
    William B. Crosby, Plaintiff, v. The Mutual Reserve Fund Life Association, Defendant.
    (Supreme Court, New York Trial Term,
    October, 1902.)
    Insurance by assessment — Bight to increase the rate of a death beneft fit from that of the age of entry to that of the age attained.
    A certificate of membership in an assessment insurance association, which made the constitution and by-laws a part of the contract, provided that a death benefit assessment should be made at such rates “ according to the age of each member ”, as the directors might establish. The constitution provided that such an assessment should be apportioned among the members “ as per the rates named in the certificate of membership ”, referring to a table of rates annexed thereto. A member, whose age at entry was forty-three years, was assessed for a death benefit at the rate of his attained age, fifty-five years, and, refusing to pay, his policy was canceled.
    Held, that the action of the association was justifiable and that it had a right to increase the rate of the age of entry to that of the age attained.
    Action brought by the plaintiff against the defendant, a mutual life insurance association conducting business upon the co-operative or assessment plan, to recover $2,500 damages which it is alleged have been sustained by the plaintiff as the result of the defendant’s cancellation of the certificate of membership, upon his refusal to pay the bi-monthly assessment, known as mortuary call, Eo. 96, dated February 1, 1898. The plaintiff "became a member of the defendant association in 1885 when he was forty-three years of age. In 1898 when this action was commenced he was fifty-five years of age. The question is raised as to the right of the defendant to increase the rate of assessment upon the plaintiff from that of age of entry to that of attained age. The facts sufficiently appear in the opinion.
    Black & Une eland (Thomas Allison, of counsel), for plaintiff.
    George Burnham, Jr. (William D. Guthrie, of counsel), for defendant.
   Truax, J.

The policy issued, by the defendant to the plaintiff provides that if at 'such date as the board of directors of the association may from time to time fix or determine for making an assessment, 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 last death assessed for, and said assessment shall be made at such rates, according to the age of each member, as may be established by the said board of directors. Said policy also provides that the constitution and by-laws of the defendant shall form part of the contract between the plaintiff and the defendant. Section 5 of article 11, of the constitution, provides that on the 1st days of February, May, August, and ETovember, or at such other period as the board of directors may determine, an assessment shall be made upon the entire membership in force at the date of the last audited death claim prior thereto, for such a sum as the executive committee may deem sufficient to meet the existing claims by death, the same to be apportioned among the members according to the age of each member as per the rates named in the certificate of membership. Attached to the policy is a table of rates. The plaintiff was forty-three years of age at the time the policy was issued to him. In 1898 when he was fifty-five years of age, an assessment was made upon him. This assessment was levied upon the plaintiff under the table of rates adopted by the board of directors of the defendant in 1899, but according to the rate for the age of fifty-five years, the plaintiff’s then attained age, instead of at the rate for his age when the policy was issued to him. The plaintiff refused to pay this assessment and thereupon the defendant cancelled the aforesaid policy and refused to recognize the plaintiff as one of its members. The plaintiff claims that the words “according to the age of each member ” mean the age of each member at the time he joined the association, while the defendant claims that such words mean the age of each member when the assessment is made.

My attention has not been called to any decision of any court in this State upon the question in controversy. This question,. however, has been before the courts of other States. In Haydel v. Mutual Reserve Fund Life Assn., 104 Fed. Repr. 718, the Circuit Court of Appeals of the Eighth Circuit held that the right to increase the assessment was conferred upon the directors of the defendant hy the constitution which was a part of the «contract and that it was a power essential to the continued vitality «of the association as an assurance company. The court said: ■“ On this state of facts the question to be determined is whether the endorsement on the back of the policies should be regarded as an agreement between the insured and the insurer, binding the latter not to make assessments in a sum greater than $3.50 per thousand bi-monthly, or whether it should be regarded merely as a memorandum showing how assessments would be apportioned as between persons of different ages, and the probable amount of the bi-monthly assessments as then foreseen and estimated. For several reasons we incline to the opinion that the latter is the correct view. In the first place, the defendant was a mutual company operating on the assessment plan. It had no means wherewith to pay expenses and death losses other than such as it derived from assessments on its members. It is by no means probable, therefore, that by the endorsement in question it intended to divest itself of the authority plainly conferred by its constitution upon the board of directors to make such assessments as might at any time be found necessary to meet its liabilities, or to tie its hands so that it could not exercise this necessary power. In the second place, the cost per year to a person aged fifty-six of a policy for $10,000, at the rate indicated by the indorsement, would only be $210, which is a sum so far helow the usual cost of that amount of insurance to a person of that age, as constrains us to believe that the deceased did not himself regard the endorsement as a contract binding the defendant to furnish insurance at that rate, without reference to what might ibe its actual experience. It is most probable, we think, that he understood it to be an estimate of the probable cost of insurance, the accuracy of which would be determined by the class of risks which it succeeded in obtaining.”

In Barbot v. Mutual Reserve Fund Life Assn., 100 Ga. 681, the right to increase the rate of assessment was sustained. It was claimed in that case that the same table of rates that wks printed upon the plaintiff’s certificate of membership limited the Tight of the association to increase the amount of the assessment. But the Supreme Court of Georgia after reviewing the entire question upon practically the same facts as those here involved, held that “ It was not the purpose of this assessment rate table -to fix a limitation upon the amount of the gross assessment, but only to afford a guide after stich gross amount has been ascertained, for its equitable and fair apportionment among the members, graduated according to their relative ages.”

In Mutual Reserve Fund Life Association v. Taylor, 99 Va. 208, the legality of the assessment of 1898 (to which the plaintiff in this case objects) was sustained by the Supreme Court of Virginia.

I am of the opinion that the assessment made in 1898 was authorized by the contract between the plaintiff and the defendant, 'and that the refusal of the plaintiff to pay said assessment authorized the defendant to cancel the plaintiff’s policy and to declare the same forfeited.

Judgment is ordered for the defendant dismissing the complaint with costs.

Complaint dismissed, with costs.  