
    O’Brien v. Home Ben. Soc.
    
      (Supreme Court, General Term, Third Department.
    
    February 7, 1889.)
    1. Insurance—Application—Errors of Agent.
    Where, in answering questions propounded on an application for life insurance, the applicant informs the company’s agent that he has a disease, but the agent erroneously records the answer as being in the negative, the company is responsible for the agent’s error, and is liable on the policy.
    '2. Same—Mutual Benefit—Refusal to Make Assessment.
    A benefit society, which by its certificate of membership is bound to pay upon the death of a member such a sum as may be realized by one assessment on all its members of the amount required by its rules, not exceeding a fixed sum, is liable in an action at law for such damages as the beneficiaries may sustain by reason of its refusal to levy the assessment.
    8. Same—Amount of Recovery.
    The amount of plaintiff's recovery in such case is the amount that would be realized by an assessment according to the terms of the certificate, and this may be ascertained by a computation based on the official statements made by the company, and filed in the insurance department for the year in which the insured died, and the year previous, showing the number, dates, and amounts of certificates, and the ages of the persons insured.
    ■4. Appeal—Review—Weight of Evidence.
    The evidence of the son and daughter of the deceased being to the effect that the insured made true answers to such inquiries, while that of the agent and medical examiner is directly to the contrary, a verdict for plaintiff will not be set aside as against the evidence.
    Appeal from circuit court, Albany county.
    Action by Thomas J. O’Brien, administrator, etc., of Peter O’Brien, de•ceased, against the Home Benefit Society of Hew York, on a certificate of membership issued to plaintiif’s intestate. The defense was that the insured had made false answers to questions in the application relative to his health. The plaintiff, a son, and Catharine M. O’Brien, a daughter, of deceased, testified that deceased told the agent and medical examiner that he had rheuma"tism, while the latter testified directly to the contrary. Plaintiff introduced the reports made by defendant to the insurance department for the years 1885 .and 1886, showing the number, dates, and amounts of outstanding certificates, and the ages of the persons insured. A computation was made by an insurance expert showing that an assessment under the provisions of the certificate would produce over $4,000. There was a verdict and judgment for plaintiff, and defendant appeals.
    Argued before Learned, P. J., and Landon and Ingalls, JJ.
    
      Blandy & Hatch, for appellant. E. J. Meegan, (E. Countryman, of counsel,) for respondent.
   Ingalls, J.

Peter O’Brien became a member of the Home Benefit Society •of Hew York, the defendant herein, on the 25th day of April, 1884, and thereafter, until his death, paid to the society the dues required of him. The society delivered to him the following certificate of membership, which he held .at his decease:

“Certificate
“No. 3,261. of $2,000.'
“Division Membership. Age,
“B. 59.
“Assessments, Annual dues, Annual dues are
“$5.50. $5.00. payable semi-annually,
“1st of January and 1st of July in each year
“Home Benefit Life and Accident Society of New York.
“Home Office, 98 Broadway, N. Y.
“This is to certify that Peter O’Brien, of 15 Payette street, city Albany, state of New York, has paid the sum of twelve dollars, being the amount required on application for membership, and is therefore accepted as a member of the Home Benefit Life and Accident Society of New York, in division B, subject to the conditions and requirements of the amended by-laws, rules, and regulations of the society, and stipulations contained in the application for membership, and also to the conditions printed hereon. The membership entitles Peter O’Brien, after the presentation of satisfactory proof of the affliction with disabling injury by accident of said member, subject to and in accordance with the charter, amended by-laws, rules, and regulations of the society, and of the conditions printed hereon, to nine dollars, weekly indemnity, not exceeding three months; or, if said member shall have become permanently and totally disabled by accident for life, i. e., so as to preclude the possibility of ever following any vocation; or, in the event of death, and upon satisfactory proofs thereof, the membership entitles Peter O’Brien, heirs or assigns, within ninety days after satisfactory proofs have been furnished to the officers of the society at the home office, to all of the amount realized from one assessment, not exceeding $2,000, payable at the home office of the society in New York: provided, said member continues to observe and comply with the conditions, requirements, and stipulations above referred to, and to duly pay the semi-annual dues and assessments of said society during membership; otherwise the membership, with all moneys to the society, and all claims against the same in his behalf, shall be forfeited, and this certificate shall be null and void, without any notice to said member, or any action thereon being taken by this society.
“Given under the seal of the society, at New York, this twenty-five of April, 1884.
[l. s.] “John T. H. King, President.
“George" W. Codward, Secretary.”

Peter O’Brien died at Albany on the 10th day of January, 1886, and on the following day the defendant was notified of his death. The proofs required to establish the claim for the insurance were furnished to, and retained by the defendant. The death of Peter O’Brien was caused by rheumatism, with which he was afflicted at the time he became a member of the society. The defendant refused to pay any part of the amount specified in the certificate, and neglected to make an assessment to raise the money as therein required. Such refusal and neglect were based upon the alleged ground that Peter O’Brien falsely stated in answer to a question propounded to him, and included in his application for membership, that he had never had rheumatism. The application was prepared by John S. Slingerland, who was at the time an agent of the defendant, and in that capacity conducted the proceeding, and inserted in the application the answers of the applicant to the questions asked him. Upon the trial it became a material question of fact whether Peter O’Brien did answer as recorded by such agent, in regard to his ever having had rheumatism, and upon such question there was a direct conflict in the evidence. The court submitted such question of fact to the jury for their determination, by a charge eminently fair and impartial, and the jury found adversely to the defendant. The evidence upon that question is such that the finding of the jury should not be disturbed by this court. If the agent of the ■defendant by mistake inserted in the application an erroneous answer, which the applicant did not in fact make, the defendant must be held responsible for the error of the agent, and must abide the consequence thereof. Flynn v. Insurance Co., 78 N. Y. 568; Higgins v. Insurance Co., 74 N. Y. 7; Grattan v. Insurance Co., 80 N. Y. 281, 92 N. Y. 275. In view of the finding of the jury, and the facts and circumstances of the case, we assume that such answer of the applicant was erroneously inserted by the agent, and therefore furnishes no ground for avoiding the claim in question.

Begarding the nature of the application, and of the certificate granted thereon, and the reciprocal duties, obligations, and relations thus created between the parties to the transaction, we are convinced that the same should be regarded in the nature of a contract between the parties thereto, and, upon performance by the applicant of his undertaking, the defendant became obligated to.cause the assessment to be made and collected, and to pay to the party entitled thereto the money thus raised, not exceeding $2,000. ■ The duty of the defendant was plain, and required no direction from the court to enable it to put in operation the machinery by which the money was to be raised by such assessment to pay the claim in question. The defendant, instead of proceeding in that direction, absolutely refused to recognize the claim, or any part thereof, and chose to resist the same upon a ground which it was not successful in establishing at the trial, and we perceive no substantial reason why the defendant should not accept the result of the experiment. The plaintiff, having notified the defendant of the death of Peter O’Brien, and having furnished the proofs required in support of the claim under the certificate, and in accordance with the rules and regulations of the society, seems to have performed the requirement of the obligation on his part, and the defendant was called upon to cause the assessment to be levied in order to discharge its obligation. We discover no substantial reason for casting upon the plaintiff a burdensome and expensive proceeding in the court, to compel an assessment, when it was not only the duty of the defendant to cause it to be made, but it possessed every facility for accomplishing the same. We are convinced that this action is proper in form, and can be maintained. Freeman v. Society, 42 Hun, 252; Fulmer v. Association, 12 N. Y. St. Rep. 347; Hankinson v. Page, 12 Civ. Proc. R. 279. In the case last cited the court, at page 288, say: “Upon refusal to make the assessment, it would be liable at law for such sum as might have been collected if it had fulfilled its undertaking. It would not be permitted to allege that nothing was due the plaintiff because ■of its own default in doing what it had agreed to do.”

The plaintiff upon this trial seems to have sufficiently supplied by evidence, which was competent, the failure of proof, for the lack of which the new trial was granted by this court. O'Brien v. Society, 46 Hun, 426. The evidence thus furnished certainly tends strongly to show that an assessment would be likely to produce the amount required to satisfy the plaintiff’s claim specified in the certificate. We have examined the exceptions taken by defendant’s counsel during the trial, which are not involved in the foregoing discussion •of the case, and, without stopping to discuss them in detail, we remark that we have discovered no error in the rulings of the court which can have materially prejudiced the defendant’s case, and which requires a reversal of the judgment. The judgment must be affirmed, and a new trial denied, with costs.

Landon, J.,

(concurring.) The contract is to be fairly construed. Its terms, so far as they are plain, must govern. Special phrases of equivocal meaning are not to be resolved so as to defeat the manifest purpose of the entire contract. One party intended to purchase insurance, the other to sell it, and the instrument must be construed so as to support that intention. The defendant, upon performance as specified on the part of the assured, promised to pay to his heirs, in the event of his death, not a fixed sum, but “all of the amount realized from one assessment, not exceeding $2,000.” The defendant also agreed that, upon the death of the assured, it would assess the members of the society according to a printed schedule contained in its bylaws. It did not agree to assess some, and not all; not those in one division, and except those in another division, but all of them; and it agreed to pay to-the heirs of the assured “the pro rata of the amount so derived,” not exceeding $2,000. This the contract says means “all of the amount realized from one assessment, not exceeding $2,000.” The defendant refused to levy any assessment, and refused to pay the plaintiff. It put its refusal upon the ground of fraud in procuring the certificate. The issue of fraud has been determined upon this trial against the defendant. Accepting the verdict in that respect, the case stands that the defendant unjustifiably refused to levy the assessment and pay the proceeds to the plaintiff. It ought to pay him,, and the only question is, how much? When the case was here upon a former appeal, there was no evidence tending to show what amount could be realized from one assessment, and there was no evidence in the case by which to-measure the amount of the plaintiff’s recovery. The plaintiff had recovered the largest possible sum without evidence tending to show that any sum could be realised from an assessment. It seemed to me that, in an action at law to recover a sum of money on contract, the plain tiff must prove, as a part of his case, facts enough to enable the jury to compute the amount due him. Ho method of ascertaining the amount in an action at law was then presented or suggested, and, not knowing that any was available to the plaintiff, I suggested that possibly the plaintiff would be obliged to have recourse to equity, in order that the proper assessment should be levied, collected, and its proceeds paid to the plaintiff. But upon the re-trial the plaintiff has availed himself of the reports made by the defendant to the state insurance department, and, from the data contained in them, has submitted evidence tending to show that an assessment levied according to the terms of the contract would amount to much more than $2,000. By the contract the defendant does not agree to levy the assessment, unless the condition of its funds makes an assessment necessary; in other words, whether it shall levy an assessment in order to pay the plaintiff is a matter for it to decide. It is true that the amount of the assessment may be more than the amount “derived” or “realized” from it, but, in the absence of an actual test, it is the best evidence obtainable; and since better evidence, namely, the actual levy and collection, is withheld by the defendant, it should not be heard to complain of the absence of evidence caused by itself. If the defendant had performed its contract, it would have paid the plaintiff $2,000. Hot performing it, it owes him $2,000, and hence the recovery is right. The defendant complains that its testimony, tending to show that an assessment would not have produced $2,000, was improperly excluded. All the offers of testimony were based upon propositions at variance with the contract with the assured respecting the assessment. It is no answer to the plaintiff that the defendant’s agreements with its other members would not permit it to make the assessment which the contract calls for. I concur for affirmance.'

Learned, P. J., concurs.  