Von Uhl v. Trempealeau County Mut. Ins. Co.

• Decision Date: 29 November 1966
• Citation: 33 Wis.2d 32,146 N.W.2d 516
• Parties: Theodor H. VON UHL, Respondent, v. TREMPEALEAU COUNTY MUTUAL INS. CO., a Town Mutual Insurance Co., Appellant.
• Court: Wisconsin Supreme Court

Page 516

146 N.W.2d 516

33 Wis.2d 32

Theodor H. VON UHL, Respondent, v. TREMPEALEAU COUNTY MUTUAL INS. CO., a Town Mutual Insurance Co., Appellant.

Supreme Court of Wisconsin.

Nov. 29, 1966.

Fugina, Kostner, Ward, Kostner & Galstad, Arcadia, for appellant.

Burr Tarrant, Whitehall, for respondent.

BEILFUSS, Justice.

The sole issue is: Was the fire and wind damage insurance policy suspended on April 13, 1964?

Ch. 202, Stats., regulates town mutual insurance companies in Wisconsin. Particularly involved in this case is sec. 202.11, which in part provides:

'Assessments; notices; nonpayment; borrowing money. (1) When the amount of any loss shall exceed the funds on hand the president shall convene the board of directors who shall levy an assessment which shall be at the same rate upon all property insured at the time of the loss. The board may assess up to any amount necessary to pay incurred losses and expenses and may include in such assessment an amount not exceeding two mills in anticipation of future losses. The board may also levy an assessment at any time for the purpose of carrying on the business of the company including payment of losses, expenses, reinsurance, borrowed money or the establishment of reserves.

'* * *

'(4) Every member who shall fail to pay his assessment within the time specified in the notice sent to him shall pay to such corporation a fine of 2 per cent of the amount of such assessment for each week or part thereof during which the same shall remain delinquent, and no payment shall be made by the company upon the policy of any member if at the time he shall suffer a loss he shall be in default and shall have failed to pay his assessment prior to the expiration of 30 days from the time limited in said notice.'

The trial court concluded that Von Uhl should recover because the company's acceptance of the partial payment of the 1963 assessment, together with its past record of accepting late payments, were sufficient to constitute a waiver of the timely payment provision of sec. 202.11(4), Stats.

The terms 'waiver' and 'estoppel' are often not distinguished and used interchangeably. 'Waiver' is the voluntary and intentional relinquishment of a known right; intent to relinquish the right is an essential element of waiver. 'Estoppel,' on the other hand, consists of the action or nonaction of one party which induces reliance thereon by another, either in the form of action or nonaction, to his detriment. Further, intent to waive may arise as a matter of law from the conduct of the parties, or may be determined as a question of fact where the inference does not conclusively arise as a matter of law. Hanz Trucking, Inc. v. Harris Brothers Co. (1965), 29 Wis.2d 254, 264--267, 138 N.W.2d 238.

In the instant case there are no stipulated facts directly indicating that the company intended to relinquish its right to timely payment. While it may be inferred from the facts that the company intended to waive its rights, this appears more properly to be a case of estoppel because of Von Uhl's claim that he relied on the company's conduct to his detriment. Whether it be waiver or estoppel in this instance, the legal effect is the same.

The company contends that the requirements of sec. 202.11(4), Stats., may not be waived by a town mutual insurance company, and even if the statute can be waived, it was not waived in this case.

The pertinent part of sec. 202.11(4), Stats., provides:

'* * * no payment shall be made by the company upon the policy of any member if at the time he shall suffer a loss he shall be in default and shall have failed to pay his assessment prior to the expiration of 30 days from the time limited in said notice.'

In support of its position the company relies upon the letter of the statute, claiming that after partial payment Von Uhl was still 'in default' under sec. 202.11(4), Stats., so long as he owed any part of the $70.80 assessment. The company further asserts that the statutory mandate of sec. 202.11(4) cannot be waived by private parties. For support of this proposition it relies upon the following statement in Jones v. Preferred Accident Ins. Co. (1938), 226 Wis. 423, 425, 426, 275 N.W. 897, 898:

'Because that provision is required by statute, it is mandatory and obligatory on the insured, as well as the insurer, and there is applicable the rule that when the legislature has declared--

"the public policy of the state to be that that which had theretofore been subject to contract between the parties shall hereafter be by certain prescribed forms and with specific conditions concerning the respective rights and duties of the parties thereto, the statutory provisions step in and control and regulate the mutual rights and obligations rather than the provisions of any contract the parties may attempt to make varying therefrom.' (Case cited.)

'When the legislative will is expressed in the peremptory terms of such a statute, it 'is paramount and absolute, and cannot be varied or waived by the private coventions of the parties.'

The by-laws of the company (which were incorporated within Von Uhl's policy) provide that all policies are 'subject to the provisions of the Wisconsin Statutes.' There is no question that Von Uhl failed to pay any part of his July 31, 1963, assessment within 30 days from the time limited in the notice.

Town mutuals are mutual benefit insurance societies which annually levy proportionate assessments on members to cover payment for casualty losses incurred by members during the previous year. Timely payment of the assessment puts a member's policy in effect for the next year. The companies also make special assessments when their reserve funds get low. Several times this court has adjudged the legal effect of by-laws of mutual fire insurance companies and statutes which provide that no payment shall be made for losses occurring to a policyholder in default of payment of his assessment. The gist of the decisions is that such clauses are valid and...