of the charter and by-laws which, as has been stated, enter into and form a part of such contracts. The primary rule is that the intent of the legislature and of the parties to the contract or designation must be first ascertained and then given effect.1

The consideration of the contracts of benevolent associations consists in the assessments and dues paid, which answer the same purpose as premiums paid by the insured to other companies. The same conditions and provisions with respect to forfeiture of rights for nonpayment are usually provided for in these contracts as in ordinary policies of insurance. The provisions of the certificate with respect to the payment of the sum therein stipulated for must be substantially complied with. Such a contract is not one of insurance for a single year with the privilege of renewal from year to year by paying the periodical dues and assessments, but it is an entire contract of assurance for life, subject to discontinuance and forfeiture for nonpayment.3

In a mutual insurance company membership dates from the consummation of a contract and not before.4 During negotia

Dolan v. Court of Good Samaritan, 128 Mass. 437; Van Bibber v. Van Bibber, 82 Ky. 350; Splawn v. Chew, 60 Tex. 535; Eastman v. Provident Mut. Relief Assoc. (N. H. 1883), 20 Cent. L. J. 266.

1. Bishop on Con., § 380; 2 Pars. on Con., p. 494; 1 Redf. on Wills, p. *433 and vol. 2, p. *20.

The whole of the statute, law, contract or designatory writing must be looked at and considered. The courts are uniform in holding that the rules and regulations of benefit societies are to beconstrued liberally when resorted to for the purpose of effecting benevolent objects. Supreme Council American Legion of Honor v. Perry, 140 Mass. 580, 589; Supreme Lodge Knights of Honor v. Martin (Pa.), 12 Ins. L. J. 628; 13 W. N. C. (Pa.) 160; Maneely v. Knights of Birmingham, 115 Pa. St. 306; Erdmann v. Mutual Ins. Co., 44 Wis. 376; Ballou v. Gile, 50 Wis. 614; Supreme Lodge Knights of Pythias v. Schmidt, 98 Ind. 381; Gundlach v. Germania Mechanics' Assoc., 4 Hun (N. Y.) 339; Expressman's Aid Assoc. v. Lewis, 9 Mo. App. 412; Whitehurst v. Whitehurst, 83 Va. 153; Masonic Mut. Relief Assoc. v. McAuley, 2 Mackey (D. C.) 70; Duvall v. Goodson, 79 Ky. 224; Van Bibber v. Van Bibber, 82 Ky. 347; Massey v. Mutual Relief Assoc., 102 N. Y. 523; Dietrich v. Madison Relief Assoc., 45 Wis. 79.

2. The payment of the premium in one case and of assessments in the

other, operates merely to continue the old contract. Mutual Ben. L. Ins. Co. v. Robertson, 59 Ill. 123; s. c., 14 Am. Rep. 8. But the nonpayment of assessments will not forfeit the rights of the member under the certificate unless so

provided. American Ins. Co. v. Klink, 65 Mo. 78; Woodfin v. Asheville Mut. Ins. Co., 6 Jones L. (N. Car.) 558.

3. Worthington v. Charter Oak Life Ins. Co., 41 Conn. 399; New York L. Ins. Co. v. Statham, 93 U. S. 24.

Acts 18th Gen. Assem. Iowa, ch. 211, § 2, providing that an omission to attach to insurance policies the applications and representations upon which they are issued shall not invalidate the policy, but merely preclude the company from pleading or proving the falsity of such representations, is applicable to the policies of mutual benefit associations. McConnell v. Iowa Mut. Aid Assoc. (Iowa), 43 N. W. 188.

A condition in a policy of a mutual insurance company, that "when a note is taken for the cash premium, if it is not paid within sixty days after due, all obligations of the company to the insured, until such note is paid, are suspended," held valid. Joliffe v. The Madison Mut. Ins. Co., 39 Wis. 111; s. c., 20 Am. Rep. 35.

4. Eilenberger v. Protective Mut. F. Ins. Co., 89 Pa. St. 464.

A person who had presented to and was accepted by a mutual life insurance company his application for membership, and premium note properly signed,

tions for insurance, a mutual company occupies no other or better position than one organized on the stock plan, and cannot profit by the fraud of its agent; for the membership arises from but does not precede the contract. As to all preliminary negotiations, the agent acts only on behalf of the company.

Where the insured surrenders his policy, and it is agreed by the company that it shall be cancelled, the insured, from that time, ceases to be a member, and, although liable to assessments, which accrued while he was a member, is not liable for debts contracted after the surrender of his policy.2

It is often necessary to keep in view the fact that, though the contract of membership embodies the contract of insurance, the latter is in effect a distinct and independent matter.

When mutual contracts are independent, the neglect of one party to perform will not absolve the other party from peformA contract, made by a mutual insurance company with one of its members, is equally binding as if made with a stranger.3 In the absence of statutory restrictions, minors are not ineligible to membership in mutual benefit societies. The objection

that an infant can avoid his contract is not important, as adult members may do the like without incurring liability.1

2. Whole Term Life Certificates.-In mutual, as in other companies, the contracts of insurance are made to cover either the whole period of life or a shorter term. In life, or, as they are called, whole term policies, the agreement may be to pay a sum certain or a given sum for each solvent member holding unforfeited contracts at the date of death of the insured. Sometimes dividends are provided for to be applied in reduction of assessments, but this provision is seldom made in the contracts of strictly mutual benefit societies, where there are no stockholders. The practice of allowing dividends as a rebate is confined to certain companies, which combine the features of mutual benefit with capital stock.

3. Endowment. Many benefit associations, especially those organized for the sole or main purpose of paying benefits and death losses, issue endowment as well as whole term certificates, thus further imitating the methods of regular or "old style "insurance. In endowment certificates the stipulated sum is payable to the insured if he should survive a certain period, or attain a specified age, and if he die before the expiration of the specified period, the payment to be made to his representatives or to a person designated. There are two kinds of endowment certificates. First, where the sum specified becomes payable only if death should occur during the time specified in the policy. The insurance may be upon one or more lives, payable at the termination of one or of both; or, if one should terminate before the other, to the survivor. Second, where the sum is payable at the death of the insured, if that should occur before the death of another person named in the certificate, but not otherwise. Should such other person die before the insured, the transaction fails. Endowment certificates are contracts of life insurance as much as if they covered the whole terms.3

is raised by which he is paid. If payment is refused he must pursue his ordinary legal remedies, and to him attaches none of either the rights or disabilities of membership."

1. Chicago Mut. L. etc. Assoc. v. Hunt, 127 Ill. 257.

In the same case it was held not to be a valid objection to minors as members that they could not act as trustees, because of their immaturity of judgment. The same objection would hold against many adult members, yet their lack of intelligence or business experience would be no reason for excluding them from membership. Id.

2. According to article 11, section 1, of the constitution of the endowment rank of the Knights of Pythias, a bene16 C. of L.-3

fit certificate of life insurance is not forfeited for the nonpayment of the local lodge dues until the member is. more than six months "in arrears" for the dues. Wiggin v. Knights of Pythias, 31 Fed. Rep. 122.

3. Briggs v. McCullough, 36 Cal. 550, Carter v. John Hancock Mut. Fishing Ins. Co., 127 Mass. 153; Endowment. & Ben. Assoc. v. State, 35 Kan. 262; Goodman v. Jedidjah Lodge, 67 Md. 117..

Where a lodge had issued endowment: certificates to each member, which entitled his wife and children, or other beneficiary whom he might name, to $1,000 upon his death, it was held that such certificates are in all essentials insurance policies, and the courts will adjudicate the rights of the members, in reference 33

4. Fire Policies.-The charter, the policy issued by the company, and the conditions annexed thereto govern the rights and duties of the parties in a mutual fire insurance company, and must be read together. The main distinguishing feature of a fire policy is in the matter of assignability and the effect upon the contract of insurance of an alienation of the property covered. In this respect the result of all the authorities may be thus stated: 1. That a sale of the property covered cannot take place without the consent of the company. 2. That the purchaser must be one whose purchase has been made with the consent of the company, or has been ratified and approved by it. 3. That the purchaser must be a different person from the parties insured, or either of them. In other words, the same must be to a third person, and not to one of the assured. The entire interest must be transferred to some one who was not interested in it previously. 4. That the assured cannot terminate his membership in the company, nor be released from the obligations of the premium note, without paying up all arrears of assessments for losses previously incurred.2

Interest in the property insured is an essential link in the relation of insurance, and the fact that a premium note has been executed as a means of securing the payment of losses during his membership, does not alter the case so as to make the vendor liable to assessments with which to pay the loss by fire of the property sold.3

5. Extent and Nature of Liability. The liability assumed by the parties to a certificate of membership and insurance in a benefit assessment association may be of such extent and nature as they choose to make it, provided it be within the chartered powers of

to such certificates, upon the same principles as apply to insurance companies. Goodman v. Jedidjah Lodge, 67 Md.

117.

1. Hyatt v. Wait, 37 Barb. (N.Y.) 29. The contract of insurance is a personal contract with the assured, and the policy does not pass so as to continue the liability of the company to an assignee or purchaser of the property insured, unless by the consent of the underwriters, or the properly authorized officer or board of the association. Simeral v. Dubuque Mut. F. Ins. Co., 18 Iowa 319.

If the by-laws, charter or rules and regulations of the company printed on the policy require a specified method of making assignments, those not made in substantial compliance therewith are not binding on the company. Cumings v. Sawyer, 117 Mass. 30.

An assignee of a policy in a mutual fire insurance company, who is entitled

to the benefit of the insurance, is liable
to assessment in case of the company's
insolvency.
Com. v. Massachusetts
Mut. F. Ins. Co., 112 Mass. 116.

2. Hyatt v. Wait, 37 Barb. (N. Y.) 29. The maker of a premium note given to a mutual insurance company for the nominal premium upon an open policy executed to cover such risks as may be afterwards endorsed thereon, is liable to the company on such note only to the amount of the actual premiums upon risks assumed by the company and endorsed thereon. Maine Mut. M. Ins. Co. v. Stockwell, 67 Me. 382; Elwell v. Crocker, 4 Bosw. (N. Y.) 22; Lawrence v. McCready, 6 Bosw. (N. Y.) 329; Brower v. Hill, 1 Sandf. (N. Y.) 629.

3. Wilson v. Trumbull Mut. F. Íns. Co., 19 Pa. St., 372; Indiana Mut. F. Ins. Co. v. Conner, 5 Ind. 170; Tuckerman v. Bigler, 46 Barb. (N. Y.) 375; Smith v. Saratoga Co. Mut. F. Ins. Co., 3 Hill (N. Y.) 500.

the association, or law under which the articles are filed, and not prohibited by law. The amount to be paid upon the happening of the event insured against may be definitely fixed in the contract, or it may be left exclusively to the provisions of the bylaws, as already adopted or to be thereafter enacted, or it may be specified in the certificate, with a reference to existing by-laws. Again, instead of a specified sum, the association may, and often does assume an indefinite liability as to the payment of the proceeds of an assessment of a certain amount upon each member.1 On the other hand, the obligations of the certificate holder may be equally indefinite. Sometimes it is stipulated that the assessments shall not exceed a certain sum, which may either be evidenced by a written obligation, called a premium note, or mentioned in the certificate.2

In other cases the agreement by the member in his application may be simply to pay such assessments as the association or the directors see fit to make from time to time. Inasmuch as this power is conferred by the by-laws, which are subject to change at the will of the majority of the board of directors, there cannot in such case be said to be any contract of insurance outside the contract of membership, since the liability of the member upon the latter is unlimited during its continuance.3

1. In the absence of any by-laws to the contrary, the liability of a mutual company is for the total loss, not to exceed the amount of the policy, and is not limited to the amount derived from an assessment. Id. Harl v. Pottawattomie Co. Mut. F. Ins. Co., 74 Iowa 39; La Manna v. National Security L. & Acc. Co., 10 N. Y. Supp. 221.

An association was bound by its con stitution and by-laws to pay an amount equal to $1.50 for each certificate in force at the time payment became due, not to exceed $4,000. It was also required to pay the full amount of its certificates at maturity, provided there were sufficient moneys in the fund from which they should become payable; and provided, further, that such money should be applied proportionately to all certificates becoming payable the same quarter. The $4,000 was termed an endowment, and the period in which it became due, an endowment period. Assessments were both regular and special, and it was provided that they should be made by the directors. The association was also required to maintain two funds; one an endowment fund, out of which the endowments were payable; the other, an assessment fund, out of which beneficiaries were paid in case members died within the

endowment period. It was held that in the event of the death of a member, the association was liable to pay a sum equal to $1.50 for each certificate in force and no more, where there were no moneys in the assessment fund applicable to such claims. Kerr v. Minnesota Mut. Ben. Assoc., 39 Minn. 1742. See PREMIUM NOTES, III, 6, infra.

3 Mulroy v. Knights of Honor, 28. Mo. App. 463; Maryland Mut. Ben. Assoc. v. Clendinen, 44 Md. 429; s. c., 22 Am. Rep. 52; Miner v. Michigan Mut. Ben. Assoc., 63 Mich. 338; Burbank v. Rockingham Ins. Co., 24 N. H. 550; 57 Am. Dec. 300; Susquehanna etc. Ins. Co. v. Perrine, 7 W. & S. (Pa.) 348; Grand Lodge v. Elsner, 26 Mo. App. 109; McMurry v. Supreme Lodge Knights of Honor, 20 Fed. Rep. 107; Mitchell v. Lycoming Mut. Ins. Co., 51 Pa. St. 402; Šimeral v. Dubuque Mut. F. Ins. Co., 18 Iowa 319; National Ben. Assoc. v. Bowman, 110 Ind. 355; Masonic Mut. Relief Assoc. v. McAuley, 2 Mackey (D. C.) 70.

In Fugure v. Mutual Soc. of St. Joseph, 46 Vt. 362, a husband had become a member in 1862. At that time the by-laws of defendant society provided that each member paying the regular assessment, should "be entitled to twenty-five cents per day during