Kinne v. Mutual Fire Insurance Co.

This court has quite consistently held that mutual insurance companies such as defendant insure only their members, and that membership in such companies may not be obtained by estoppel, the latest speaking of the court being in the case ofCrank v. Insurance Co., 239 Mich. 642. But plaintiffs do not claim to be members by estoppel. They claim to be members by reason of the provisions of section 14. They claim that from the death of their ancestor they have continued to pay all assessments levied pursuant to section 19 of the charter, none of which were tendered back until the day of the trial, have taken out additional insurance, and have, therefore, continued their membership granted by that section. While defendant's secretary testifies that defendant has not relied on the provision of section 24 in cases where the fire occurred before the estate is closed, it is obvious that if defendant's contention is accepted, on the death of a member the insurance is at an end and what has been done as a matter of grace does not alter the law. Upon the death of the owner the title passes to the heir subject to debts and expenses of administration. The heir takes title as of the date of that event rather than as of the date of the final order of the probate court, and unless the provisions of section 14 make him a member the policy is forfeited. Forfeitures are not favored in the law and before we give a construction to these provisions which would operate to work a forfeiture, we should be pretty well satisfied of our grounds.

Section 16 invoked by defendant is manifestly applicable to new policies. To hold that the heir did not become a member until and unless he took all the steps necessary to procure a new policy would render the provisions of section 14 meaningless and of no value. They were placed in the charter for a purpose and we think that purpose is obvious and should be given effect. They were placed there to prevent the lapsing of the policy on the death of the insured, to permit the heir to step into the shoes of the ancestor and by continuing the payment of the assessments to continue the insurance in force for his benefit. If the provisions of section 14 had this purpose, and we think they had, it necessarily follows that the provisions for forfeiture found in section 24 do not have reference to a change of title occasioned by the death of the insured.

It is suggested rather than urged that plaintiffs took under the will rather than under the statute of descent, and, therefore, were not heirs. But we do not think the word "heirs" should be given so narrow or technical meaning. Speaking of that word, Mr. Justice COOLEY, who wrote for the court inHascall v. Cox, 49 Mich. 435, 440, said:

"But in common speech the word is frequently used to indicate those who come in any manner to the ownership of any property by reason of the death of an owner, and may then include next of kin and legatees as well as those who take by descent."

The judgment will be affirmed.

NORTH, WIEST, CLARK, McDONALD, and SHARPE, JJ., concurred.

Chief Justice FLANNIGAN and the late Justice BIRD took no part in this decision.