Silvers v. Michigan Mut. Ben. Ass'n of Hillsdale

• Decision Date: 22 December 1892
• Citation: 94 Mich. 39,53 N.W. 935
• Parties: SILVERS et al. v. MICHIGAN MUT. BEN. ASS'N OF HILLSDALE.
• Court: Michigan Supreme Court

53 N.W. 935

94 Mich. 39

SILVERS et al. v. MICHIGAN MUT. BEN. ASS'N OF HILLSDALE.

Supreme Court of Michigan

December 22, 1892

Error to circuit court, Lenawee county; VICTOR H. LANE, Judge.

Action by Edward D. Silvers and others against the Michigan Mutual Benefit Association of Hillsdale on a benefit certificate. The court directed a verdict for defendant, and plaintiffs bring error. Reversed.

A. F. Freeman and Wood & Bird for appellants.

Watts, Bean & Smith, for appellee.

LONG J.

June 7 1887, the defendant issued to Frank L. Silvers its benefit certificate for the sum of $3,000, to continue in force by the payment of the sum of $1.50 on or before the 1st day of March and September of each year, and $1.70, to be contributed to the benefit fund at the death of a member whenever the condition of the benefit fund made it necessary to levy an assessment. By the certificate Mr. Silvers was made a member of the association, subject to its rules and regulations. The certificate contained the following "Sixty days after the satisfactory proofs of the death of said member, and upon surrender of this certificate, provided that such member is in good standing at the time of such death, the Michigan Mutual Benefit Association of Hillsdale hereby promises to pay, at their office in the city of Hillsdale, to Josie Silvers, (wife,) heirs, administrators, or assigns, a sum not to exceed $3,000." On the morning of February 17, 1889, the assured was found at his home, insensible from a pistol-shot wound. The assured's wife and two children were found dead from the same cause, and he died the following day. He left no family, no father or mother. His heirs at law consist of three brothers, two sisters, and two children of a deceased brother, who are plaintiffs herein. It is conceded by the defendant that the assured paid all dues and assessments which became due and payable in his lifetime. His wife, Josie, left a will, giving all her property to the assured. Plaintiffs herein sought to draw this fund through the estate and will of Josie. Her administrator with the will annexed made the proofs of death, and presented them to the company, and demanded payment thereon. The company refused to pay, and this suit was brought by such administrator. The suit being wrongfully commenced in the name of the administrator of Josie, this court, by mandamus, ordered that the name of the administrator be stricken out, and the suit left to stand in the names of those plaintiffs who are the beneficial parties. Wood v. Lenawee Circuit Judge, 84 Mich. 521, 47 N.W. 1103. The amendment to the declaration was made in the circuit court, and on the trial there the court directed the verdict in favor of the defendant company. The reasons the court below gave for such directions are: "(1) That the contract between the parties seems to provide that the defendant company was under no obligation to do anything more than to take voluntary assessments, and was then to discharge the policy by paying what that assessment might net, and it might be more or less; that the breach is a failure to make the assessment, rather than to pay any particular sum, and the declaration should have been upon that theory. (2) That the statute under which the defendant company is organized limits its operations to the raising of benefit funds, which shall inure to the benefit of such persons as may be designated who are within the class known as possessing insurable interests on the life of the assured, and the company cannot create liability against itself in favor of any person who is not within this class, whether the attempt to do so is by a direct contract, or whether the liability is sought to be raised by indirection; that the word "heirs" must be construed as those who are members of the assured's family, or other persons who have an insurable interest; that some of the plaintiffs-that is, the children of the deceased's brother-are not of that class." Plaintiffs bring error.

We shall discuss the last question first. The statute in force at the time the policy was issued, and under which the defendant company was organized, was passed in 1869. Laws 1869, p. 172. By the first section of this act it is provided that any number of persons not less than five may become a body corporate and politic for the purpose of securing to the families or heirs of any member upon his death a certain sum of money, to be paid by such corporation either out of its fund, or by an assessment made upon the members of such corporation, or upon the members of the class in such corporation to which such deceased member belonged, etc. It is provided by the act that upon the execution and filing of the articles of association the signers thereof, and those who may thereafter become associated with them, shall become a body politic and corporate for the purposes therein set forth. It provides for the election of not less than five nor more than twenty trustees, who are empowered to adopt by-laws, with power to change them at pleasure, except so far as they relate to the right of the corporation to assess their members, or the members of a particular class; and except, also, so far as said by-laws affect the rights and benefits belonging to or to be derived by the members; the articles of association to contain (1) the names of the persons associating in the first instances; (2) the names of the corporation, etc.; (3) the objects of the corporation the number of classes in such corporation, and the object of the division, etc.; (4) the number of trustees, etc.; (5) the terms and conditions of membership therein. This act was amended by the legislature in 1879, and several new sections added. Laws 1879, p. 64. But this amendment in no wise affects the question here involved. The contract was made with the assured. He paid in full all his assessments, and complied fully with all the requirements of the articles of association and its by-laws. He named in the certificate as beneficiary one who had an insurable interest in his life. He also named his heirs, who could take in case of the death of his wife before he deceased. This, by the statute and the laws of the company, he could do. Josie died, and by will devised and bequeathed the fund and its benefits to the assured, so that there was no one to take but the heirs when Josie and the children died. Certainly it was not the understanding of the parties that in such a contingency the policy would lapse, or that no person would be in esse capable of taking, so that the defendant company, though having taken payments from the assured during all these years, would escape liability altogether. Neither does the statute nor the laws of the company or the contract contemplate any such limitation upon the word "heirs." The plaintiffs here are the heirs of the member, within the meaning of the statute, and by the express terms of the contract are entitled to have the fund. The learned circuit judge, in passing upon the question, undoubtedly had in mind the language of the amended statute, instead of the statute as it then stood. In the amendment to the act, passed in 1887, it is provided that no co-operative or mutual benefit association shall issue a policy upon any life in which the beneficiary has not an insurable interest. Pub. Acts 1887, p. 196, � 16; 3 How. St. � 3960 d5. The court below said of this: "The statute which furnishes the authority for this company to do business of this character says that they are limited in their operations to the raising of benefit funds, which shall inure to the benefit of such persons as may be designated who are within the class known as possessing insurable interests in the life of the assured." The amendment referred to, and which the trial court evidently had in mind, while passed in June, 1887, did not take effect until September following the time when this contract was made, so that it could not have any effect on the contract, which must be construed under the former act, as that act entered into and became a part of the contract. But we may derive some light from that statute in aid of the legislative interpretation of the former one. If the former statute bears the interpretation given it by the court below, then the amendment in 1887 was unnecessary, as the legislature by express enactment by the amendment imports into the statute the very limitation which the court put upon the word "heirs" before the amendment. The statute of 1887 (section 3960 d 5) provides that the policy shall issue to a beneficiary who has not an insurable interest in the life of the assured; yet by a later clause of the same section it is...