Lothrop v. Greenfield Stock & Mutual Fire Insurance , 84 Mass. 82 ( 1861 )

Bioblow, C. J.

The trial of this case seems to have proceeded on the ground that the validity of the policy, on which the plaintiff seeks to recover, depends on the question, whether, according to the true construction of the last clause of the sixteenth article of the by-laws, it appears, by the facts in proof, that the plaintiff has neglected, for the term of thirty days, to pay assessments upon his premium note, when requested to do so by mail. If he has, then it is admitted that, by the express terms of the contract, the policy is void.

The interpretation of this clause is not free from difficulty; but, looking at the manifest purpose for which it was inserted in the contract, and construing it in the light furnished by analogous cases, we are of opinion that the plaintiff has not complied with the stipulation, and is not entitled to recover on the policy. There can be no doubt that the clause was intended for the benefit of the insurers. The company was chartered as a corporation designed to make contracts of insurance mainly on the mutual principle. It necessarily depended in great measure on the prompt and punctual payment of assessments on its premium notes, for its resources to pay losses and other claims for which it might be held liable. It was, therefore, important to adopt some mode by which notice of such assessments could readily be given to the holders of policies, and their immediate payment enforced. It would manifestly be attended with great difficulty and embarrassment, if the corporation was compelled to demand payment of the signers of each of their premium notes personally, or, in case of neglect to pay on demand, to resort to legal process to collect such assessments which might be laid in the prosecution of their business. The cost and delay of making collections in the ordinary way of small sums from many persons, scattered over a large extent of territory, would be very burdensome, and render the income of the corporation uncertain and precarious. It was, doubtless, to obviate these difficulties that the clause of the by-law under consideration was inserted. Nor was it an unreasonable stipulation. The chief consideration of the contract of insurance was the premium note; and the assured could not reasonably claim the benefit of his policy, unless he was willing to agree to some mode in which the corporation could claim the prompt fulfilment of his part of the contract. By the stipulation to pay on a demand made by mail, the assured agreed to accept the risks which that method of giving notice necessarily involved. The duty of the corporation was performed by placing a notice in the post-office, duly directed to the assured. This was all that could be done by them in fulfilling their part of the stipulation. They could not follow the letter to its destination, nor prove that it was actually received by the assured. A request by mail is a familiar phrase, and has a well understood meaning. It does not import that the person to whom it is addressed shall receive it, but only that the person by whom it is to be made shall deposit in the post-office a written request, duly directed, so that, in the usual course of mail, it will reach its destination. Shed v. Brett, 1 Pick. 401. Such was the intention of the parties in the present case. Any other construction of the contract would defeat the very purpose of the stipulation, because it would render it more difficult for the corporation to prove a demand by mail and its receipt by the assured, than it would to show a personal demand on him for the assessment.

In support of this reasonable interpretation of this clause oí the policy, we have the analogy of cases in which payment of a debt is established by proof of a remittance of the amount by mail. In all cases where, by the direction or agreement of a creditor, money is sent by mail in discharge of a debt, proof that a letter, containing the requisite sum, duly sealed and directed, was deposited in the post-office, is sufficient to main tain a plea of payment. Warwicke v. Noakes, 1 Peake R. 67 Hawkins v. Rutt, Ib. 186. Kington v. Kington, 11 M. & W 233. These decisions rest on the principle that the debtor hat, done all that was in his power to perform the contract, and that the risk of transmission was assumed by the creditor. We are unable to see that the same principle is not applicable to the con tract which forms the subject of the present controversy. The defendants, whose duty it was to make the request, transmitted it in the manner stipulated by the contract. They could do nothing further. They did not agree that the plaintiff should receive their letter. Nor was it the agreement of the parties that the request, to be binding on the plaintiff, should be received by him. The contingency of the failure of the notice to reach him through the mail was not provided for by the contract, and cannot therefore be set up as forming a valid ground on which to defeat its express stipulations.

The evidence stated in the bill of exceptions does not show that the assured had changed his domicil, at the time the notice was sent to him by mail at Roxbury. It proves only a temporary absence, of which the defendants had no notice. But if it were otherwise, and it had appeared that the plaintiff had changed bis domicil, we do not think the duty of the defendants would have been changed. The stipulation for a notice to the assured by mail must be construed with reference to the other parts of the contract, in which he is described as a resident of Roxbury, and is an agreement to give such notice to him at that place. He could not avoid this part of his contract, and defeat the stipulated effect of the request by mail, by changing his place of residence without notice to them. Until such notice, the defendants performed their part of the contract by sending notices addressed to him at the place in which he was described as residing at the time the policy was issued.

Exceptions sustained.