Baker v. Sovereign Camp, W. O. W.
| Decision Date | 02 May 1938 |
| Parties | RACHEL V. D. BAKER, APPELLANT, v. SOVEREIGN CAMP WOODMEN OF THE WORLD, RESPONDENT |
| Court | Kansas Court of Appeals |
Appeal from the Circuit Court of Clinton County.--Hon. R. B Bridgemen, Judge.
Judgment reversed and cause remanded. (with directions).
Elliott & Crouse and E. H. Gamble for appellant.
Rainey T. Wells, Charles F. Keller and Harding, Murphy & Tucker for respondent.
This is a suit on a life insurance policy. The case was tried before the court without the aid of a jury, resulting in a judgment in favor of defendant. Plaintiff has appealed.
The facts show that one W. C. Baker, husband of the plaintiff, desiring to become a member of the Local Lodge of the Woodmen of the World at Jerome, Arizona, on December 16th, 1896, made application to the defendant, a fraternal society organized under the laws of Nebraska, for a policy or certificate of life insurance; that on December 23rd, 1896, defendant issued a policy (described therein as a beneficiary certificate) to him in the sum of $ 2000 and $ 100 for the placing of a marker at insured's grave; that his brother, George Baker, was made the beneficiary therein. The policy provided that it was issued subject to all of the conditions on the back thereof and all of the conditions named in the Constitution and Laws of the Fraternity and was liable to forfeiture should insured not comply with said conditions and constitution, laws and rules of defendant that were, at that time, in existence or might thereafter be adopted by it. On the back of the certificate insured expressly agreed to pay all assessments and dues that might be levied during the time that he might remain a member of the Woodmen of the World.
The constitution and by-laws of the defendant at that time provided that should the insured desire at any time to reduce the amount of his certificate he should surrender the certificate and a new one would be issued in a reduced amount. They also provided that insured could change his beneficiary at any time. This provision remained in defendant's by-laws continuously during the whole time that insured lived. The policy had printed upon it the words "Payments to cease after 30 years." This was placed upon the policy pursuant to section 82 of the by-laws then in force, as amended. On November 2nd, 1897, defendant became licensed in this State as a foreign fraternal beneficiary association and has continued as such. On March 23rd, 1899, section 82 of the by-laws was repealed by the omission of said section from them. Notice of this repeal was given the members by defendant's official publication. On December 12, 1901, insured had moved to Missouri and become a member of the Denver Camp. He applied to the defendant for a change in his beneficiary from his brother to his wife, plaintiff herein and, on the last mentioned date, the company issued a rider which was attached to the policy, showing the change in the beneficiary, as requested by insured.
On the 29th day of December, 1916, insured made application to defendant for a "duplicate" certificate, setting forth in the application that his certificate had been placed in a bank which had been robbed and burned and the policy was thereby lost or destroyed.
On January 9, 1917, defendant issued a new certificate in lieu of the original. Insured accepted, in writing, this certificate which will be hereinafter more fully described.
Pursuant to changes in the by-laws of the defendant, the assessment on insured's policy was increased in September, 1899, from 95 cents per month to $ 1.05 per month, and in September, 1901, from $ 1.05 per month to $ 1.40 per month, and in September, 1915, from $ 1.40 per month to $ 1.70 per month and in October, 1917, from $ 1.70 per month to $ 1.80 per month. Insured paid all of these amounts, plus the local camp dues, and paid said sum of $ 1.80 per month to the month of March, 1931, and from the month of March, 1931, to the month of October, 1931, both inclusive, he paid $ 3.75 per month. All in addition to the local camp dues. He paid no further assessments after this and died on August 31, 1932.
In January, 1919, defendant passed a by-law reciting that the contributions of its members had not been adequate to carry their insurance and adopted a so-called "Plan of apportionment and readjustment." Under this plan each member holding a "combined benefit certificate" was given an option to pay a higher monthly assessment or to continue paying $ 1.80 per month and suffer a lien on his certificate. Insured continued paying $ 1.80 per month and defendant charged his certificate with a lien of $ 340.00. On March 1, 1931, defendant had charged against the certificate said amount plus interest at the rate of 5 per cent per annum, amounting to $ 245.39, or a total of $ 585.39.
On March 30, 1931, insured applied for an exchange of the certificate then held by him for another called an "Equalized Certificate." In pursuance to this application defendant issued to him another certificate dated March 1, 1931, payable to the plaintiff, in the sum of $ 1415.00, being $ 2000.00 less said lien and accumulated compound interest thereon, or $ 585.00.
The new certificate provided for an assessment at the rate of $ 3.75 per month. As before stated, insured paid this amount, plus the local camp dues, from and including March, 1931, to and including October, 1931, when he ceased payments. By making no further payments (if he was legally liable to make them) he became, under the laws of the defendant, automatically suspended on December 31, 1931, and remained so until his death.
The certificate issued in March, 1931, acknowledged the amount and validity of the lien against the old certificate and insured cancelled and surrendered the latter on condition of the issuance of the new certificate, providing for reserve, cash value, loan value, paid-up and extended insurance.
On September 18, 1933, the Probate Court of Buchanan County, in which county insured died, ordered that no letters of administration be issued upon his estate and that plaintiff be authorized to collect, sue for and retain all of the benefits belonging to his estate, in the same manner and with the same effect as if she had been appointed and qualified as executrix thereof.
The suit is in two counts. The first count is to recover the sum of $ 2000 on the policy issued by defendant on December 23, 1896, with interest from September 5, 1932. The second count is to recover the amount of the premiums paid by insured to defendant after December 23, 1926, with interest to October 23, 1931.
The answer pleaded that the contract consisted of the policy, the application therefor and the by-laws of the defendant in force on December 23, 1896, and thereafter adopted; that the provision of the policy that it should become paid up after 30 years was null and void for two reasons: (1) Because section 82 of the by-laws, under which the 30 year clause was inserted, was repealed in 1899 and thereby the clause was wiped out: (2) Because, under Art. III of defendant's corporate charter and under chapter 16, sections 195-206 inclusive of the Nebraska Statutes of 1899, defendant had no power to enter into the 30 year paid-up provision of insured's policy, nor to enact section 82 of its by-laws, and that such provision and by-laws were ultra vires and void; that the question whether said policy provision and by-law is void was resolved adversely to plaintiff by the Nebraska Supreme Court in Haner v. W. O. W. (Nebr.), 168 N.W. 189, and Trapp v. W. O. W. (Nebr.), 168 N.W. 191, by which decisions the courts of Missouri are bound under the full faith and credit clause of the Federal Constitution.
The answer then sets up the amounts of the premiums assessed and the amount paid by insured; that in 1919 defendant's rates were readjusted so as to require insured to either pay $ 6.39 per month or subject his insurance to a lien; that insured elected to submit to the lien and continued to pay the old rate, and that the validity of the readjustment has been adjudicated by the Nebraska Court in Fowler v. W. O. W., 183 N.W. 550, by which decision the courts of Missouri are bound; that on March 1, 1931, insured surrendered his certificate in exchange for a new one in the sum of $ 1415 ($ 585 less than the amount of the surrendered policy, the difference being on account of the lien with interest); that the new policy called for an assessment of $ 3.75 per month, which insured paid until October, 1931, but not thereafter; that plaintiff is not entitled to recover under the old certificate because it was surrendered and exchanged and she is not entitled to recover under the new certificate because of default in the payment of the assessments thereon and the forfeiture of the policy prior to the death of the insured.
The reply pleads that insured paid all dues, premiums and assessments on the first policy which defendant has retained, and is thereby estopped from asserting the defense of ultra vires in issuing the policy with the 30 year "payments to cease" clause; that the policy became paid up on December 23, 1936, and there was no consideration for its exchange for the one issued to insured in 1931.
Plaintiff insists that the court erred in rendering judgment for the defendant and urges that the judgment should have been in favor of plaintiff. The laws of Arizona were not pleaded and, consequently, the case must be decided as though the policies or certificates were issued in this State. [Lyons v. Met. St. Ry. Co., 253 Mo. 143, 161 S.W. 726.] This is conceded by the parties hereto.
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