Armstrong v. Modern Brotherhood of America

• Decision Date: 23 June 1908
• Citation: 132 Mo. App. 171,112 S.W. 24
• Parties: ARMSTRONG v. MODERN BROTHERHOOD OF AMERICA.
• Court: Missouri Court of Appeals

112 S.W. 24

132 Mo. App. 171

ARMSTRONG v. MODERN BROTHERHOOD OF AMERICA.

St. Louis Court of Appeals. Missouri.

June 23, 1908.

1. STATUTES—CONSTRUCTION—LEGISLATIVE INTENT.

The court in construing and declaring the effect of statutes should effectuate the obvious intention of the Legislature; and this doctrine obtains with special force when it appears the intention of the Legislature conserves a wholesome purpose.

2. INSURANCE—MUTUAL BENEFIT INSURANCE —FOREIGN FRATERNAL BENEFICIARY ASSOCIATIONS—OPERATION OF GENERAL LAWS—EXEMPTIONS—SUICIDE CLAUSE.

A foreign fraternal beneficiary association, coming in all particulars within the definition, by Rev. St. 1899, § 1408 (Ann. St. 1906, p. 1111), of such associations, and rightfully doing business in the state by virtue of section 1410 (Ann. St. 1906, p. 1113), authorizing nonresident associations coming within the description of section 1408 so to do business, is not taken out of the provisions of section 1408, exempting such associations from the operation of general laws, by the fact that, by the laws of its domicile, its members are authorized to designate as beneficiaries their personal representatives, one class additional to those mentioned in section 1408; and hence a member contracting against suicide, sane or insane, could not recover by virtue of the provisions of Rev. St. 1899, § 7896 (Ann. St. 1906, p. 3750), governing old-line insurance companies, which render the defense of suicide of no avail unless suicide was contemplated at the time the policy was taken out.

Appeal from Circuit Court, Rails County; David H. Eby, Judge.

Action by Harriet B. Armstrong against the Modern Brotherhood of America on a benefit certificate. From a judgment for plaintiff, defendant appeals. Reversed and case certified to Supreme Court, as views expressed are conflicting with other decisions of Court of Appeals.

Roy & Hays and Ball & Sparrow, for appellant. E. J. Alford and J. O. Allison, for respondent.

NORTONI, J.

This is a suit on a certificate of life insurance issued by a fraternal beneficiary association. Plaintiff recovered, and defendant appeals. The question involved for decision is whether the association is one of that character exempted from the general insurance laws of this state, under the provisions of section 1408, Rev. St. 1899 (Ann. St. 1906, p. 1111). The beneficiary certificate sued upon contained a provision exempting the society from liability in event the insured took his own life, whether sane or insane. The insured committed suicide. The defendant invoked the stipulation in the insured's application, and the provisions of its certificate exempting it from liability in case of suicide. The court, nevertheless, gave judgment against it for the amount of the plaintiff's claim, on the theory that the association could not relieve itself from responsibility in that behalf, for the reason it was not such a fraternal association as is exempted from the operation of our suicide statute, which provides, substantially, that suicide shall be no defense to an action on a life insurance policy, unless it be made to appear that the insured contemplated taking his own life at the time the policy was issued. There is no claim whatever in this case that the insured contemplated suicide at the time of entering into the contract in suit. The matter is therefore to be determined by reference to and the construction of our statutes exempting fraternal societies from the operation of the general insurance statutes of the state, among which is the statute of suicide above referred to. The defendant is a beneficiary society, incorporated under the laws of the state of Iowa, and was duly admitted by the commissioner of insurance of this state to prosecute its calling here. The insured became a member of one of its subordinate lodges located at Perry, Mo., in November, 1892; and on the 26th day of that month received his certificate payable to the plaintiff, his wife, whom he designated therein as his beneficiary. The insured paid all of his assessments, and was in good standing at the time of his death, March 1, 1905, on which date he committed suicide. Proofs of death having been properly made and submitted, the defendant declined to pay the amount of the certificate for the reason stated, and the plaintiff, the insured's widow, instituted this suit. Under the law of the state of Iowa, constituting the charter of the defendant association, it is authorized to issue certificates of insurance payable to the same classes of beneficiaries mentioned in the Missouri statute (section 1408, Rev. St. 1899) and one other class of beneficiaries as well; that is to say, the Iowa statute authorizes the defendant to issue certificates of insurance payable to the personal representatives of the insured. Because of this deviation from the Missouri statute, the circuit court gave judgment to the effect that the defendant association was not exempted from the operation of our statute on suicide.

The Missouri statute dealing with the question of the defense of suicide on life insurance policies is as follows: "In all suits upon policies of insurance on life hereafter issued by any company doing business in this state, to a citizen of this state, it shall be no defense that the insured committed suicide, unless it shall be shown to the satisfaction of the court or jury trying the cause, that the insured contemplated suicide at the time he made his application for the policy, and any stipulation in the policy to the contrary shall be void." Section 7896, Rev. St. 1899 (Ann. St. 1906, p. 3750). This statute, of course, becomes parcel of every life insurance contract entered into within this jurisdiction, unless the institution issuing the contract of insurance or the contract itself is exempted therefrom by other competent provisions of our statute law. It is a well-known fact that fraternal beneficiary associations engaged in the life insurance business are organized and conducted for the purpose, among others, of affording to the members thereof indemnity against death, payable to designated beneficiaries, at a much lower rate of compensation to the insurer than is customary for life insurance in the regular companies. In aid of this idea, the legislative authority of the state has provided that associations complying with our laws and falling within the prescribed designation shall be exempted from the harsher and more rigorous provisions of the statutes respecting life insurance generally, and therefore it is competent for such beneficiary societies to contract with their members, exempting the society from liability in case the insured shall come to his end by self-destruction, as in this case. And therefore the question as to whether the contract of insurance issued by this society is to be determined by reference to the principles of the common law in that behalf and enforced as a common law contract, unincumbered with the suicide statute, is to be ascertained and determined with reference to our statute affording a definition of a fraternal insurance association. That statute (section 1408, Rev. St. 1899) is as follows: "A fraternal beneficiary association is hereby declared to be a corporation, society or voluntary association, formed or organized and carried on for the sole benefit of its members and their beneficiaries, and not for profit. Each association shall have a lodge system, with ritualistic form of work and representative form of government, and shall make provision for the payment of benefits in case of death, and may make provision for the payment of benefits in case of sickness, temporary or permanent physical disability, either as the result of disease, accident or old age, provided the period in life at which payment of physical disability benefits on account of old age commences, shall not be under seventy (70) years, subject to their compliance with its constitution and laws. The fund from which the payment of such benefits shall be made, and the fund from which the expenses of such association shall be defrayed shall be derived from assessments or dues collected from its members. Payments of death benefits shall be to the families, heirs, blood relatives, affianced husband or affianced wife of, or to persons dependent upon the member. Such associations shall be governed by this act and shall be exempt from the provisions of the insurance laws of this state,...