
    MYRA L. WADSWORTH, Respondent v. THE JEWELERS’ AND TRADESMEN’S COMPANY OF NEW YORK, Appellant.
    
      Mutual Insurance Associations—Beneficiary, right to have applied to payment of loss, fund on hand at time of death of the member in respect of whose death the loss is payable and if that be insufficient then to have the deficiency made up from monies realized to such fund from an assessment therefor to be made and paid so far as such money will go.
    
    The certificate of membership in this case provided for the payment to plaintiff upon the death of Elbert E. "Wadsworth of the sum of $4,000 from the death fund of the defendant at the time of such death, or from- any money that should be realized to the said fund from the next assessment to be made as thereinafter set forth, and also provided that in case the death fund should be insufficient to meet existing claims by death an assessment should be made on the members according to certain rates designated therein, and the net amount of such assessment should go into the death fund. Elbert E. Wads-worth was a charter member, and he with others at the time of receiving their certificates of membership paid what is variously called “ first assessment” or “ first death assessment.” The amount thus paid less-20 per cent aggregated $1,798.35 which amount was on hand at the time of the death. Elbert E. Wadsworth’s death was the first death. After his death the Secretary of the company sent to the members thereof a notice, headed Mortuary Call Number 1, setting forth among other things the death of Wadsworth and stating “ The amount of is now due and payable within thirty days from date of this notice in order to maintain your certificate in force.” In each notice the blank was filled in with the amount assessable on the member to whom it was addressed. Under this call there was realized to the death fund the sum of $1,749.07.
    The constitution of the association provided, among other things, as follows: “ Article 4, Sec. 3. In case a death claim is proven while a single assessment is insufficient to pay the said claim in full, there shall be paid in full satisfaction of such claim a sum pro-rata of the membership and benefits in force at the time of the death of such member.” “Sec. 4. Any member may pay advance dues or assessments subject to the approval of the Executive Committee.”
    
      Held, (1) That plaintiff was entitled to recover the sum of $3,547.42, being the aggregate of the two sums of $1,798.35 and $1,749.07.
    (2) That the clause as to the payment of a sum pro rata was meaningless, or at the best vague and indefinite, and not applicable to facts shown by testimony.
    Before Sedgwick, Ch. J., Freedman and O’Gurman, JJ.
    
      Decided May 5, 1890.
    Appeal by defendant from judgment entered upon findings and conclusions of law made by a judge sitting by consent of parties without a jury. The facts sufficiently appear in the opinion and the head note.
    
      Rudd & Hunt, attorneys, and James M. Hunt of counsel, for appellant, argued :—
    I. All organizations incorporated under chap, 175 of the laws of 1883, as amended by laws of 1887, chap. 285, raise the money paid to the beneficiaries of deceased members by means of assessments. The majority of such organizations wait until a death occurs before levying an assessment.to make the payment to the beneficiary, and then such'payment cannot be made until the assessment be levied and collected. But if the assessment should be made and the money collected before the death to be provided for occurs, so that a death fund should be on hand, then the payment in a given case could be made immediately upon receipt of proof of death. The latter plan is expressly sanctioned by the language of the statute, viz : “ assessments or any of them collected, or to be collected from the members thereof.” § 3 of chap. 175 of the laws of 1883. And this latter plan is the one adopted by the defendant, and accordingly each member upon joining the organization was obliged to pay his “ first death assessment,” in order that there might be a “ death fund,” from which payment to the beneficiary of the member who should first die could be promptly made. Under this plan, it was obviously necessary as soon as a member died to levy an assessment and place the proceeds in the “ death fund ” to provide for the payment which it would be necessary to make upon the occurrence of the next ensuing death.
    II. Plaintiff is entitled to receive only the proceeds of the first assessment, (a.) Elbert A. Wadsworth upon becoming a member of defendant, agreed that if he should be the first member to die, his beneficiary should receive nothing in addition to the amount realized to the “ death fund ” from the “ first death assessment.” The constitution and bylaws, which constituted a part of Wadsworth’s agreement, contained the provision that if a death should be proven “ while 'a single assessment is insufficient ” to pay same in full, there should be paid “ in full satisfaction of such claim ” a certain proportion of that assessment: As Mr. Wadsworth’s death was the first death to occur among the members of defendant, the “ single assessment” referred to in the above mentioned section of the constitution was the assessment paid by all members upon joining as the “ first death assessment,” The only possible construction that can be placed upon the above provisions is that Wadsworth; in making that contract, agreed that if his death should be the “ first death ” to occur among the members of the defendant, the amount his beneficiary should receive would be confined to the amount that should be in the “ death fund ” contributed by members upon joining as “ first death assessment.” As, therefore, Wadsworth’s death was “ the first death ” to occur among the members of the defendant, his widow, the plaintiff, is entitled to nothing beyond “ the first death assessment ” which had been turned into and constituted the “ death fund ” at the time of Wadsworth’s death, (b.) Under the contract made, only one full assessment can be applied to the payment of a single death claim. Wadsworth in his lifetime stood in a like position with every other member of the defendant organization. If Wadsworth in his lifetime or any surviving member of defendant could successfully resist an attempt to levy two assessments and apply the full proceeds thereof to the payment of a single death claim, then, as defendant is organized for the mutual benefit of its members, two full assessments could not be applied to the payment of the claim arising on Wadsworth’s death. There is no authority to levy and collect but a single assessment for a single death. It cannot be claimed that Wads-worth’s agreement was in any respect different from the agreement of every other of defendant’s members. The court below has found that by that agreement, upon the death of a member, á single definite sum should be paid by each member—i. e., a single assessment. The amount of this single assessment is fixed with definiteness and' precision by the schedule of rates of assessment, which schedule is carefully set forth in the application for membership in the constitution and bylaws and upon the certificate of membership. According to that schedule, had some other member died on October 12, 1888 and had Wadsworth lived, then to replenish the “ death fund ” so that the next occurring death claim could be paid, Wadsworth would have been called upon to pay an assessment, and, as he then would have been 43 years old his rate per $1,000 would have been $1.54, and his ben-' efit subscribed for being $4,000, the amount of his assessment to meet the second death would have been $6.16. In like manner, the assessment of each member to meet a death claim is computed, and no authority can be found for levying more than one assessment for one death. Furthermore, section 3 expressly states that only a single assessment can be applied to a single death claim. Nothing which contradicts or neutralizes the above provisions is contained in section 2 of article 5, of constitution and by-laws. It should be noted that while the defendant was a young and small organization when Wadsworth died, yet its constitution and by-laws were necessarily framed to provide for the contingencies which would arise when defendant became an. older and larger organization. While defendant ■ should remain young and small, deaths among the members would not occur so rapidly but that an assessment could be levied and collected between the payment of one death claim and the occurrence of the next ensuing death. But when the membership should become large, it required no prophetic eye to see that two dr more deaths might occur during the thirty days required to collect an assessment. Plainly it was to meet the requirements of such emergencies that the language found in section 2 of article 5 was used. Note the words—“ a death claim or claims.” The same construction is applicable to the language of the certificate of membership. The provision there is to pay $4,000, not absolutely, but “ from the death fund of the company,” etc., “or” from the proceeds of the next assessment. The word “ or ” is here used for a definite purpose. Had the word “and ”been used there might have been some foundation for the claim that both the existing death fund and the next assessment were applicable to the plaintiff’s claim. But the use of the word “ or” in this connection indicates that not both, only one or the other is applicable ; if the death fund shall contain a full assessment, and no other death has occurred demanding payment therefrom, then the death fund alone is applicable ; but if the death of the given certificate holder occur so rapidly, ensuing upon other death or deaths, that an assessment cannot be levied and collected upon each individual death before the next occur, then the meaning of the word “ or ” becomes significant, and recourse can be had to the proceeds of the next assessment to be levied “ as hereinafter set forth.” Note the words “existing claims by death.” But “ no claims shall be otherwise due or payable ” except from one or the other of the above described funds—i. e., either the “existing death fund or” the proceeds of the next assessment. There is no principle of law any better or more thoroughly well-established than this : In construing a written contract such a construction, if possible, must be adopted as will give some force and effect to every part of such contract. Wood v. Sheehan, 68 N. Y. 365, 368 ; Ward v. Whitney, 8 lb. 442, 446 ; Hamilton v. Taylor, 18 lb. 358. Any construction of the contract made between Wadsworth and defendant which permits two full assessments to be applied to the payment of plaintiff’s claim, gives no force or effect whatever to sec. 3 of art 5, and the provisions relative to the schedule of assessment rates upon each death. But the construction above indicated gives force and effect to every part of the contract, and creates repugnancy in no part. It follows therefore that only one assessment was applicable to plaintiff’s claim, and as Wadsworth’s death was the “ first death” among the members, the “first death assessment ” which made up the death fund at the time of his death -was alone applicable to the payment of plaintiff’s claim by reason of his death. It should be noted that in neither O’Brien v. The Family Fund, 46 Hun, 426, the Darrow case therein referred to, nor in any other reported- case against a Mutual Benefit Society, has any decision been made which is in any particular at variance with the construction of this contract herein contended for. The plan of assessment disclosed in those cases contemplated no assessment until the actual occurrence of the death to be provided for. But the plan under which the defendant herein makes its assessments contemplates the levying and collection of the assessment prior to the occurrence of the death to be provided for, so that there shall always be on hand, except when the same is rendered impossible by the two frequent occurrence of deaths among its members, a death fund from which a death claim may be paid promptly upon receipt of proofs of death.
    III. The plaintiff was entitled to receive only the amount of the check which has been paid to her. It should be borne ’ in mind that the defendant is a Mutual Benefit Society organized for the mutual benefit of all its members. As has been already shown, during the earlier existence of such a society there cannot be members enough to pay by assessment at the rates adopted by the society upon its organization, death claims in full to the amount specified in the certificate issued to a deceased member. But at each assessment the member whose certificate reads $2,000 pays only one-half as much as the member whose certificate reads $4,000, and only two-fifths as much as the member whose certificate reads for $5,000. This difference in assessments is perfectly equitable, if the member paying the larger assessment should secure payment to his widow, upon his death, of an amount proportionately larger than that which would be secured to the widow of the member who pays the smaller assessment. Unless there were any other provision in the constitution therefor, while one assessment yields to the death fund less than $2,000, the beneficiary of a $2,000 certificate would realize as much as the beneficiary under a $5,000 certificate, although the $2,000 member has paid only two-fifths as much as the $5,000 member. It was, therefore, to remove this -patent inequality, and make. the benefits realized while the society be small, proportionate with the amount of assessment paid, that section 3 of article 5 of the constitution was adopted. This section was much criticised by the counsel for the plaintiff before the courb below, and perhaps it is open to criticism in that its meaning is not expressed with the clearness and accuracy which should and does usually distinguish legal documents; But the charter members of this society, of whom the deceased Wadsworth was one, themselves framed their constitution and by-laws without the aid of a lawyer. We submit, however, that the meaning which this section 3 of article 5 was intended to express is perfectly clear. Certain it is that this section can have no other meaning than that already outlined, and that its sole purpose was to remove the inequitable difference that would otherwise have existed during the early days of the society between assessments paid and amounts realized by beneficiaries. It was evidently intended that the beneficiary under a $2,000 certificate whose decedent had paid only two-fifths as much as the $5,000 member should not receive just as much as the beneficiary under a $5,000 certificate. And as one member might have had issued to him upon application a certificate for $2,000, and another certificate for $3,000, upon the death of such member a death claim for $5, 000 would arise, although no $5,000 certificate had been issued, therefore instead of saying in this section that the sum paid should be according to the proportion which the amount named in the certificate of the deceased member should bear to the amount named in the largest certificate issued, these charter members used the expression “pro rata of the membership and benefits in force,” intending thereby to include the total amount of benefits in certificates issued to a single member. This is certainly the meaning, and the only meaning of this section 3, as is alleged in the sixth paragraph of the answer herein. It is respectfully submitted, therefore, as the certificate to Mr. Wads-worth was for $4,000 while benefits for $5,000 .had been issued to other members, there became due and payable upon the death of Mr. Wadsworth only four-fifths of the amount in the death fund at the time of his death, i. e. four-fifths of $1,798.35, viz : $1,438.68.
    
      S. F. Kneeland, attorney and of counsel, for respondent, argued :—
    One of the points of contention between the parties to this action arises out of the construction which is to be placed upon section' 3 of article 5 of the constitution, hereinbefore quoted, the defendant claiming under it that a $5,000 certificate should form the basis of computation upon which the defendant should pay the beneficiary, to wit : that the term “ pro rata of the membership and benefits,” means the ratio between the Mortuary Fund and the maximum certificate issued by the company upon the life of any one person. The plaintiff contends that section 3 does not warrant any such conclusion or authorizes the defendant to adopt any such arbitrary basis of computation. Nothing appears in the constitution, by-laws or proofs in this case making a $5,000 certificate a basis for any purpose or computation. Defendant might as well make $10,000 or any other sum a basis for computation. The burden is cast upon the defendant to show its authority- for assuming this arbitrary basis. The only purpose of that section, we assert, is to limit the amount to be paid in cases where the amount which would be received from a single assessment, would not be equal to the amount stated in the certificate, and this, like all limitations, should be construed strictly against the insurer and in favor of the insured. Conditions and provisions in policies of insurance, if of doubtful meaning, are to be construed against the insurer. Hoffman v. Acton F. Ins. Co., 32 N. Y. 405, 413, 414; Breasted v. Farm. Loan & Trust Co., 4 Seld. 305 ; 61 N. Y., Opinion, 575 ; Ripley v. Lamourk, 56 Barb. 21. All words, whether they be in deeds or statutes, or otherwise, if they be general, 'and not express and precise, shall be restrained unto the fitness of the matter and person. Bacon's Law Maxims, Reg. 10. It is a rule of law, as well as of ethics, that where the language of a promisor may be understood in more senses than one it is to be interpreted in the sense in which it was understood by the promisee. Potter v. Ontarion Ins. Co., 5 Hill, 149, and cited with approval in 32 N. Y. 413. And this rule has been uniformly applied to conditions and provisions in policies of insurance. Yeaton v. Fry, 5 Cranch, 341 ; Pity v. Royal Ins. Co., 1 Burrows, 349 ; Livingston v. Sickles, 7 Hill, 255 ; Catlin v. Springfield Ins. Co., 1 Sum. 434 ; Cropper v. Western Ins. Co., 32 Penn. St. 351. The ambiguity of the words “pro rata of the membership and benefits in force at the time of the death of such member ” is such as to render the section referred to entirely unintelligible, and furnishes no definite mode of ascertaining what sum shall be paid in case the death claim is proven while a single assessment is insufficient to pay the claim in full, while section 1 of article 5 provides that the amount of the assessment to pay death .claims, and the condition of the payment of the same shall be stated in the certificate of membership.
    The most favorable construction to the defendant that can be placed upon section 3 of article 5 would be to construe the words “pro rata ” to be equivalent to the word “ average ” and if this shall be adopted then this section, standing by itself, would be construed to mean that the sum to be paid should be the average of the benefits in force at the time of the death of the member, or, in other words, the ratio between the number of certificates in force and their aggregate amount. The defendant, however, cannot limit the amount payable under its construction, as it has riot shown the number of the membership or the amount of the aggregate benefits in this company, which it would be required to do as a part of a defence restricting our claim to less than the amount named in the policy. If, as plaintiff contends, section 3 shall be disregarded and article 5 sections 1 and 2 and 3, and the certificate of membership furnish the true guide by which the amount of the death loss to be paid, is to be determined, the constitution and certificate contemplates the payment in full of the amount specified in the certificate itself. - The court can see that the material sections, if the views are to be adopted, are sections 1 and 3 of article 5, section 1, providing that the board shall determine the amount necessary to pay the death claim, and the conditions of payment of same, which shall be stated in the certificate of membership ; section 2, providing “ that when the Mortuary Fund is insufficient to meet the death claim, the Board of Directors shall levy an assessment for such sum as the Executive Committee shall deem sufficient to pay such claim,” and further providing that the assessment shall be apportioned among the members, according to the “rates specified’in the certificate of membership, and that the net amount received from the assessment, less 20 per cent, for the Reserve Fund, shall go into the Mortuary Fund, for the payment of the death claims.” The well established rule applicable to the construction of the statutes should be applied in this case.” We must read the constitution as a whole, and if it cannot be harmonious, the inharmonious portion must be rejected, so that the constitution may exist, unless the rejection of this inharmonious portion will entirely defeat the purpose in view. We claim that the rejection of section 3, article 5 would in no manner defeat the purpose in view as expressed by the sections heretofore quoted and the certificate of membership itself. Upon the construction and rules applicable thereto we call the attention of the court to the following authorities : Where the ambiguity of the language is apparent the construction is to be that most favorable to the insured. 10 N. H. 305 ; Pelly v. The Royal Ex. Ass. Co., 1st Burr, 341-348 ; Blackett v. The Royal Ex. Ass. Co., 2 Cramp & Jar. 244 ; Yeaton v. Fry, 5 Cranch, 355 ; Palmer v. Warden, 1st Story, 360. Niblack on Mutual Benefit Societies, p. 206 ; N. W. Mutual, etc., v. Hazelett, 105 Ind. 212 ; Burkhard v. Travellers’ Ins. Co., 102 Penn. St., 262.
    This certificate itself is a contract upon its face to pay $4,000, and if the mortuary fund is insufficient to pay such sum then to add to it for such purpose, all moneys realized to the fund from the next assessment, less 20 per cent, for the reserve fund as hereinbefore set forth. From this statement of law and facts we submit (a) That the plaintiff was entitled to payment of her claim in full. That it was the duty of the defendant through its directors to assess a sum sufficient with the amount on hand in the mortuary fund to answer that purpose, and on their refusal so to do the defendant was liable in damages as for a breach of contract in the entire amount insured. Fitzgerald v. Equitable Res. Fund, etc., N. Y. Supplement of July 25th, 1889, p. 837 ; Freeman v. Society, 42 Hun, 252. (b) In case the court had decided the above theory to be incorrect then the defendant was manifestly liable to pay the amount then in the mortuary fund, which was $3,547,42. The defendant attempted to controvert this by two propositions, each of which was untenable, to wit: (1) That the assessment in this case was made before his death by requiring each member as they joined to pay a certain sum to start a mortuary fund which by the receipt given was designated a first death assessment. This being a first death (there is no proof to that effect) no further assessment could be made. We answered this as follows : The voluntary contribution, however designated, formed when made the nucleus of the “ Mortuary Fund ” in existence at the time of Wadsworth’s death. This being insufficient to pay the claim, the policy says that “ the next assessment,” after his death shall also go into that fund and be applicable to the payment of the claim. In this connection the notice of assessment on account of this death is a material factor. It is termed “ Mortuary call No. 1 ” and is issued as stated for the reason “ that proofs of death of the following named member (Wadsworth) having been this day received and found satisfactory, the Executive Committee has ordered a Mortuary call on all who were members on October 12th inst.” (2) The remaining claim by the defence was that if the new assessment applies to this claim it must be taken in full payment, leaving the previous mortuary fund intact. To this we say the policy also provides that this next assessment shall “ be made as hereinafter set forth,” then follows a provision in subdivision 1 that where ‘1 the death fund is insufficient to meet existing claims by death an assessment shall be made and the amount thereof less twenty per cent.11 shall go ”—not to the sole payment of the claim but—11 into the death fund.” It is nonsensical to claim that after it has got in there it must be •immediately separated from the rest of the fund and applied to the exclusion of the balance as the only payment upon the death claim in question. The clear intent and meaning of the constitution and policy of insurance, taken together is, that the amount stated shall be paid in full from the death fund and if that is not sufficient at the time of the death it shall be augmented for that purpose by a new assessment. The word 11 or ” as used in the policy simply refers to this contingency and cannot be construed to limit the otherwise necessary effect of the constitution and agreement of insurance.
    It is a well-settled rule of law that 11 the apparent intention, as collected from the whole instrument must always control particular expressions ” and that for this purpose the word 11 or ” may be construed as meaning “ and ” and vice versa, Roome v. Phillip, 24 N. Y. 463 ; People v. Van Rensselaer, 8 Barb. 189 ; Van Vechton v. Pearson, 5 Paige, 512 ; Miller v. Philip, 5 lb. 573 ; Jackson v. Topping, 1 Wend. 388. Under this rule the term 11 $4,000 from the death fund of the company, at the said death, or from any moneys that shall be realized to said fund from the next assessment,” may be construed to mean “and” from any moneys, etc. The promise in either event under this section, is to pay $4,000 without deduction.
   By the Court.—Sedgwick, Ch. J.

The defendant was a mutual company constituted to make insurances upon the'lives of such persons as should become members. They issued a certificate of membership to the husband of the plaintiff, which declared that within sixty days after the receipt of satisfactory evidence of the death, etc, “there shall be payable to Myra L. Wadsworth * * $4,000 from the death fund of the company at the time of said death or from any moneys that- shall be realized'to the said fund from the next assessment to be made as herein after set forth, and no claim shall be otherwise due of payable except from the Reserve Fund as hereinafter provided.

I see no reason to doubt that a claim was entitled to be satisfied out of the death fund existing at the time of death, and if that death fund did not satisfy the claim, the part not satisfied was to be paid as far as possible out of the fund to be made by the collections from assessments after the death.

The certificate provided if the death fund is insufficient to meet existing claims by death, an assessment shall then be made upon every member whose certificate is in force at the date of the death last assessed .for, and the net amount received from such assessment, (less 20 per cent to be set apart from the reserve fund) as provided in the constitution and by laws of said company, shall go into the death fund.

Section 2 of article 5 of the constitution, and which regulated assessments, was whenever the Mortuary Fund is insufficient to meet a death claim or claims, the Board of Directors shall cause to be made upon the members, etc., an assessment for such a sum as may be by the executive committee deemed sufficient to pay such claim or claims, the same to be apportioned among the members according to the age of each member and at the rate specified in the certificate of members, etc.

It seems to be plain that any valid claim was to be satisfied not from a single fund but from the death fund on hand at the time of the death, and if that were insufficient then from the amounts of collections of assessments made to increase the first fund. The result would be that there would be a single fund called the death fund. As there was no provision for the company creating a death fund except by assessments to be made to meet death claims, the consequence would be, that there would be no death fund until after the first death, and the first claim would have no death fund on hand to resort to. Evidently this would be an injustice to the first death claim which should have a right to resort to a death fund on hand as the other members would have. So, without authority from the by-laws or constitution, but by the assent of persons as they become members, the company required each person proposing to become a member to pay a certain sum under what they called a first death assessment. In this instance the member paid what is called in a receipt given to Mm “ first death assessment, $6. ” If it be considered that such an assessment was not of a kind to be made under the articles of the constitution, certificate of membership or the by-laws, and the testimony leaving to inference what was the origin and purpose 'of the so called first death assessment, it must be inferred that the assessment was made to create a fund or death fund that should be in existence at the time of the first death, and the obligation of the company would be to treat the collections so to be made as constituting the death fund at the time of the first death. It was the right of the first claimant, by the terms of the policy, to have that death fund if not sufficient to pay the claim, increased by an assessment to be made. A provision of the certificate that has already been cited, is that the collections of the assessment shall go into the death fund.

In this case, the claim was the first death claim. At the time of the death there was on hand collections from the assessments made before the death. This was the death-fund. The company made assessments afterwards to meet the claim. The assessments were specifically made, as appears by the notice, to meet the claim of the plaintiff, because it declares that proof of the death of the following-named member having been this day received and found satisfactory, a mortuary call is made, and then the name given was Elbert E. Wadsworth, who took the certificate of membership in this case. I am of opinion that the learned judge below was right in holding that the claim was not satisfied by paying the amount of the death fund on hand at the time of the death, and that the funds that came from the assessments made to meet that claim should be appropriated to the full satisfaction of the claim.

An argument was made that the plaintiff was entitled to receive, less than the plaintiff’s claim, under the provisions of section 3, article 5, of the constitution. That section was, that in case a death claim is proven while a single assessment is insufficient to pay the said claim, there shall be paid in full satisfaction of such claim, a sum pro-rata of the membership and benefits in force at the time of the death of such membership. These expressions have to my mind no meaning and are at the best vague and indefinite and not applicable to facts shown by testimony. The terms of the contract, if there be inconsistency, should control.

The judgment is affirmed with costs.

Freedman and O’Gorman, JJ., concurred.  