Ferrenbach v. Mutual Reserve Fund Life Ass'n

• Decision Date: 09 March 1903
• Docket Number: 1,768
• Citation: 121 F. 945
• Parties: FERRENBACH v. MUTUAL RESERVE FUND LIFE ASS'N.
• Court: U.S. Court of Appeals — Eighth Circuit

121 F. 945

FERRENBACH v. MUTUAL RESERVE FUND LIFE ASS'N.

No. 1,768

United States Court of Appeals, Eighth Circuit.

March 9, 1903

C. B Williams (R. P. Williams, on the brief), for plaintiff in error.

James C. Jones (William C. Jones, Lon O. Hocker, and George Burnham, Jr., on the brief), for defendant in error.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

THAYER Circuit Judge.

This action was brought originally by Jacob Lambert against the Mutual Reserve Fund Life Association, a corporation organized under the laws of the state of New York. After the trial of the cause, and the rendition of a judgment therein in favor of the defendant, Jacob Lambert died, whereupon Thomas Ferrenbach, executor of his estate, was substituted as plaintiff in place of the deceased. The action was brought to recover premiums amounting to $2,665.65 which Jacob Lambert paid during his lifetime to the defendant company as assessments or premiums upon a policy of insurance upon his life, which appears to have been issued by the defendant company to the deceased on April 5, 1883. The premiums, as they were assessed and demanded, were regularly paid by the insured from that time forward until May 3, 1899, when an assessment or premium on the policy that was levied by the defendant company March 15, 1899, was tendered to the company's agent at the city of St. Louis, Mo., where the deceased resided, but was declined by the agent unless the insured submitted to another medical examination before the company's medical examiner, which examination he declined to undergo, and could not undergo, in fact, because he had become diseased, and was at the time over 70 years old having taken out the policy in question at the age of 56. The defendant company declined to accept the premium, amounting to $77.50, that was tendered by the deceased on May 3, 1899 because, as the company asserted, it was overdue, and should have been paid not later than May 1, 1899. The deceased, on the other hand, insisted that he had the right to pay the premium known as 'Mortuary Call 103' on May 3, 1899; and because it was refused, and because, following such refusal of the premium, the policy was declared null and void and forfeited by the defendant company, he counted upon such conduct on its part, in the first count of his complaint, as a breach of the contract of insurance, which entitled him to recover the premiums that had been paid since the issuance of the policy.

The case hinges on the question whether the premium that was tendered on May 3, 1899, was tendered in time to avoid a forfeiture, and the undisputed facts upon which the decision of that question depends are these: The policy of insurance which was issued to the insured, in its opening paragraph, contains the following clause:

All mortuary assessments payable at the office of the association within thirty days from the date of each notice.'

The certificate further provides that:

'A notice addressed to a member at his post-office address as appearing upon the books of the association, according to its usual course of business, shall be deemed a sufficient notice, and proof of mailing the same, according to the usual course of business of said association, shall be deemed sufficient proof of compliance herewith on the part of said association.'

A similar provision to the last is found in the constitution and by-laws of the company, which further provide that:

'An affidavit of or proof of addressing and mailing the same according to the usual course of business of said association, shall be taken and deemed as evidence, and shall be, constitute, and be deemed and held to be conclusive proof of due notice to said member and every person accepting or acquiring any interest thereunder.'

The notice of the assessment or premium in controversy, which was levied, as above stated, on Marcy 15, 1899, contained a statement that it was payable 'within thirty days from the date of this notice. ' A notice of mortuary call No. 103, in the usual form, and containing the statement aforesaid, was by the defendant company deposited in the mail at the city of New York on March 31, 1899, postage prepaid. In due course of mail it reached the city of St. Louis, Mo., where the deceased resided, on April 2, 1899; but, as that day fell on Sunday, it was not delivered to the deceased in due course of mail until the following Monday morning, April 3, 1899. The deceased handed this notice to an agent of his who had charge of his business affairs, with directions to pay the assessment. This agent on May 1, 1899, went to an office building in the city of St. Louis where the defendant had prior to that time, and up to March 22, 1899, maintained its office, with the money necessary to pay the assessment, but found that the defendant company had changed its location. On May 3d, learning to what place the defendant company had removed its office, he went to that place on May 3d, and tendered the full amount of the assessment, to wit, $77.50; but the company's agent declined to accept the money, for the reasons stated heretofore, unless he would undergo another medical examination. Thereafter as the plaintiff declined to undergo, and, on account of his physical condition, could not undergo, another medical examination, the company declared his policy, and all payments thereunder, forfeited.

It is contended in behalf of the defendant company, and that view was adopted by the lower court (resulting in a judgment in the defendant's favor), that the word 'notice,' as used in the certificate or policy and in the company's by-laws, means the printed paper by which knowledge of an assessment is communicated to the insured, and that the 30 days limited within which to make payments must be computed from the date given to or borne by that paper. On the other hand, the plaintiff contends that the word 'notice' means knowledge or information communicated to the insured by means of the paper, and that the 30 days are to be computed from the time when, in due course of mail, such knowledge or notice comes to the insured. It is not claimed that, if the paper goes astray or is lost in the mail, the insured will not be affected with knowledge of the assessment until it arrives; but it is insisted that as the object is to give the insured knowledge of an assessment and as the mere execution of a notice or the mere deposit of the same in the mail cannot impart knowledge, the agreement of the parties should be construed to be that the insured should be conclusively presumed to have knowledge of an assessment on such day as, in due course of mail, the notice of the assessment ought to come to hand, and that the 30-day period runs from that date. It will be observed, therefore, that, according to the company's theory, the premium in question was payable May 1, 1899, while according to the plaintiff's theory, it was payable as late as May 3, 1899 because the notice arrived on April 3, 1899, and the computation, as he contends, should be made from that day, excluding April 3d, and including May 3d, according to the general rule for the computation of time.

The question presented is not novel, but has been decided by other courts. As early as the year 1887 it was held by the Court of Appeals for the state of Kentucky in National Mutual Benefit Ass'n v. Miller, 85 Ky. 88, 93, 2 S.W. 900, 901, that, where the charter of a mutual benefit society provided that 'any member failing to pay his assessment within thirty days from the date of notice shall forfeit his membership, * * * ' the time within which payment is to be made ' is not to be computed from the actual date of the notice, or from the day it was mailed to the member, but, when sent by mail, from the time at which the notice would, in the regular course of mail, be received by the member. ' In the case of United States Mutual Accident Ass'n of the City of New York v. Mueller, 151 Ill. 254, 37 N.E. 882, 885, the Supreme Court of the state held, in the year 1894, that although the by-laws of the order contained the provision that 'payments are to be made * * * within thirty days from the date of the notice thereof,' that meant from the date of the service of the notice, and not the date of the writing. And since this case was submitted our attention has been called to a very recent decision of the same court in the case of Cronin v. Supreme Council Royal League, 65 N.E. 323, wherein the same doctrine is reiterated, namely, that, where a by-law of a beneficial association provides that payment of assessments shall be made within 30 days of the date of the notice, a member is not in default until 30 days from the time notice is received. This rule of construction was also adopted and approved by the Supreme Court of Minnesota in the year 1898 (Bridges v. National Union, 73 Minn. 486, 496, 76 N.W. 270, 409, 77 N.W. 411); that court saying:

'The 'date of the notice,' in cases of this kind, is not the date printed on the notice itself, but, when sent by mail, is the day of the date on which the notice is mailed, or is or should be received by the member in due and regular course of mail.'

That court also held, following the general rule applicable to the construction of insurance policies, that, in placing a construction on such a provision, that construction should be adopted which is most favorable to the insured, and will avoid a forfeiture. Likewise, the Supreme Court of Louisiana in the year 1871, in the case of Wetmore v. Mutual Aid & Benevolent Life Ass'n, 23 La.Ann. 770, held that where a provision of a policy issued by a benevolent association required members of the association to pay a small assessment within 30 days after the death of a member, being notified thereof by...