
    Roland R. Dennis, Resp’t, v. The Massachusetts Benefit Association, App’lt.
    
    
      (Court of Appeals, Second Division,
    
    
      Filed June 3, 1890.)
    
    1. Benefit societies—Failure to pat assessment.
    J. Fred. Dennis was a member of the defendant association. By the rules of the latter it was provided that “ a failure to comply with the rules of-the association or to payment of assessments * * * shall also render the certificate void.” But- by another rule it was provided that “ for valid reasons to the officers of the association (such as a failure to receive notice of an assessment) he may be reinstated by paying assessment arrearages.” February 13, lt86, defendant mailed Dennis a notice requiring him to pay on or before March 15th. O.n March 8th he was stricken with apoplexy and died on the 19th. On March 30th a second notice was received from defendant stamped "certificate forfeited for non-payment. May be renewed by immediate payment if in good health. ” The reason for non-payment was stated to defendant and the assessment offered and refused. Held, that by the latter notice the company had agreed to accept a valid excuse for non-payment of an assessment within the thirty days, and continue the policy in force, and that his being so stricken was a legal excuse, and that the defendant could not arbitrarily refuse to accept any excuse whatever.
    3. Same—What is a “valid excuse.”
    That the word “valid,” as here used, is equivalent to good, sufficient or satisfactory.
    3. Same.
    The death of Dennis did not alter the contract obligations of the defendant, and his legal right to reinstatement or to have the certificate declared to be in full force did not die with him, but passed to the beneficiary under the policy.
    Appeal from an order of the general term of the supreme court, second department, reversing a judgment in favor of the defendant, entered on a verdict directed by the court
    On the 3d day of August, 1883, the defendant, a mutual bene-. fit association, issued a certificate of membership to one J. Fred. Dennis, conditioned that if Dennis should comply with the rules and regulations of the defendant, and forming a part of the contract, the defendant would pay to Anne C. Dennis within sixty days after due proof of his death a sum equal to the amount received from a death assessment, but not to exceed $5,000.
    The seventh condition of the contract is as follows: “A failure to comply with the rules of said association, or to payment of assessments, or falling into gross and confirmed habits of intoxication, shall also render this certificate void.”
    The rules in so far as they relate to the payment of assessments are: “ Second. Upon the death of any member, the said party to whom this certificate is issued shall at once pay, if required, to its treasurer, an additional assessment of $6.75. Third. The form of notice to and process of collection from each of the members of the associaton above named shall be as follows: A notice shall be sent announcing such assessment, and the number thereof, to the last post-office address given to the association by each member, and if the assessment is not received within thirty days from the mailing of said notice, it shall be accepted and taken as sufficient evidence that the party has decided to terminate his connection with the association, which connection shall thereupon terminate, and the party’s contract with the association shall lapse and be void; but said party may again renew his connection with the association by a new contract made in the same manner as at first; or for valid reasons to the officers of the association (such as a failure to receive notice of an assessment), he may be reinstated by paying assessment arrearages.”
    February 13, 1886, the defendant mailed to Dennis a notice of assessment by the terms of which he was required to make payment on or before March 15th.
    Seven days before the expiration of the time of payment and on March 8th, Dennis, while walking in the streets of the city of New York, and apparently in good health, was suddenly stricken with apoplexy rendering him immediately speechless and insensible. He never regained consciousness, and died on March 19th, four days after the expiration of the time limited in the notice for the payment of the assessment
    The next day, March 20th, a second notice was received from the defendant, in all respects like the first, with the exception that it had stamped upon the face in red ink “ certificate forfeited for non-payment. May be renewed by immediate payment if in good health.”
    The trial court refused plaintiff’s request to submit certain specified questions to the jury and directed a verdict in favor of the defendant.
    
      John A. Ilapes, for app’lt; Treadwell Cleveland, for resp’t.
    
      
       Affirming 14 N. Y. State Rep., 605.
    
   Parker, J.

If the certificate in question had provided without qualification that, for a failure to pay an assessment within thirty days after the mailing of a notice thereof by the defendant, it should “ lapse and be void,” its invalidity would be established beyond dispute. Roehner v. Knickerbocker Life Ins. Co., 63 N. Y., 160 ; Evans v. U. S. L. I. Co., 64 id., 304.

And the fact that Dennis was prevented from making payment by an act of God which deprived him. of consciousness would not relieve him from a forfeiture thus provided for. Wheeler v. Conn. Mut. Life Ins. Co., 82 N. Y., 543.

But the question here presented is whether the contract does not fairly admit of a construction which gives to it, after the expiration of thirty days, where a member intends and desires to pay, conditional life, which continues until it shall be determined whether he had sufficient excuse for the omission ? And if such a construction be permissible, whether Dennis’ severe visitation and subsequent unconscious condition constitutes such an excuse as, coupled with an intention to pay and subsequent payment, would continue the policy in force?

Judge Peckham, in Holly v. Metropolitan Life Ins. Co., 105 N. Y., 437; 7 N. Y. State Rep., 204, stated the rule which should govemcourts in construing contracts involving a forfeiture as follows : “A strict construction, it is said, must be insisted upon, and the contract resulting in a forfeiture cannot be extended beyond the strict and literal meaning of the words used. This is undoubtedly true. In cases where the meaning is not entirely plain, and where it is capable of two constructions, one involving .a forfeiture and the other being fair and reasonable and supporting the obligation of the policy against the insurer, that construction is preferred by the courts which does not involve the forfeiture, not only because it is not so harsh, but also because if the language is doubtful it is that employed by the insurer and should be taken most strongly against him.”

By the seventh condition of the certificate, forfeiture is made to depend upon “ a failure to comply with the rules of said association as to payment of assessments.” The second and third rules Dave reference to assessments and their payment.

Buie second provides that “upon the death of any member the said party to whom this certificate is issued "shall at once pay, if required, to its treasurer an additional assessment of $6.75.

This rule need not be considered because the defendant did not require Dennis to pay at once. By the terms of the notice he was expressly given until March 15th, following, within which to make payment. And the notice was in accordance with the provisions of rule third, which provided, among other things, that “ if the assessment is not received within thirty days from the mailing of said notice, it shall be accepted and taken as sufficient evidence that the party has decided to terminate his connection with the association, which connection shall thereupon terminate, and the party’s contract with the association shall lapse and be void ; " * * or for valid reasons to the officers of the association (such as a failure to receive notice of an assessment) he may be reinstated by paying assessment arrearages*”

The right of the defendant to insist upon a forfeiture could not be doubted were it not for the last clause of the sentence quoted. By it is suggested the inquiry, what was the intent of the defendant in adding this apparently qualifying clause ? How did it ■suppose the persons solicited to become members would interpret it? Certainly it did not expect them to understand it as giving added strength to the provision declaring a forfeiture. It is equally clear that it was intended to "be understood as softening somewhat the extreme rigor of the forfeiture clause, which, standing alone and unqualified, would deprive a member of the insurance for which he has contracted and paid, even when by an accident of mail carriage the notice of assessment has failed to reach him, or because of the act of God he has been prevented from making payment within the time prescribed.

It cannot be doubted that it suggests, at least to the average reader, that the company has agreed to accept a valid excuse for non-payment of an assessment within the thirty days, and thereafter continue the policy in force. It is wholly meaningless and a snare if that be not the intent. That it was intended to have that effect has support in the provision that failure to pay within thirty days “ shall be accepted and taken as sufficient evidence that the party has decided to terminate . his connection with the association.” It will be observed that the contract does not provide in terms that failure to pay within thirty days shall work a forfeiture, but that failure to pay shall be taken as sufficient evidence of an intention to terminate his connection with the association, which connection shall thereupon terminate. Thus it is suggested that it is the intention, coupled with the failure to pay, which works the forfeiture. This language, therefore, seems to be in harmony with the last clause of the sentence. For as intention constitutes one of the essential elements of a forfeiture, so if a party intends to pay, but fails, for a valid reason, “ such as a failure to receive notice of an assessment,” he may be reinstated. No new contract is required. Nothing in fact need be done but pay the assessment if the excuse be accepted. Giving to all the words of the contract their full and proper meaning, as the defendant must have supposed they "were understood by the promisee, they cannot, as we think, be construed otherwise than as limiting and making conditional the forfeiture which would otherwise result from a failure to pay the assessment within the time prescribed. “It is a rule of law as well as ethics,” says the court in Hoffman v. Etna Ins. Co., 32 N. Y., 413, “ 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 he has reason to suppose it was understood by the promisee.”

The defendant not'only had reason to expect that its members would interpret the contract as we have suggested, but it has also by subsequent transactions given to the contract a practical construction to the same effect.

Although the greater' number of assessments were paid by Dennis promptly, still three assessments were not paid until after the due date. No other act was required or thing done to continue the policy in force except to pay the overdue assessments. And after he was in default on account of the assessment in question, and on March 19th, the defendant mailed to him a notice that he could be reinstated “ if in good health.”

By this act the defendant indicated that it understood the policy to have conditional life remaining, because no new contract was required or suggested; the mere payment of the over-due assessment, said the defendant, in effect, will support its vitality until another assessment is due and payable.

Such notice cannot be treatéd as a waiver, because it must be considered in its entirety, and thus regarded, waiver was conditioned on the good health of Dennis, a condition that the defendant could not impose if reinstatement under the circumstances was a matter of right, because it was not so written in the contract.

Was it a matter of right? Had Dennis instead of dying regained consciousness on the 19th day of March could he have compelled the defendant to accept the excuse he had to offer, and continue his policy in force on payment of the back assessment?

We have said that the contract must be construed as an agreement that a member may be relieved from the effect of forfeiture for valid reasons to the officers. Had he then established by evidence, first, that he had fully intended to pay; second, that he was prevented by sudden illness depriving him of consciousness; third, that he had tendered payment; what valid objection could Rave been interposed to the granting of a decree declaring the policy in full force and virtue ?

It could not be urged that an act of God which instantly prostrates a man both physically and mentally does not constitute a legal excuse for the omission to do an act when the making and acceptance of a valid excuse therefor is distinctly contracted for.

This assertion finds support in Howell v. Knickerbocker Life Ins. Co., 44 N. Y., 27_ .

_ But it is said that the agreement vests the right to determine whether the excuse be valid in the officers of the defendant; that the manner in which they exercise their power is not open to review in the courts. In other words, that the officers may arbitrarily refuse tp accept any excuse whatever. If that were true, then failure to receive a notice of assessment, notwithstanding the fact that it is specifically referred to, might be arbitrarily held to be insufficient as an excuse and the party left without redress. But such is not the law. The word “ valid,” as here used, is •equivalent to good, sufficient or satisfactory, and is not without judicial construction. In Duplex Safety Boiler Co. v. Garden, 101 N. Y., 387 ; 1 N. Y. State Rep., 51, the defendants agreed to pay as soon as they “ were satisfied that the boilers as changed were a success,” and in an action to recover the contract price the defendants contended that by the stipulation it was for them alone to determine whether the boilers were a success. This position was held to be untenable because “ a simple allegation of dissatisfaction without some good reason assigned for it might be a mere pretext and cannot be regarded.” Judge Folger, in Miesell v. Globe Mutual Life Ins. Co., 76 N. Y., 115, states the rule as follows: That which the law will say a contracting party ought to be satisfied with, that the law will say he is satisfied with.” This principle is further illustrated and applied in Folliard v. Wallace, 2 Johns., 395; City of Brooklyn v. Brooklyn City Railroad Co., 47 N. Y., 475 ; Braunstein v. Accidental Death Ins. Co., 1 B. & S., 782, and Moore v. Woolsey, 4 Ellis & Blackburn, 243.

We are of the opinion, therefore, that had Dennis established "the three propositions which we have stated, he would have been ■entitled to a judgment declaring the certificate in full force.

The death of the assured did not alter the contract obligations ef the'defendant. Dennis’ legal right to reinstatement or to have the certificate declared to be in full force did not die with him, but passed to the beneficiary under the policy. In Wheeler v. Conn. Mut. Life Ins. Co., 82 N. Y., 543, 554, this court held that ■“ although the insured was dead, the right to a paid up policy or its value remained to his assignees. If the insured had lived, he was entitled to it, and his assignees succeeded to his right.”.

The complaint in this action is appropriate to the relief sought to be obtained.

From the evidence it appears that the reason for non-payment was properly presented to the defendant, the amount of the assessment tendered and the validity of the policy insisted upon, But the defendant refused to accept the reason given as valid or •sufficient, and insisted that the certificate had been forfeited.

We think the evidence as to the intention of Dennis to pay the assessment properly presented a question for- the jury. But it ■cannot avail the defendant, as it waived its right in that regard by requesting the trial court to direct a verdict in its favor.

The order appealed from should be affirmed and judgment absolute on defendant’s stipulation ordered, with costs.

All concur, except Brown, J., not sitting.  