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pleaded in abatement. But this case is clearly distinguish-
able from that. There no written contract was sued on;
the action was brought for goods furnished to a trading asso-
ciation by an outsider, and the court held that, the defendants
being members of the association, the goods were in law fur-
nished to them. Here, however, the insured was one of a
number of persons who merely agreed to pay certain assess-
ments in case one of them died ; no one of them agreed or
expected to pay the whole sum mentioned in the contract,
nor was it expected that any one would do so ; in fact, there
was no contract to pay any definite sum, only such amount
of assessments as should be collected. These defendants
certainly did not intend to become personally liable to pay
the sum named in the certificate, or any sum whatever be-
yond the amount of their assessments, if they happened to
be some of those who were insured. We submit that on the


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802 JANUARY, 1890.

Lawler v. Murphy.

face of the paper itself it appears that they did not intend to
bind themselves personally.

2. The considerations arising nnder the other grounds of
demurrer strongly confirm this view. The second paragraph
of the complaint alleges that by said agreement the defend-
anU agreed to pay a sum received from a death assessment
" to be made by them;^^ and this is the real ground of claim
upon which the complaint is based, and to which the remain-
ing grounds of demurrer are directed. The plaintiffs theory
seems to be that these defendants either personally, or in
common with other members, made a contract with the
plaintiff that they would, upon the death of Lawler, make
an assessment upon all the members sufficient to pay her a
thousand dollars. Upon an examination of the contract it
will appear that all that is agreed is that whatever shall be
t^eeived from an assessment shall be paid to her ; and that is
all. Until some sum is so received there can be no breach
of that agreement. This is so clear that the plaintiff to make
out any case is obliged to add something not found in the
contract. She says that the agreement was to pay a sum
received from an assessment " to be made by them," that is,
by these defendants. Now there is not a word in the policy
binding these defendants, or the association itself, to make an
assessment, nor was it intended that there should be. On the
contrary, it is expressly stated that the assessments are to be
"levied from time to time by the directory. ^^ The second
rule also, which is made a part of the contract, provides for
the payment of assessments of " whatever the directory shall
deem necessary." It is nowhere alleged that any sum has
ever been received from an assessment which the defendants
or the association failed to pay over ; the only breach of the
contract alleged is that the defendants had not made an as-
sessment, and as the contract shows that not only they did
not agree to, but that if any assessment was to be made it
was to be made by some one else, no ground of action is
shown against these defendants. This instrument is entirely
different from a common insurance policy, where a orpora-
tion in consideration of annual payments agrees to pay a


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JANUARY, 1890. 303

Lawler v. Murpby.

definite amount upon the death ol the insured, and also from
what is called assessment insurance, where a corporation
agrees to make assessments to pay a death claim. |t appears
to be a mutual agreement among certain members of a be-
nevolent society to pay certain sums upon the death of one
of their number, or if they fail to pay them to forfeit what
they have already paid in. The third rule provides that if
any one fails to pay his assessment his contract with the fund
shall "lapse and be void." The contract itself having ter-
minated, no liability under it remains. As it would be im-
practicable for each person insured to contract directly with
all the others, they formed an association with certain officers
to act for them, namely, a president, secretary and treasurer,
and a body called " the directory," who were to make such
assessments as they should deem necessary ; and when such
assessments were actually made, whatever was received by
the treasurer was to be paid upon a death claim. It was
not contemplated that there should be any capital or fund
from which such claims should be paid as they became due,
without regard to the amount of assessments actually re-
ceived, and still less that the persons who signed the certifi-
cate should become personally liable to pay. The whole frame
of the instrument shows that no person was to become liable to
pay anything more than an assessment, nor could any insured
expect to receive anything more than the amount which was
actually received from that source, after the directory had
ordered one to be made.

3. The theory of the plaintiff with regard to the assessments
seems to be that the legal effect of this instrument was an
agreement by these defendants, either alone or in common
with others, that upon the death of Lawler they would make
an assessment, and pay the amount received to the plaintiff.
She alleges that the assessment was to be " made by them,"
that is, by the defendants. But in speaking of the assess-
ments paid by Lawler, she alleges that they were made by
the defendants or by the directory. And she alleges that
** said assessment has never been made by the defendants,"
but does not allege that it has not been made at all, or by


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804 JANUARY, 1890.

Lawler v. Murphy.

the directory. The instrument nowhere contains any agree-
ment that these three defendants, either personally or as
officers, were to make the assessment. On the contrary, it
distinctly states that they are to be made " by the directory."
It is nowhere alleged in the complaint that these defendants,
or any of them, were members of the directory, or that they
had anything to do with making assessments ; so that if a
failure to make assessments is the ground of the action it
cannot be sustained as against them. And it is settled by
several cases that upon such an agreement as this no action
lies against any one for the amount of the insurance, but
the remedy is in equity to oblige the proper persons to make
an assessment and pay it over. The case of Smith v. Cove-
nant Mut. Ben. Asso,^ 24 Fed. Rep., 685, is exactly in point.
In that case the certificate provided that upon the death of
the insured member the association should make an assess-
ment upon the other members, and that the sum so collected
should be paid to his heirs or devisees. The plaintiff
brought an action at law claiming to recover the full sum
named in the instrument, and the defendant demurred on
the same grounds as in the present case. The court held
that when no assessment had been made, and no moneys
received, no action at law would lie, and that the remedy
was in equity to cause an assessment to be made. This
case was decided in 1885 by Judges Dyer and Haelan, and
was an action against a corporation, where there was an ex-
press agreement to make an assessment. The only case to
the contrary is Lueder^s Extb, v. Hartford Life ^ Annuity
Ins Co., 12 Fed. Rep., 465, {S. (7., 4 McCrary, 149,) decided
in 1882 by Judge Treat ; but that decision was explained
away by Judge McCraey in Eggle%ton v. Centennial Mut,
Life As8o.<i 19 Fed. Rep., 201. And in Burdon v. Mass.
Safety Fund Asso., 147 Mass., 360, decided in 1888, the Su-
preme Court of Massachusetts says: — "Such is the plain
language of the contract, and such is the construction which
has been given to similar contracts in all the cases but one
that have been brought to our attention. The single excep-
tion is in Lueder^B Uxrs, v. Hartford Life ^ Annuity Lm.


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JANUARY, 1890. 805

Lawler v. Murphy.

Co., 4 McCrary, 149 ; but the decision of the district judge
in that case is overruled or overborne by other decisions."
See also U. S. Mut. Ace. Abso. v. Barry, 131 U. S. R., 100;
Bailey v. Mut, Ben. Asso,, 71 Iowa, 689 ; Newman v. Cove-
nant Mut. Ben. Asso.^ 72 Iowa, 242. In the last case, in
which the agreement was similar to ours, the court says :
" The extent of the defendant's obligation is fixed by the
certificate of membership. The association does not agree
to pay any sum from a general fund, nor does it provide any
genemi fund. It merely agrees to levy an assessment and
pay over such sums as may be collected upon it, less ex-
penses. If the company, doubting or denying its liability in
a given case, refused to levy an assessment, the contract is
not thereby changed and the company's liability extended.
It may be conceded that a wrongful refusal would be a
breach of the contract. But we are unable to see how more
than nominal damages could be recovered for such a breach."
The reasons urged by the court in this case, it seems to us,
dispose of the claims of the plaintiff so thoroughly and
clearly that it is unnecessary for us to consider them more
at length. These considerations cover all the grounds of
demurrer, and we submit that the defendants are not per-
sonally responsible upon this certificate ; and that if they are
an action at law could not be maintained to recover
either the sum named in the policy or the amount which
might possibly be collected on an assessment.

Seymour, J. This is an appeal from the judgment of
the Superior Court sustaining the defendants' demurrer.
The cause of demurrer upan which the issue was found for
the defendant alleges that it appears from the contract for
a bieach of which the suit was brought, that the only agree-
ment made therein was to pay such sum as might be received
from a death assessment, and that it is not alleged in the
complaint that any such sum was ever received.

To understand the force of this objection and the consid-
erations applicable to it, it is necessary to set out the con-
tract in full. It is as follows ; —
Vol. Lvin.— 20


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306 JANUARY, 1890.

Lawler v. Murphy.

" Certificate No. 446. Benefit $1,000.

" Connecticut State Insurance Fund of the Ancient Or-
der of Hibernians of the State of Connecticut.

"In consideration of one dollar, initiation fee, and assess-
ments levied from time to time by the directory, Thomas
Lawler, of division No. 2 of Hartford, County of Hartford,
State of Connecticut, receipt of which is hereby acknowl-
edged, and the agreement on the part of the said Thomas
Lawler to accept the following conditions and rules as a
part of this contract between said A. O. H. Insurance Fund
and himself, hereby constitutes the said Thomas Lawler a
benefit member of said A. O. H. Insurance Fund, and agrees
to pay Mary Lawler, wife, if living, if not, to the heirs at
law of said member, in sixty days after due proof of the
death of said member, a sum received from a death assess-
ment, but not to exceed one thousand dollars.


" The conditions upon which this certificate is issued by
the Fund and accepted by said member, are the following: —

''^ First. That the statements and declarations made by
and on behalf of said member in his application to become
a benefit member of said Fund, which are hereby referred
to as a basis of this contract, and are a part thereof, and on
the faith of which this certificate is issued, are in all re-
spects true, and that no fact has been suppressed relating to
his health or circumstances, affecting the interests of said
Fund or their inducement to accept the risk.

^^ Second. That the said member must be a member in
good standing in the order at the time of his death, other-
wise this certificate will be null and void.

" Third. Any assignment of this certificate shall be void
unless assented to in writing by said Fund.

^"^ Fourth. The death claim under this contract shall be
payable in sixty days after satisfactory proof of death of
said member shall have been furnished at the office of the
secretary of the Fund, by the certificate of the attending
physician, if there was any, and the full and particular


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JANUARY, 1890. 807

Lawler v. Murphy.

statement of at least one competent and disinterested mem-
ber of the order, stating the time, place, cause, and circum-
stances of the death of the party,

^^ Fifth. No officers of divisions are authorized to make,
alter or discharge contracts or waive forfeitures, and any-
such act, to be valid, must be done in writing and signed by
the president and secretary of the directory.

" Sixth. This contract shall be void if the party shall die
in or in consequence of a duel, or by the hands of justice,
or in the violation of or attempt to violate any criminal law
of the United States or of any state or county in which he
may be.

" Seventh. A failure to comply with the rules of said Fund
as to payment of assessments, or falling into gross and con-
firmed habits of intoxication, shall also render the certificate

*' MgKth. This certificate is subject to all rules and regula-
tions that the state convention may, from time to time, adopt
for the general advancement and interest of the Fund.


" The rules governing this contract, and which form a part
of the same, are as follows : —

" First. There shall be paid by the member under this
contract to the secretary of the Fund, on the day of the
month in which this contract was made, the sum of one dol-
lar, and he shall not be liable for any further sum except as
follows : —

" Second. Upon the death of any member the said Thomas
Lawler shall at once pay, if required, to its secretary, an
additional assessment of whatever the directory shall deem

" Third. The form of notice to, and process of collection
from, each of the members of the assessment above named,
shall be as follows : — A notice shall be sent announcing such
assessment, and the number thereof, to the last post-office
address given to the secretary of the Fund by each member,
and if the assessment is not received within forty days from


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808 JANUARY, 1890.

Lawler v. Murphy.

the mailing of said notice, it shall be accepted and taken as
sufiBcient evidence that the brother has decided to terminate
his connection with the Fund, which connection shall there-
upon terminate, and the brother's contract with the Fund
shall lapse and be void ; but said brother ihay again renew
his connection with the Fund by a new contract, made in
the same manner as at first, or for valid reasons to the offi-
cers of the Fund, (such as a failure to receive notice of an
assessment), he may be reinstated by paying assessment

" Fourth. The above rule governing the collection of as-
sessments for death-claims shall also apply to the collection
of the annual assessment.

" Fifth. Each applicant to become such member must sign
the Fund's form of application, countersigned by the board
of directors of the division of which he is a member.

" In witness whereof the said A. O. H. State Insurance
Fund hath, by its president and secretary, signed and deliv-
ered this certificate at its office, this 12th day of July, 1886,

"John D. Cunningham,

Secretary Ins. Fund.
"P. J. O'Connor,

Treasurer Ins. Fund,
"John P. Mubphy,

President Ins. FundJ**

la it true, as claimed by the defendants, and in the sense
in which they claim it, that the only agreement contained in
the above contract is to pay such sum as might be received
fi'om a death assessment? Or, to put it in another form,
what does the agreement to pay a sum received from a death
assessment imply and involve, when taken in connection
vrith the other provisions of the contract?

The contract is a peculiar one. It is very inartificially
drawn, and it is undoubtedly difficult to give it a satisfactory^
construction. Of course it should be so construed as to make
its contemplated benefits available, if it can legally he done.
And we are, at least, warranted in assuming that the insur*


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JANUARY, 1890. 809

Lawler tj. Murphy.

ers, in accepting the money of the insured, and the insured
in paying it, undei*stood that some duty devolved upon the
foimer to secure the promised benefits of the contract to
the latter.

In addition to the agreement to pay to Mary Lawler, if
living, if not, to the heirs of Thomas, in sixty days after
due proof of his death, a sum received from a death assess-
ment, but not to exceed $1000, the contract further provides
that the death claim shall be payable in sixty days after sat-
isfactory proof of such death, except in certain cases not
necessary to be stated here, and gives the form of notice
and process for collecting the death assessment from each
member of the association. Each contract contains, also, a
promise by the insured that upon the death of any member
he will at once pay, if required, to the secretary, an addi-
tional assessment of whatever the directory shall deem ne-
cessary — additional as the contract shows to the dollar paid
upon becoming a member. This is an agreement by the
A. O. H. Insurance Fund to pay the proper person, within
sixty days after satisfactory proof of the death of the insured,
a sum, not to exceed $1000, received from a death assess-
ment. The contract contains the agreement of members to
pay such assessments and specifies the process by which
its collection shall be undertaken — " a notice shall be sent "
announcing such assessment, etc. All of which, taken in
connection with the other provisions of the contract and
the situation and manifest intention of the parties, seems to
us to import a promise to make, or cause to be made, the
necessary assessment to meet the death claim promised to
be paid.

It is well established that whatever is necessary to be
done in order to accomplish work specifically contracted to
be performed, is parcel of the contract, though not specified.
It is also a principle of general application that whatever
may be fairly implied from the terms or language of an in-
strument, is, in judgment of law, contained in it. Currier
V. Boston ^ Maine 11. iJ. Co., 34 N*. Hamp., 498 ; Rogers v
Kmeland, 13 Wend., 114.


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810 JANUARY, 1890.

Lawler «. Marphy.

Addison, in his work on contracts, sec. 1400, says : " Al-
though the words of a contract under seal do not in them-
SjBlves import any express covenant, yet the law, in order to
promote good faith and make men act up to the spirit as
well as to the letter of their engagements, will create and
supply, as a necessary result and consequence of the con-
tract, certain covenants and obligations which bind the
parties as forcibly and effectually as if they had been ex-
pressed in the strongest and most explicit terms in the deed

In White v. Snell^ 5 Pick., 425, an action of assumpsit,
the defendant " for value received promised to pay a sum of
money if, and when, he should recover his demands against
-4.." It was held competent for the plaintiff to prove that
the defendant had no demands against A^ and that so the
promise was absolute, or that he had not used due diligence
to collect them.

In Savage v. Whitaker^ 15 Maine, 24, the court says : —
" An engagement to do a certain thing involves an undertak-
ing to secure and use effectually all the means necessary to
accomplish the object."

Mabshall, C. J., in Ogden y. Saunders^ 12 Wheat., 341,
speaking of the power and policy of the law to supply in
contracts what in that case is presumed to have been inad-
vertently omitted by the parties, says that the parties are
supposed to have made those stipulations which as honest,
fair and just men they ought to have made.

The contract in Freeman v. National Benefit Society^ 42
Hun, 252, is, in many respects, similar to the one under con-
sideration. Although the stipulation in that case was to
pay a sum ^^ equal to the amount received from a death as-
sessment, but not to exceed $3000," instead of '* a sum re-
ceived from a death assessment," etc., yet the court held that
" the provision in the body of the certificate that payment
should be made of a sum equal to the amount received
from a death assessment, not to exceed the sum specified, in
ninety days after due proof of the death of the member was
given, implies an obligation upon the company to pi*oceed


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JANUARY, 1890. 811

Lawler v. Murphy.

and make the necessary assessment to raise the fund within
the time during which it was provided that the claim should
remain in abeyance."

We conclude then that, in connection with the express
promises contained in the contract in this case, there is an
implied promise to make an assessment to pay the death
claim agreed to be paid; an implied promise which the law,
'* in order to promote good faith and make the parties act
up to the spirit as well as to the letter of their engagements,
will create and supply as a necessary result and consequence
of their contract." The contract to pay a sum received
from a death assessment, taken in connection with the other
express provisions, involves, in the language of one of the
decisions above quoted, an undertaking to secure and use
effectually all the means necessary to accomplish the result,
and require that an assessment should be made.

In this view of the case the allegation of the demurrer,
that " it appears by said contract that the only agreement
made therein was to pay such sum as might be received
from a death assessment," is not sustained. There was a
further agreement, namely, to make such assessment. The
complaint alleges that it was not made nor the amount of
insurance paid. This cause of demurrer therefore must fail.

It is true that the complaint does not state, in terms, that
the defendants agreed to make an assessment, but it sets
out the contract in full and alleges as a breach of it, for
which it claims damages, that ^^said assessment has never
been made by the defendants."

This method is sanctioned by the Practice Act and the
forms and rules given under it. Rule III., sec. 5, states
that it is unnecessary to allege any promise or duty which
the law implies from the facts pleaded.

Whatever, therefore, may have been the theory of the
plaintiff, inasmuch as the agreement to make the assessment
to pay the death claim is implied in the contract, we can-
not sustain the demurrer upon this point.

This disposes of the only ground for demurrer specifically
decided by the Superior Court. The defendants however


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812 JANUARY, 1890.

Lawier v. Murphy.

insisted, in the argument before us, that the real question
is, whether the suit can be maintained at all against these
defendants, that it would be unreasonable not to dispose of
the whole matter now and here, and that a demurrer goes
back and searches out all the errors in the pleadings. Per-
haps, in order to determine whether the plaintiff was injured
by the decision of the court sustaining the cause of de-
murrer already disposed of, we ought to pass upon the other
causes assigned, for, if the action cannot, in any event, be
sustained against the defendants as individuals, the plaintiff
has sustained no injury from the decision that the complaint
fails to set forth a cause of action against anybody.

Then too, all the causes for demurrer were argued before
us, and the conclusions to which we have come will not make
it unjust to the plaintiff to accede to the defendants' claim,
that we should decide all the points which were argued.

The defendants assign for further cause for demurrer, that
it appears from the contract declared on that the defendants
made no personal agreement upon which they were person-
ally liable, but that the contract was signed by them only
as officers of the organization mentioned therein. This issue
is raised, not as a question of fact, but as a question of law
upon the pleadings.

As a matter of law does the contract, upon its face, show
that the defendants made no personal contract upon which
they were personally liable? The complaint alleges that
they were jointly engaged in carrying on a life insurance
business under the name of the " Connecticut State Insur-
ance Fund," and that they entered into the contract sued
upon. If the facts are so should they not be held liable ?
Does the contract, as a matter of law, preclude that state of
facts? If they had simply been sjued as individuals, upon a

Online LibraryConnecticut. Supreme Court of ErrorsConnecticut reports: containing cases argued and determined in ..., Volume 58 → online text (page 28 of 60)