Farmers' Mutual Insurance v. Wenger

The by-laws of a mutual insurance company provided that the liability of a member should continue, until the cancellation of -his policy and the erasure of his name from the books of the company. Held, that the company was relieved from liability for a loss by fire after a voluntary surrender of liis policy by a holder, without a formal cancellation of the same and the erasure of his name from the books of the company.

Error to the Court of Common Pleas, of Lancaster county: Of May Term 1879, No. 30: Covenant by John Wenger against the Farmers’ Mutual Insurance Company, on a policy of fire insurance. Defendant pleaded non est factum, covenants performed, absque hoc. It appeared that in 1870, the company issued a policy to Wenger on certain premises in Lancaster county; All the assessments of Wenger were paid up to May 1876. A short time previous, the company becoming impressed with the fact that it had taken risks upon too high a valuation of properties, a committee was appointed to ascertain, value and adjust the risks. One of these properties was Wenger’s, whereon the risk was reduced from $525 to $300. On the 26th of May 1876, when informed of the action of the company by its secretary, Mr. Strohm, Wenger expressed his dissatisfaction, and declared he would leave the company. Strohm replied, “he could do so at any time, by paying up the arrears of his assessment and surrendering his policy.” Wenger asked Strohm “whether he should bring the policy and money to his place,” to which Strohm replied, “I can save you that trip; I have some business with Jacob Hoffman, and if you will leave the policy and money with Hoffman I will get it there,” the understanding being, at that time, said Strohm, “ that I should consider the surrender of the policy to Hoffman the same as if it had been surrendered to me.” In pursuance of this conversation and the understanding of the parties, “the latter end of May or the beginning of June,” Wenger delivered to Hoffman the policy of insurance and the arrearages of his assessment between $2.50 and $3, and requested him to give the same to Strohm, who was to call for them. Hoffman said, “ he put the money and policy away, intending to give it to Strohm when he called 'for it. Wenger told me to do so with the policy and money.” The policy still remained with Hoffman on July 4th 1876, when, the property was destroyed by fire. It appeared that at this time the name of Wenger still remained upon the books of the company. Among the by-laws of the company were the following: Sect. 1. * * * The insurance shall be considered perpetual, unless a limited time is specified in the policy, subject to adjustment when either the managers or the owner shall desire it; any one may withdraw from the company at the end of the year, not being in arrears. Sect. 5. The directors shall provide suitable books, wherein the secretary shall write the names of the members, with a specification of their property, designating each building, also its contents (if insured), with the distance from each other, and the respective valuation at which they are insured; when subject to extra taxation, the rate thereof shall be entered and the equivalent taxable carried out. An entry of the withdrawal or expulsion of a member shall also be made on the books. The secretary shall furnish each member with a transcript of his entry, if demanded! Sect. 6. The liabilities of members shall commence and terminate at 12 o’clock on the day on which their names are entered, withdrawn or erased. The plaintiff submitted the following point, to which is appended the answer of the court: If the jury believe that the plaintiff’s policy had not- been can-celled and his name erased from the books of the company before his property was destroyed by fire, the company was liable at the time of the destruction of the property, and their verdict must be for the plaintiff. Ans. “ If you believe that the plaintiff’s policy had not been cancelled and his name erased from the books of the company before his property was destroyed by fire, and believe also that it was the understanding between Mr. Strohm and the plaintiff that if he left the policy and assessment money with Mr. Hoffman, and he, Mr. Strohm, getting the same from Hoffman, would then result in the surrender or cancellation of the policy, then your verdict must be for the plaintiff.” In the general charge, the court, Patterson, J., inter alia, said: “ Those sections, of course, are part of the law of this company, and very properly designate the distinct time at which a party insured or his policy would terminate, and the exact moment of time of day at which the company itself would incur or be relieved from any liability, and when the liability of the insured shall terminate by their names being withdrawn or erased. “ Those sections show that there is a very considerable significance to be put upon the condition of the books of the company, the names of the persons entered there, and also whether those names are erased or withdrawn, and when. “ * * * eyidengg js indisputable that the plaintiff’s name was on the books when this fire occurred, and that it is on the books yet, and that being so, according to terms of their charter and the by-láws, he was liable to any assessment, so long as his name remained there. * * * “ Therefore, the surrender should be enforced against the insured when seeking to recover the amount insured and contained in the policy, only when there is the clearest evidence that the policy was actually surrendered according to the understanding or stipulations of both parties.” Verdict for plaintiff for $586.31. After judgment thereon, the defendant took this writ, and, inter alia, assigned for error the answer to the above point and the portions of the charge noted.