
    Frank L. Clifford, Respondent, v. The Protective Life Association, Appellant.
    (Supreme Court, Erie Special Term,
    November, 1901.)
    Accident insurance — Measure of damages upon an illegal cancellation..
    Where an accident policy reserves to the insurer the right to cancel' it at any time by a written notice and the return of the membership fee, the proper measure of damages upon an illegal cancellation for an unsubstantiated failure to pay an assessment levied is only the' membership fee, as the member cannot recover the premiums paid.
    Appeal from a judgment of the Municipal Court of the city of Buffalo.
    H. W. Hill, for appellant.
    John W. Wartman, for respondent.
   Kenefick, J.

The insurer cancelled this policy of accident insurance upon the ground that the insured had failed to pay an. assessment levied January 2, 1901, and payable on or before February 1, 1901. Hpon the trial plaintiff claimed that said assessment had been promptly paid. Upon the whole evidence a question of fact upon this issue was fairly presented for the determination of the trial court, and with its decision upon that question we-will not interfere.

The recovery permitted in the court below was the membership-fee and premiums paid by the insured. There is authority in other jurisdictions for sustaining such a measure of damage in similar actions on life insurance policies. Braswell v. American Life Insurance Co., 75 N. C. 8; Lovick v. Life Association, 110 id. 93; Burrus v. Life Ins. Co., 32 S. E. Rep. (N. C.) 323; Union Central L. Ins. Co. v. Pottker, 33 Ohio St. 459; Ins. Co. v. Tullidge, 39 id. 240; American Life Ins. Co. v. McAden, 109 Penn. St. 399; Suess v. Imperial Life Ins. Co., 64 Mo. App. 1; Slater v. Supreme Lodge, 76 id. 387; Van Werden v. Equitable Life Assur. Soc., 99 Iowa, 621. Indeed there is a Special Term decision in this State up holding this rule. Meade v. St. Louis Mut. Life Ins. Co., 51 How. Pr. 1. The later decisions in this State uniformly reject this measure of damage.

In Speer v. Phoenix Mutual Life Ins.. Co., 36 Hun, 322, the rule adopted is as follows: First. If the life is still insurable, any increase in cost in replacing the broken contract with another of equal value to him in some responsible company. Second. If the life has ceased to be insurable the actual value of the policy at the time of the breach" as a valid policy against an entirely responsible company. This rule was cited with approval' in Farley v. Union Mutual Life Ins. Co., 41 Hun, 303.

In Skudera v. Metropolitan Life Assn., 17 Misc. Rep. 367, it was held that an action could not be maintained, upon an alleged wrongful forfeiture of a life insurance policy, to recover back the premium paid as for money had and received.

The rule enunciated in the Speer case, supra, was followed by the Court of Appeals in Toplitz v. Bauer, 161 N. Y. 325, and is laid down in other recent cases. Langan v. American Legion of Honor, 34 Misc. Rep. 629; Keyser v. Mutual Reserve Fund L. Assn., 60 App. Div. 297. Here, however, we have simply an accident policy. The age and health of' an applicant for such insurance are not of such vital importance as is his business and occupation, and the insurance is temporary in character. Were the policy to continue indefinitely upon the prompt payment of periodical premiums, it would seem that the fair measure of damages would be the cost of replacing the contract upon the same terms in some responsible company. In the policy under consideration we find a clause reserving to the insurer the right to terminate the policy at any time at its option by written notice to the member and return of the original membership fee. While it is true that the cancellation of this policy is placed on another ground, viz., the failure to pay the assessment, I am inclined to the opinion that in view of the above provision in the contract the proper measure of damage in this action is the amount of the membership fee, to-wit, three dollars.

The judgment is, therefore, reversed, with costs, and a new trial ordered in the Municipal Court of Buffalo (Buffalo City Charter, § 457), unless the plaintiff shall elect to reduce the recovery to $3 damages and $2.20 disbursements, and shall file written notice of such election with the clerk of this court within ten days from the date hereof, in which event judgment as so modified is affirmed, without costs. La Motte v. Archer, 4 E. D. Smith, 46; Decker v. Hassel, 26 How. Pr. 528; Powers v. Hanford, 1 App. Div. 343.

Judgment reversed, with costs, and new trial ordered in Municipal Court, unless plaintiff elect to reduce recovery to $3 damages and $2.20 disbursements, and shall filé written notice of such election with the clerk of this court within ten days from date, in which event judgment as modified affirmed, without costs.  