date: 14 March 1888
• Citation: 12 A. 884,68 Md. 465
• Parties: EARNSHAW ET AL. v. SUN MUT. AID SOC. OF BALTIMORE.
• Court: Maryland Court of Appeals

12 A. 884

68 Md. 465

EARNSHAW ET AL. v. SUN MUT. AID SOC. OF BALTIMORE.

Court of Appeals of Maryland

March 14, 1888

Appeal from superior court of Baltimore city.

Action by the beneficiaries to recover on a certificate of the defendant, a mutual aid society. Judgment was entered for the defendant, and plaintiffs appeal.

Phil. H. Tuck and C. C. Magruder, for appellants.

Fred C. Cook, for appellee.

MILLER J.

The instrument sued on in this case is a certificate of membership in a duly incorporated mutual aid society, which was issued to John Earnshaw on the 15th of May, 1882. It contains many conditions, only two of which have any bearing upon the questions presented by this appeal. By the second condition (read as applicable to the circumstances of the present case) the corporation stipulated that the beneficiary designated in this certificate by the member to whom it is issued "shall be entitled to mortuary benefits to be assessed on the membership according to the table of rates and by-laws of the society, and the amount so collected to be paid at the office of the said society within ninety days after the proof of death shall have been satisfactorily established, provided, the member shall have promptly paid all dues and assessments:" and "provided, however that in no case shall any benefit for this certificate exceed the sum of ten thousand dollars." And by the twelfth condition it was "expressly agreed and understood by and between the parties hereto that all suits at law or in equity for the recovery of any claims arising under this certificate must be commenced within six months from the date of such loss," (which in this case was the death of the assured;) "and the failure to commence such suits within the time specified shall be a waiver of all rights and claims under this certificate."

When this suit was brought, no assessment under the certificate had been made, and it is contended that until this was done and they had the money in hand realized from the assessment, no action at law will lie against the society. But in our opinion, under a declaration properly framed for that purpose, a suit at law can be maintained against the corporation for a refusal or neglect to make the assessment. It was their duty to make it, under the contract; and if, by breach of this duty, injury has resulted to the plaintiffs, a court of law is the most appropriate tribunal to afford them redress. There may be some difficulty as to the measure of damages in such an action, and in enforcing the judgment after it is recovered. In some cases such contracts have been declared on in assumpsit as simple contracts of insurance for the maximum amount stated in them; and it has been held that the recovery may be such amount, unless the defendant shows, by pleadings and proof, that such sum should be reduced. Lueder's Ex'r v. Annuity Co., 12 F. 465; Relief Ass'n v. Houghton, 103 Ind. 286, 2 N.E. 763. But in Curtis v. Life Co., 48 Conn. 98, the action was in assumpsit and the declaration assigned only the breach of a promise to pay the maximum amount, and the plaintiff recovered judgment. The case came before the supreme court by motion in error, bringing up for review a judgment of the trial court overruling a motion in arrest founded upon the insufficiency of the declaration. The court held the declaration to be fatally defective, because, among other things, it contained no allegation of any neglect to lay the assessment, and said: "The thousand dollars is not promised to be paid by the terms of the contract, but is mentioned merely as the limit of liability." The judgment below was accordingly reversed, but the case was remanded, in order, as we assume, that it might be relied upon an amended declaration. This case is certainly an authority for the position that an action at law, if brought in proper form, can be maintained against the company, and, to the extent above noted, takes, as we think, the more correct view of the law as to what the declaration should contain, and the extent of the recovery. We, however, entirely concur in the remarks made by the judge in 12 F. 472, to the effect that when a loss occurs under such a contract, and satisfactory proof thereof is made to the president and secretary, their duty to make the required assessment ensues, according to the express terms of the contract, and, if they fail to perform such duty, the other party is not to be left remediless; that there must be some one answerable at law for the contracts the corporation makes, and judgments on such contracts must be against the corporation, for otherwise a policy like this would be of little worth, and such a scheme of insurance be a mere delusion and snare. We think, then, that if there had been a declaration in this case, which, after other appropriate averments, had charged a failure or refusal to make the assessment, and then averred that, if such assessment had been duly made, it would have resulted in the collection of $10,000, and claimed that sum as damages for such failure or refusal, as substantially set forth in the amended declaration (which was exhibited to us in argument) in the case of Mrs. Osbourne against this same society, on another like certificate, in the court of common pleas, it would have enabled the plaintiffs to recover what upon proof they could show such assessment would have yielded if it had been duly made. There might be some difficulty in obtaining the requisite proof, but the officers of the society could be called as witnesses, and made to disclose how many members there were at the time the assessment should have been made, and what was their ability to pay. But we do not propose to decide in advance what may be legal and competent evidence on this subject, nor to say how a judgment, if it should be recovered, could be enforced apart from the property which the corporation may own. All that we mean to say is that an action at law upon a declaration of this character may be maintained. In fact, we have neither found nor been referred to any case in which it has been expressly decided that no action at law will lie against the corporation before an assessment had been made. In Essender's Case, 59 Md. 463, and Yoe's Case, 63 Md. 86, the...