Wadsworth v. Jewelers' & Tradesmen's Co.

26 Jones & S. 88, 31 N.Y. St. Rep. 185, 58 N.Y. Sup. Ct. 88

• Court: The Superior Court of New York City
• Decided: May 5, 1890
• Status: Published

Opinion

By the Court.—Sedgwick, Ch. J.

The defendant was a mutual company constituted to make insurances upon the'lives of such persons as should become members. They issued a certificate of membership to the husband of the plaintiff, which declared that within sixty days after the receipt of satisfactory evidence of the death, etc, “there shall be payable to Myra L. Wadsworth * * $4,000 from the death fund of the company at the time of said death or from any moneys that- shall be realized'to the said fund from the next assessment to be made as herein after set forth, and no claim shall be otherwise due of payable except from the Reserve Fund as hereinafter provided.

I see no reason to doubt that a claim was entitled to be satisfied out of the death fund existing at the time of death, and if that death fund did not satisfy the claim, the part not satisfied was to be paid as far as possible out of the fund to be made by the collections from assessments after the death.

The certificate provided if 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 death last assessed .for, and the net amount received from such assessment, (less 20 per cent to be set apart from the reserve fund) as provided in the constitution and by laws of said company, shall go into the death fund.

Section 2 of article 5 of the constitution, and which regulated assessments, was whenever the Mortuary Fund is insufficient to meet a death claim or claims, the Board of Directors shall cause to be made upon the members, etc., an assessment for such a sum as may be by the executive committee deemed sufficient to pay such claim or claims, the same to be apportioned among the members according to the age of each member and at the rate specified in the certificate of members, etc.

It seems to be plain that any valid claim was to be satisfied not from a single fund but from the death fund on hand at the time of the death, and if that were insufficient then from the amounts of collections of assessments made to increase the first fund. The result would be that there would be a single fund called the death fund. As there was no provision for the company creating a death fund except by assessments to be made to meet death claims, the consequence would be, that there would be no death fund until after the first death, and the first claim would have no death fund on hand to resort to. Evidently this would be an injustice to the first death claim which should have a right to resort to a death fund on hand as the other members would have. So, without authority from the by-laws or constitution, but by the assent of persons as they become members, the company required each person proposing to become a member to pay a certain sum under what they called a first death assessment. In this instance the member paid what is called in a receipt given to Mm “ first death assessment, $6. ” If it be considered that such an assessment was not of a kind to be made under the articles of the constitution, certificate of membership or the by-laws, and the testimony leaving to inference what was the origin and purpose 'of the so called first death assessment, it must be inferred that the assessment was made to create a fund or death fund that should be in existence at the time of the first death, and the obligation of the company would be to treat the collections so to be made as constituting the death fund at the time of the first death. It was the right of the first claimant, by the terms of the policy, to have that death fund if not sufficient to pay the claim, increased by an assessment to be made. A provision of the certificate that has already been cited, is that the collections of the assessment shall go into the death fund.

In this case, the claim was the first death claim. At the time of the death there was on hand collections from the assessments made before the death. This was the death-fund. The company made assessments afterwards to meet the claim. The assessments were specifically made, as appears by the notice, to meet the claim of the plaintiff, because it declares that proof of the death of the following-named member having been this day received and found satisfactory, a mortuary call is made, and then the name given was Elbert E. Wadsworth, who took the certificate of membership in this case. I am of opinion that the learned judge below was right in holding that the claim was not satisfied by paying the amount of the death fund on hand at the time of the death, and that the funds that came from the assessments made to meet that claim should be appropriated to the full satisfaction of the claim.

An argument was made that the plaintiff was entitled to receive, less than the plaintiff’s claim, under the provisions of section 3, article 5, of the constitution. That section was, that in case a death claim is proven while a single assessment is insufficient to pay the said claim, there shall be paid in full satisfaction of such claim, a sum pro-rata of the membership and benefits in force at the time of the death of such membership. These expressions have to my mind no meaning and are at the best vague and indefinite and not applicable to facts shown by testimony. The terms of the contract, if there be inconsistency, should control.

The judgment is affirmed with costs.

Freedman and O’Gorman, JJ., concurred.