Becker v. Farmers' Mutual Fire Insurance

Becker sued on a policy of fire insurance, which was defended by the company on the ground that the premises were vacant at the time of the burning, and the court below sustained the defence. The policy contained no clause suspending or destroying the policy for this cause, but more than a year after its issue a by-law was passed by the directors (to whom the power of making by-laws seems *611<to have been given) whereby a policy was made to cease on «twenty days’ vacancy of the building insured.

There was some dispute concerning notice of this by-law, as well as concerning the conduct of the agent in dealing with ■the plaintiff in regard to payment of premium after the alleged forfeiture.

We have found nothing in the recognized law of insurance which would authorize an insurance company to make •such a radical change in an existing policy. It is well settled that the act of leaving property vacant is not such change •of' risk as would, withoiit express ’agreement, avoid th'e policy. Residence Fire Ins. Co. v. Hannawold 37 Mich. 103; May on Insurance 247 et seq. The effect of this bylaw, if applicable, is to add a new cause of forfeiture, and ito that extent to work a radical change in the contract.

It would hardly be claimed that it would be competent for Any legislative body to change so completely the terms of an -existing contract whei’e there is no agreement that it shall be subject to change. But it is insisted the policy itself is ■declared to be subject to the charter and by-laws, and to the daws of the State. But if the contract was valid when made there was no power in the corporation to avoid its own Agreement by one means any more than by another. Existing by-laws are in such cases of mutual insurance very properly regarded as entering into the contract and binding (the members and open therefore to inquiry. But a contract •once made with a member cannot differ in its essence from •one made with any one else, and he cannot without his con•sent be brought into changed responsibilities, which import new terms into the agreement itself. "Whatever force new by-laws may possibly have in regard to other matters, they -cannot be allowed to destroy express contracts. This principle has been repeatedly recognized as applied not only to iby-laws, but to other actioif of a similar character. See May on Insurance § 552 et seq; Ins. Co. v. Connor 17 Penn. St. 136; Great Falls Mut. Ins. Co. v. Harvey 15 N. H. 292; Hamilton Mut. Ins. Co. v. Hobart 2 Gray 543; N. E. Mut. Ins. Co. v. Butler 34 Me. 151; Revere v. Boston Cop*612per Co. 15 Pick. 363; American Bank v. Baker 4 Metc. 176; Angell & Ames on Corporations 339; 345.

Without, therefore, considering the other questions^, which could only become important if the one already mentioned were decided otherwise, we are of opinion that' judgment was wrongly ordered against the plaintiff, and that it must be reversed with costs and a new trial granted,.