no. 383.
Opinion,
Me. Justice Clank :
These two cases, brought by the Susquehanna Mutual Fire Insurance Company against James L. Leavy, were tried together, in the- court below, and, although separate appeals were taken, they were argued together here. The first action was brought to recover assessment No. 4, and the second to recover assessments Nos. 7, 8, 9, 10, 11, 12, and 14 upon the defend-' ant’s premium note or policy No. 1006. The policy issued September 21,1876, and provided for insurance to the amount of $2,500 on the defendant’s hotel in Curwensville, for loss from fire, for three years; it was what was known as an “ annual interest policy,” the premium note accompanying the application being subject to the payment of 6 per cent interest annually.
The plaintiff exhibited the note in evidence, and proved the assessments; the method or manner in which they were made; and that, although due and proper notice had been given, they had not been paid. At the close of the' plaintiff’s case, the court entered a compulsory nonsuit, and the refusal of the court to take the nonsuit off is the error assigned.
The reasons assigned in the opinion filed, are, first that as a consequence of the non-payment of the interest on the premium note, and of the assessments thereon, the policy became forfeited and void, and, although the note might under the twenty-fifth section of the by-laws, be retained for the collection of the [514]*514interest, the assessments upon it could neither be legally made nor collected after the policy became void; and, second, that the method of the assessment does not appear to have been authorized by the by-laws of the company in force when the policy issued.
The policy, by its express terms, was made and accepted with reference to the application, the by-laws of the company, and the conditions annexed thereto, which were declared to be a part of the policy. The fifth condition is as follows :
“No insurance shall be considered as binding until the actual cash payment of the premiums;. and should the annual interest, or any assessment that may be levied on the premium note given for this insurance, be in arrears and unpaid, for the space of thirty days after notice and demand, then, and in every such case, this policy shall cease.”
It is conceded that, although due and proper notice was given, neither the annual interest nor any assessments were paid, as provided by the policy, and it is contended that the policy and the premium note are ipso facto void. But, as this provision was clearly for the especial benefit of the company, it was competent for the company to waive the protection which was intended : State Ins. Co. v. Todd, 83 Pa. 279; Columbia Ins. Co. v. Buckley, 83 Pa. 293 ; Susquehanna Ins. Co.’s App., 105 Pa. 615; Lebanon Ins. Co. v. Erb, 112 Pa. 149. The defendant cannot take advantage of his own wrong, or set up his own default, alone, to work a forfeiture of his contract, unless its terms are clearly to this effect. The right of the company was optional,- they might either forfeit the contract or affirm its continuance, and there is evidence of the strongest character to show that the company chose to do the latter: Galey v. Kellerman, 123 Pa. 491; Wills v. Manufacturers’ N. Gas Co., 130 Pa. 222. Moreover, the express provision of the twenty-fifth by-law of the company is that, notwithstanding the failure of the insured to pay the interest and assessments, “ the directors shall retain such premium note or notes and collect thereon all such sums as may be due or become due thereon, during the term for which it has originally been given.” It is of no consequence that this by-law of the company was not indorsed upon the policy. The policy was made .and accepted, “ with reference to the by-laws of this company; and also the appli[515]*515cation and conditions annexed, which are made part of the policy;” and these are “to be used and resorted to, in order to explain the rights and obligations of the parties.” The company was a mutual company, and the defendant was a member of it. He is therefore presumed to have known of the existence of this by-law from the date of his membership: Susquehanna Ins. Co.’s App., 105 Pa. 615; Susquehanna Ins. Co. v. Toy Co., 97 Pa. 431. The company had a right, therefore, to retain this note, and “ to collect thereon all such sum or sums as may be due or become due thereon, during the time for which it had originally been given;” and this clearly includes the annual interest which might accrue and the assessments made upon it. We are of opinion, therefore, in view of the evidence, that the court was wrong in declaring the policy to be void fo; non-payment of interests and assessments.
But it is contended that even if the policy and note were not void from forfeiture, the mode of assessment adopted by the company was not in conformity with the contract. The bylaws of June 6, 1876, in the first and second clauses of § 30, provide:
“ Sec. 30. If at any time hereafter an assessment shall be made, the amount to be levied on premium notes shall be rated according to the following classification, to wit:
“ First. All premium notes in force at the time the assessment may be declared, shall be liable to assessment for all losses unadjusted and unpaid at that time, subject to abatement as hereinafter specified.
“ Second. All premium notes which have expired and are not in force at the time such assessment is declared, shall, nevertheless, be liable to assessment for all unpaid losses which existed at the time of the expiration of such premium note or notes, pro rata with all other premium notes then in force, and the amount thus ascertained and levied upon such expired premium notes to be deducted from the gross amount of the liabilities of the company, for which such assessment is to be made, and balance of the liabilities then remaining to be assessed upon the premium notes then in force.”
These sections were subsequently revised by the company, and on January 21,1879, were adopted in a somewhat different form; the meaning, however, so far as they affect the questions [516]*516involved in this case, was not greatly, if any, changed. The same method of assessment, with but little modification, is provided for; both series of by-laws are susceptible of tbe same general construction in this respect. These by-laws of 1379 came before this court for construction in Susquehanna Ins. Co. v. Gackenbach, 115 Pa. 492; but in that case the record was inaccurate, some words of the by-lawhavingbeen omitted, and other words inserted, which wholly changed its meaning. Whilst the decision in that case was right, according to the record, it has no application here, for the by-law, as it appears in this record, is different, and calls for an entirely different construction. The proper construction was afterwards given in Susquehanna Ins. Co. v. Stauffer, 125 Pa. 416. “ The wording of this bylaw,” said Mr. Justice Mitchell, who delivered the opinion of the court, “is confused and obscure, but the general scheme intended is reasonably clear.
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no. 383.
Opinion,
Me. Justice Clank :
These two cases, brought by the Susquehanna Mutual Fire Insurance Company against James L. Leavy, were tried together, in the- court below, and, although separate appeals were taken, they were argued together here. The first action was brought to recover assessment No. 4, and the second to recover assessments Nos. 7, 8, 9, 10, 11, 12, and 14 upon the defend-' ant’s premium note or policy No. 1006. The policy issued September 21,1876, and provided for insurance to the amount of $2,500 on the defendant’s hotel in Curwensville, for loss from fire, for three years; it was what was known as an “ annual interest policy,” the premium note accompanying the application being subject to the payment of 6 per cent interest annually.
The plaintiff exhibited the note in evidence, and proved the assessments; the method or manner in which they were made; and that, although due and proper notice had been given, they had not been paid. At the close of the' plaintiff’s case, the court entered a compulsory nonsuit, and the refusal of the court to take the nonsuit off is the error assigned.
The reasons assigned in the opinion filed, are, first that as a consequence of the non-payment of the interest on the premium note, and of the assessments thereon, the policy became forfeited and void, and, although the note might under the twenty-fifth section of the by-laws, be retained for the collection of the [514]*514interest, the assessments upon it could neither be legally made nor collected after the policy became void; and, second, that the method of the assessment does not appear to have been authorized by the by-laws of the company in force when the policy issued.
The policy, by its express terms, was made and accepted with reference to the application, the by-laws of the company, and the conditions annexed thereto, which were declared to be a part of the policy. The fifth condition is as follows :
“No insurance shall be considered as binding until the actual cash payment of the premiums;. and should the annual interest, or any assessment that may be levied on the premium note given for this insurance, be in arrears and unpaid, for the space of thirty days after notice and demand, then, and in every such case, this policy shall cease.”
It is conceded that, although due and proper notice was given, neither the annual interest nor any assessments were paid, as provided by the policy, and it is contended that the policy and the premium note are ipso facto void. But, as this provision was clearly for the especial benefit of the company, it was competent for the company to waive the protection which was intended : State Ins. Co. v. Todd, 83 Pa. 279; Columbia Ins. Co. v. Buckley, 83 Pa. 293 ; Susquehanna Ins. Co.’s App., 105 Pa. 615; Lebanon Ins. Co. v. Erb, 112 Pa. 149. The defendant cannot take advantage of his own wrong, or set up his own default, alone, to work a forfeiture of his contract, unless its terms are clearly to this effect. The right of the company was optional,- they might either forfeit the contract or affirm its continuance, and there is evidence of the strongest character to show that the company chose to do the latter: Galey v. Kellerman, 123 Pa. 491; Wills v. Manufacturers’ N. Gas Co., 130 Pa. 222. Moreover, the express provision of the twenty-fifth by-law of the company is that, notwithstanding the failure of the insured to pay the interest and assessments, “ the directors shall retain such premium note or notes and collect thereon all such sums as may be due or become due thereon, during the term for which it has originally been given.” It is of no consequence that this by-law of the company was not indorsed upon the policy. The policy was made .and accepted, “ with reference to the by-laws of this company; and also the appli[515]*515cation and conditions annexed, which are made part of the policy;” and these are “to be used and resorted to, in order to explain the rights and obligations of the parties.” The company was a mutual company, and the defendant was a member of it. He is therefore presumed to have known of the existence of this by-law from the date of his membership: Susquehanna Ins. Co.’s App., 105 Pa. 615; Susquehanna Ins. Co. v. Toy Co., 97 Pa. 431. The company had a right, therefore, to retain this note, and “ to collect thereon all such sum or sums as may be due or become due thereon, during the time for which it had originally been given;” and this clearly includes the annual interest which might accrue and the assessments made upon it. We are of opinion, therefore, in view of the evidence, that the court was wrong in declaring the policy to be void fo; non-payment of interests and assessments.
But it is contended that even if the policy and note were not void from forfeiture, the mode of assessment adopted by the company was not in conformity with the contract. The bylaws of June 6, 1876, in the first and second clauses of § 30, provide:
“ Sec. 30. If at any time hereafter an assessment shall be made, the amount to be levied on premium notes shall be rated according to the following classification, to wit:
“ First. All premium notes in force at the time the assessment may be declared, shall be liable to assessment for all losses unadjusted and unpaid at that time, subject to abatement as hereinafter specified.
“ Second. All premium notes which have expired and are not in force at the time such assessment is declared, shall, nevertheless, be liable to assessment for all unpaid losses which existed at the time of the expiration of such premium note or notes, pro rata with all other premium notes then in force, and the amount thus ascertained and levied upon such expired premium notes to be deducted from the gross amount of the liabilities of the company, for which such assessment is to be made, and balance of the liabilities then remaining to be assessed upon the premium notes then in force.”
These sections were subsequently revised by the company, and on January 21,1879, were adopted in a somewhat different form; the meaning, however, so far as they affect the questions [516]*516involved in this case, was not greatly, if any, changed. The same method of assessment, with but little modification, is provided for; both series of by-laws are susceptible of tbe same general construction in this respect. These by-laws of 1379 came before this court for construction in Susquehanna Ins. Co. v. Gackenbach, 115 Pa. 492; but in that case the record was inaccurate, some words of the by-lawhavingbeen omitted, and other words inserted, which wholly changed its meaning. Whilst the decision in that case was right, according to the record, it has no application here, for the by-law, as it appears in this record, is different, and calls for an entirely different construction. The proper construction was afterwards given in Susquehanna Ins. Co. v. Stauffer, 125 Pa. 416. “ The wording of this bylaw,” said Mr. Justice Mitchell, who delivered the opinion of the court, “is confused and obscure, but the general scheme intended is reasonably clear. It is, that all policies which were in force at the time of the assessment, or at the time of the loss, both or either, (as the ease may be,) shall be liable for the loss, but the assessment shall be laid, in the first instance, upon the policies in force at the time of the loss, whether since expired or not; and the policies, issued subsequent to tbe loss and remaining in force at the time of the assessment, are to be assessed only for the balance if the first branch of the assessment should be insufficient. In pursuance of this general intent, the first clause directs, not that all members whose policies are in force at the time the assessment is declared shall be assessed, but that they shall be liable to assessment, and qualifies this liability by making it subject to a specified abatement. The second clause then proceeds to define the abatement, which is that policies now expired, but which were in force when the liability accrued, shall be assessed pro rata with all the policies then in force, i. e., at the time of the loss or liability incurred, and this first branch of the assessment shall be deducted from the total of liabilities, and the balance only be then assessed upon the other policies ‘then in force,’ i. e., those which were in force at the time of the loss, and which have not yet expired.” To the same effect, also, is Thropp v. Insurance Co., 125 Pa. 427, where the same construction given to the by-laws of 1879 was given to the by-laws of 1876. We understand, from what the witness Huntzinger testifies, that the assessments were made upon the premium [517]*517notes in conformity with this construction of the by-laws, and according to the classification therein recognized.
But the note in suit, as we have said, was an annual-interest note; and, in reference to such notes, it is, in the third clause of the thirtieth section of the by-laws of 1876, provided as follows :
“Third. Notes subject to the payment of annual interest, and deposit notes upon which the interests have been paid in advance, shall not be assessed until all other notes held by the company, liable to assessment, shall have first paid in assessments an amount equal to the interest paid and to be paid within six months next succeeding the date of such assessment; any deficiency then existing may be equitably assessed on all the notes held by the company.”
No interest had been paid on this premium note: all that had- been paid was the cash premium; and, although in this particular instance, that was just 6 per cent upon the premium note, it was not paid as interest, nor was it so regarded. The interest upon the note was wholly unpaid; and, as the note by its terms was liable to assessment for losses, and was not embraced in the excepted class defined in this third clause, we can see no reason why it should have been omitted in the assessment. “Annual interest and deposit notes, upon which the interests ” had been paid, were not liable to assessments “ until the other notes had paid in on assessments an amount equal to the interest thus paid and to be paid within six months,” etc.; but Leavy had paid no interest, and his liability was not affected. Those only who had paid the annual interest were entitled to abatement; any deficiency then existing to be equitably assessed on all the notes held by the company, according to the classification already referred to.
In whatever form the policy is issued, however, it appears that what is termed the “ schedule premium ” forms the uniform basis of assessment. The schedule premium is the result of the rate applied to the amount of the insurance. Property is rated for insurance according to the supposed risk; it may be rated at 1, 2, 3, or more per cent upon the amount, according to the risk. Thus, in the case in hand, the property was rated at 3 per cent, which rate applied to the #2,500, the amount of insurance, gives the schedule premium, #75. The schedule [518]*518premium multiplied by 11 determines the amount of the premium note, which is the basis upon which the annual interest is to be paid; and multiplied by 20, determines the practical basis of the assessment. This basis of assessment is uniform, and applies to all premium notes, whether taken upon the annual interest or general assessment plan; for it would seem that all premium notes subject to the provision of § 30 of the by-laws are liable to assessment. As to the liability to assessment of persons insured under the deposit note plau, the testimony is not very clear. According to that portion of § 30, quoted above, it might appear that they are, in a certain contingency.
Under the general assessment plan, the premium notes were taken in a sum much larger than under the annual interest plan, in which latter case the amount was fixed with reference to the annual interest payment. It would therefore be grossly inequitable and unjust to assess these different classes of notes according to the same rate. The by-law provides that in a certain contingency “ all the notes held by the company shall be equitably assessed ” to make up the deficiency. As the different classes of notes were drawn in sums entirely disproportionate to the risks incurred, it was but equitable and just that some scheme should be adopted to establish a uniform and just basis of assessment. To accomplish this purpose, assessments were in all cases made upon the true and proper basis of the rate of the risk, applied to the amount insured. This gives, in each case, the schedule premium, which is, in fact, the true basis of the assessment; the multiplication of this by 20 'was simply for convenience, and, as this was done in all cases, the results were uniform. The assessments were upon the note, but they were for a sum, or according to a uniform rate, ascertained in the manner specified. This method was just and equitable, we think, and did not need the amendment of 1877,. or the by-laws of January 21, 1879, to sustain it. It is difficult to see how all the notes held by the company could have been equitably assessed in any other way. It may be conceded that the defendant was not liable for assessments beyond the amount of the note, but, as the note carried interest from its date, that limit was not reached. This particular form and method of assessment was approved in Crawford v. Insurance Co., reported [519]*519in 11 Cent. R. 653, and we can see no reason why we should not adhere to the rulings in that case.
The Judgment is therefore reversed, and a. venire facias de novo awarded.
no. 382.
Me. Justice Claek :
For reasons given in our opinion, ante, 513, between the same parties, this
Judgment is reversed, and a venire facias de novo awarded.