Claudy v. The Royal League

• Citation: 168 S.W. 593,259 Mo. 92
• Parties: CHRISTINE CLAUDY, Appellant, v. THE ROYAL LEAGUE, Appellant
• Decision Date: 23 June 1914
• Court: United States State Supreme Court of Missouri

168 S.W. 593

259 Mo. 92

CHRISTINE CLAUDY, Appellant, v. THE ROYAL LEAGUE, Appellant

Supreme Court of Missouri, Second Division

June 23, 1914

Appeal from St. Louis City Circuit Court. -- Hon. C. C. Allen Judge.

Reversed and remanded (with directions).

Warren D. Isenberg and F. H. Bacon for plaintiff-appellant.

(1) The contract sued on in this case is a policy of insurance upon life. State v. Merchants Exchange, 72 Mo. 146; Toomey v. Knights of Pythias, 147 Mo. 129; Kern v. Supreme Council, 167 Mo. 471; Smail v. Court of Honor, 136 Mo.App. 434; National Union v Marlow, 74 F.775. (2) The contract being a policy of insurance on life, the suicide statute of this State applies. Logan v. Fidelity Co., 146 Mo. 115; Aloe v. Life Ass'n, 164 Mo. 675; Toomey v. Supreme Lodge, 147 Mo. 139; Trenton v. Humel, 134 Mo.App. 595; Herzberg v. Brotherhood, 110 Mo.App 328; Wilson v. Benefit Ass'n, 125 Mo.App. 597; Westerman v. Supreme Lodge, 196 Mo. 670; Head Camp v. Schloss, 112 P. 49. (3) The Act of 1897 exempting fraternal beneficiary societies from the general insurance laws of the State, and particularly from R. S. 1899, sec. 7896, was unconstitutional, being in violation of paragraph 26 of Sec. 53, art. 4, of the Constitution, because it split life insurance contracts issued by mutual life insurance organizations into two classes and arbitrarily applied one rule to one class and another rule to another class, enacting different rules for the government of each. There was no reason for this arbitrary classification and no reason of public policy growing out of the condition of the business of each class requiring the application of different rules. Ordelheide v. Modern Brotherhood, 158 Mo.App. 677; State ex rel. v. Vandiver, 213 Mo. 187; Armstrong v. Modern Brotherhood, 245 Mo. 153; State v. Julow, 129 Mo. 154; State ex rel. v. Railroad, 246 Mo. 512; Williams v. Donough, 65 Ohio St. 499. (4) The enactment by the defendant, after the Claudy policy was issued, of an amendment of the original by-law, intended as a substitute for it, operated as a repeal or abandonment of the original by-law. Smith v. State, 14 Mo. 147; Schrick v. Building Co., 34 Mo. 423; State ex rel. v. Shields, 230 Mo. 91; State ex rel. v. Brode, 161 Mo.App. 538; Insurance Co. v. Anthony, 68 Mo.App. 424; Maccabees v. Altmann, 134 Mo.App. 371. (5) The amendments of the suicide by-law pleaded in defendant's answer were invalid as to Claudy because they operated as a reduction of the amount promised to be paid in event of death and could not therefore affect the contract of Claudy without his express consent. The society has no power to inject a new condition into the contract. Mathews v. Modern Woodmen, 236 Mo. 326; Hysinger v. Supreme Lodge, 42 Mo.App. 635; Smith v. Supreme Lodge, 83 Mo.App. 512; Grand Lodge v. Sater, 46 Mo.App. 452; Indemnity Co. v. Jarman, 44 C. C. A. 93, 104 F.638; Lewine v. Supreme Lodge, 122 Mo.App. 547; Zimmermann v. Sup. Tent, 122 Mo.App. 591; Morton v. Supreme Council, 100 Mo.App. 76; Smail v. Court of Honor, 136 Mo.App. 434; Wilcox v. Court of Honor, 134 Mo.App. 547; Sisson v. Court of Honor, 104 Mo.App. 283; Pearson v. Knights Templar, 114 Mo.App. 283; Kavanaugh v. Supreme Council, 158 Mo.App. 234; Edwards v. American Patriots, 162 Mo.App. 231; Young v. Railroad, 126 Mo.App. 325; Weber v. Supreme Tent, 172 N.Y. 490; Dowdall v. Supreme Council, 196 N.Y. 405; Wright v. Knights of Maccabees, 196 N.Y. 391; Green v. Supreme Council, 206 N.Y. 591; Newhall v. Legion of Honor, 181 Mass. 111; Olson v. Court of Honor, 100 Minn. 117; Grant v. Independent Order, 97 Miss. 182; Sautter v. Supreme Conclave, 96 N. J. L. 763; Carnes v. I. T. M. A., 106 Iowa 281; Pokrefky v. Detroit, etc., Ass'n, 121 Mich. 456; Hobbs v. Benefit Ass'n, 82 Iowa 107.

George W. Miller and R. P. & C. B. Williams, for defendant-appellant.

(1) The Royal League is not an insurance company, but is a fraternal beneficiary association, organized under the laws of the State of Illinois, authorized to do business in this State, and is by statute exempt from the operation of the insurance laws of this State and is exempt from the suicide statute applying to insurance companies. Westerman v. Supreme Lodge, 196 Mo. 738; Tice v. Supreme Lodge, 204 Mo. 349; Scorr v. Royal League, 223 Ill. 32; Cavanaugh v. Royal League, 158 Mo.App. 234. (2) There is no law or public policy prohibiting a member of a benefit society from contracting in advance that future laws may be passed by societies changing and modifying the indemnity in the original certificate, and if such stipulation is made, the by-law will be enforced. Shipman v. Home Circle, 174 N.Y. 398; Richmond v. Supreme Lodge, 100 Mo.App. 8; Morton v. Royal Tribe, 93 Mo.App. 78; Lewine v. Supreme Lodge, 122 Mo.App. 547; Westerman v. Supreme Lodge, 196 Mo. 738; Ellerbe v. Faust, 119 Mo. 653. (3) The certificate, application, and by-laws of a mutual benefit society constitute the contract with the member and all must be read together in order to see all the terms and conditions of the contract. Westerman v. Supreme Lodge, 196 Mo. 738; Richmond v. Supreme Lodge, 100 Mo.App. 8; Slater v. Supreme Lodge, 76 Mo.App. 387; Laker v. Royal Union, 95 Mo.App. 353; Shipman v. Home Circle, 174 N.Y. 398. (4) A by-law restricting and entirely excluding liability for death by suicide is reasonable. Tice v. Supreme Lodge, 204 Mo. 349; Morton v. Royal Tribe, 93 Mo.App. 78; Supreme Commandery v. Ainsworth, 71 Ala. 436; Fraternal Union v. Ziegler, 145 Ala. 286; Knights of Pythias v. Kirtchmar, 179 Ill. 341; Scow v. Royal League, 223 Ill. 342; Knights of Maccabees v. Hammers, 81 Ill.App. 560; Knights of Maccabees v. Steinland, 206 Ill. 124; Knights of Maccabees v. Nelson, 77 Kan. 629; Daugherty v. Knights of Pythias, 48 La. Ann. 1203; Dorns v. Knights of Pythias, 75 Miss. 466; Lang v. Royal Highlanders, 75 Neb. 188; Shipman v. Protected Home Circle, 174 N.Y. 398; Tiesch v. Protected Home Circle, 72 Ohio St. 233; Chambers v. Knights of Maccabees, 200 Pa. St. 244; Knights of Pythias v. Lamalta, 95 Tenn. 157; Eversburg v. Knights of Maccabees, 33 Tex. Civ. App. 549; Hughes v. Wisconsin Odd Fellows, 98 Wis. 292. (5) There is no vested interest in a benefit certificate issued by a fraternal beneficiary association, and therefore its subsequent by-laws changing the contract or reducing its obligations does not disturb any vested rights. Westerman v. Supreme Lodge, 196 Mo. 737; Masonic Benefit Assn. v. Bunch, 109 Mo. 560; Wells v. Mutual Benefit Assn., 126 Mo. 630; Richmond v. Supreme Lodge, 100 Mo.App. 8; Morton v. Royal Tribe, 93 Mo.App. 78; Shipman v. Home Circle, 174 N.Y. 368; Casualty Co. v. Kucer, 169 Mo. 314; Grand Lodge v. McFadden, 213 Mo. 284; Hofman v. Grand Lodge, 73 Mo.App. 47; Grand Lodge v. Reman, 75 Mo.App. 402; Golden Star Fraternity v. Martin, 59 N. J. L. 207; Ables v. Ackley, 133 Mo.App. 603. (6) The Act of 1897 providing for the creation of fraternal beneficiary associations, authorizing the issuance of benefit certificates and exempting such certificates and associations from the operation of the insurance laws of this State is the creation of a class authorized by the Constitution and is not repugnant to paragraph 26 of section 53, article 4, of the Constitution. State v. Bishop, 128 Mo. 385; State ex rel. v. Herman, 75 Mo. 340; State ex rel. v. Tolle, 71 Mo. 645; Lynch v. Murphy, 119 Mo. 163; Haynie v. Knight Templars, 139 Mo. 416; Association v. Waddell, 138 Mo. 628; Fidelity Casualty v. Freeman, 109 F.849; 1 Lewis's Sutherland Stat. Construction (2 Ed.), sec. 221; Fire Ins. Co. v. Whittaker, 112 Tenn. 151; Spencer v. Court of Honor, 120 Minn. 422; People v. Life Ins. Co., 247 Ill. 92; Ins. Co. v. Clay, 197 F.435; Mut. Life Assn. v. Mettler, 185 U.S. 308; Heath & Millegan v. Worst, 207 U.S. 338; Lumber Co. v. Bank, 207 U.S. 251. (7) Where the member either in the application or certificate, agrees to be bound by after-enacted by-laws or the obligation of the society to pay is made subject to or liable to forfeiture, if the member shall not comply with laws, rules and regulations that may be subsequently adopted, as well as those in force at the time he joined, such after-enacted by-laws are valid and binding. Westerman v. Supreme Lodge, 196 Mo. 738; Ellerbe v. Faust, 119 Mo. 653; Shrick v. St. Louis Mut. Co., 34 Mo. 423; Allen v. Life Ins. Co., 8 Mo.App. 52; State ex rel. v. Grand Lodge, 70 Mo.App. 456; Richmond v. Supreme Lodge, 100 Mo.App. 8; Morton v. Royal Tribe, 93 Mo.App. 78; Supreme Com. v. Ainsworth, 71 Ala. 436; Fraternal Union v. Zeigler, 145 Ala. 287; Grand Lodge v. Burns, 84 Conn. 356; Masonic Benefit Assn. v. Severson, 71 Conn. 719; Gilmore v. Knights of Columbus, 77 Conn. 58; Bowie v. Grand Lodge, 99 Cal. 392; Stohr v. Musical Society, 82 Cal. 557; Brown v. Knights, 43 Colo. 286; Union Frat. League v. Johnson, 124 Ga. 902; Supreme Tent v. Hammers, 81 Ill.App. 560; Supreme Lodge v. Krutscher, 179 Ill. 340; Supreme Lodge v. Trebbe, 179 Ill. 348; Scow v. Royal League, 223 Ill.. 32; Supreme Tent v. Steinhous, 206 Ill. 124; Royal Arcanum v. McKnight, 238 Ill. 349; Baldwin v. Bigley, 185 Ill. 180.

WALKER, P. J. Brown, J., concurs; Faris, J., not sitting.

OPINION

WALKER, P. J.

There are cross appeals in this case.

Plaintiff brought suit in the circuit court of the city of St. Louis against defendant, a fraternal beneficiary association, on a benefit certificate of life insurance of $ 2000, issued by defendant on the life of the husband of plaintiff who several years subsequent to the issuance of the certificate died by his own hand. The defendant was incorporated under the laws of the State of Illinois as a fraternal beneficiary association, and at the time of the issuance of the certificate herein and at all times intervening between that date and...