Bailey v. Sovereign Camp, W. O. W.

• Citation: 286 S.W. 456
• Decision Date: 12 June 1926
• Docket Number: (No. 4574.)
• Parties: BAILEY v. SOVEREIGN CAMP, W. O. W.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Supreme Court

Page 456

286 S.W. 456

BAILEY v. SOVEREIGN CAMP, W. O. W.^*

(No. 4574.)

Supreme Court of Texas.

June 12, 1926.

Error to Court of Civil Appeals of Sixth Supreme Judicial District.

Suit by Mrs. Kate C. Bailey against the Sovereign Camp, Woodmen of the World. Judgment for plaintiff was reversed and rendered in favor of defendant by the Court of Civil Appeals (277 S. W. 782), and plaintiff brings error. Reversed, and judgment of trial court affirmed.

Beall, Worsham, Rollins, Burford & Ryburn, of Dallas, for plaintiff in error.

Alvin H. Lane and Gresham, Willis & Freeman, all of Dallas, for defendant in error.

FLEWELLEN, Special Chief Justice.

On July 25, 1923, plaintiff in error filed suit in the district court of Dallas county, Tex., against defendant in error, on a beneficiary certificate issued by the defendant in error to her deceased husband, James F. Bailey, in favor of plaintiff in error as beneficiary. The case was tried before the court without a jury on October 9, 1923, and judgment was rendered in favor of plaintiff in error for $1,514.66, with legal interest thereon from January 25, 1923, and costs. On appeal, the Court of Civil Appeals at Texarkana reversed and rendered the case in favor of defendant in error. Mrs. Bailey thereafter, and within the proper time, filed her application for writ of error herein, which was granted by this court on March 24, 1926, because of an apparent conflict between the decision of the Court of Civil Appeals in this case and prior decisions of the Court of Civil Appeals at Waco in the case of Sovereign Camp, Woodmen of the World, v. Hines, 273 S. W. 927, and the Court of Civil Appeals at San Antonio in the case of The Maccabees v. Johnson, 273 S. W. 612.

The essential and controlling facts agreed upon in the trial court are fully set out in the opinion by the Court of Civil Appeals, 277 S. W. 782, not yet [officially] reported, and will not be repeated.

Mr. Bailey was a member in good standing in defendant in error's order up until midnight of May 31, 1922. Failing to pay his May assessment during the said month of May, he became automatically suspended. He could only become reinstated and entitled to the protection and benefits of his certificate by complying with the requirements contained in said certificate and the by-laws of the order.

It is well settled that fraternal benefit societies have the right and authority to enact by-laws and to make such by-laws, as was done in this case, a part of the contracts of insurance, and that the same are binding upon the insured. Wirtz v. Sovereign Camp, W. O. W., 114 Tex. 471, 268 S. W. 438, and authorities therein cited.

Under the by-laws of the order, Mr. Bailey could have become reinstated within 10 days after default by paying all arrearages and dues, and being in good health at the time of such payment and so remaining for 30 days thereafter. Bailey paid his May assessment by posting a money order on June 10, 1922, the tenth day, but said money order was not received by the local clerk at Fort Worth until June 12, 1922, the twelfth day, two days after the expiration of the 10-day period. The dues, therefore were not paid within the 10-day period, because the payment was of the date when received by the agent of the defendant order, in this instance the clerk of the local camp at Fort Worth. The rule of contracts that, when an offer is made by mail and accepted by mail, the acceptance is effective and the contract binding when the acceptance is dropped in the post office or mail box, has no application here. The rule of contracts is based upon the theory that the person making such an offer constitutes the mail service as his agent by adopting that means, and that, when the acceptance has been placed in the mail, it has been placed with the agency selected by the person making the offer and is constructively in the latter's hands. This rule, if sound at all, is not to be extended beyond the law of contracts. The defendant order in this case clearly had not constituted the mails as its agency for the collection of assessments due. Therefore such assessments are to be considered paid only upon receipt of same by the local clerk or other authorized agent designated to receive them.

Therefore the 10-day provision of the bylaws has no application in this case; and Bailey's reinstatement and plaintiff in error's right to recover depend solely upon that provision of the by-laws permitting reinstatement after the 10-day period had expired and before the expiration of 3 months, which right is determined by section 66, subd. (b), of the by-laws above referred to. In this case, Bailey paid his arrears and dues after the 10-day period had expired. Upon receipt of said arrearages and dues on June 12, 1922, the defendant order did not have to accept same, and Bailey had no absolute right to make such payment after the expiration of the 10-day period without also furnishing a written statement and warranty of good health and nonuse of intoxicants as provided in section 66, subd. (b), of said bylaws.

This brings us to a well-settled rule in the law of insurance, which is as follows: When, under a policy of insurance, a forfeiture has been worked and the insurer has knowledge of the existence of facts which constitute the forfeiture of the certificate or policy, any unequivocal act done after the forfeiture has become absolute, which recognizes the continued existence of the certificate or policy, or which is wholly inconsistent with a forfeiture, will constitute a waiver thereof. See Calhoun v. The Maccabees (Tex. Com. App.) 241 S. W. 101, and cases therein cited.

The discussion of this question in that case by presiding Judge McClendon of the Commission of Appeals is thorough and wholly satisfactory. We do not repeat it, but merely make reference to said opinion and the authorities therein cited.

Under the rule announced above, in order to bring about a waiver of the forfeiture, three conditions of facts are necessary: First. The insurer must have knowledge...