Bean v. Modern Woodmen of America

• Decision Date: 27 June 1938
• Parties: AMY N. BEAN, APPELLANT, v. MODERN WOODMEN OF AMERICA, RESPONDENT
• Court: Kansas Court of Appeals

122 S.W.2d 384

233 Mo.App. 368

AMY N. BEAN, APPELLANT, v. MODERN WOODMEN OF AMERICA, RESPONDENT

Court of Appeals of Missouri, Kansas City

June 27, 1938

Appeal from Jackson Circuit Court.--Hon. Darius A. Brown, Judge.

Judgment affirmed.

Milton Schwind and Allan M. Fisher for appellant.

(1) The policy sued on does not meet the requirements of the statute applicable to fraternal societies and hence defendant has available only defenses open to old line companies. (a) The policy does not show that losses are paid by assessments on those holding similar contracts. Secs. 5729, 6005, R. S. Mo 1929; Wilhelm v. Security Benefit Assn. (Mo. App.), 104 S.W.2d 1042, l. c. 1044; Murphy v. Brotherhood, etc. (Mo. App.), 199 S.W. 730, l. c. 731; Herzberg v Modern Brotherhood, etc., 110 Mo.App. 328, 85 S.W. 986 l. c. 987; McDonald v. Life Ins. Co., 154 Mo. 618, 55 S.W. 999; Keeton v. National Union (Mo. App.), 182 S.W. 798; Logan v. Fidelity Ins. Co., 146 Mo. 115, 47 S.W. 948; Wilson v. General Assembly, etc., Ben. Assn., 125 Mo.App. 597, 103 S.W. 109; Kroge v. Modern Brotherhood (Mo. App.), 105 S.W. 685, l. c. 687; Ragsdale v. Brotherhood (Mo. App.), 80 S.W.2d 272, l. c. 279; O'Neal v. Grand Lodge (Mo. App.), 261 S.W. 128, l. c. 131; Williams v. St. Louis Life Ins. Co., 189 Mo. 70, 87 S.W. 499, l. c. 502; Fowler v. Missouri Mut. Assn. (Mo. App.), 86 S.W.2d 946, l. c. 950; Andrus v. Business Men's Assn., 283 Mo. 442, 223 S.W. 70, l. c. 72; Aloe v. Fidelity Mutual, etc., 164 Mo. 675, 55 S.W. 993, 994, 995. (b) The policy contained no forfeiture clause and the insured was in good standing at the time of death. Gruwell v. National Union, 126 Mo.App. 496, 104 S.W. 884, l. c. 886; Insurance Co. v. Stathzm, 93 U.S. 24, 23 L.Ed. 789. (2) If the certificate is to be construed in connection with any by-laws, then the sole by-law is section 42, enacted in 1929. (a) Under the law applicable to insurance contracts the insured was warranted in believing that he had an old line policy with the incident of non-forfeiture except by an affirmative act with notice to him. Lewine v. Supreme Lodge, 99 S.W. 821, l. c. 823; Williams v. Insurance Co., supra; Gruwell v. National Union, supra. Defendant as an insurer must submit to a strict construction of its contract. Lewine v. Supreme Lodge (Mo. App.), 99 S.W. 821, l. c. 823. Under section 5729, R. S. Mo. 1929, the certificate is the sole evidence of the contract. Illinois Bankers Life Assn. v. Talley, 68 F.2d 4. (b) Defendant's section 60 is not a part of the contract with insured and cannot be basis for forfeiture under the rule of strict construction. Shadley v. Grand Lodge, 212 Mo.App. 653, 254 S.W. 363, l. c. 366. The terms "assessment" and "premium" are not interchangeable. Defendant's section 60 cannot be read into section 42. Barber v. Hartford Life Ins. Co., 279 Mo. 316, 214 S.W. 207, l. c. 210. (3) The defendant is limited to the single defense of automatic forfeiture, having waived other defenses. Carp v. Queen Ins. Co., 116 Mo.App. 528, 92 S.W. 1137, l. c. 1142; Roark v. City Trust, etc., 130 Mo.App. 401, 110 S.W. 1; 32 C. J. 1354, sec. 636; National Aid Life Ins. Co. v. Murphy (Tex.), 78 S.W.2d 223, l. c. 227; Farmers, etc., v. Ferguson (Kan.), 98 P. 231, l. c. 233. (4) The original application is not a part of the contract in suit. Smith v. Sickenger (Mo. App.), 202 S.W. 262, l. c. 263; Lingenfelder v. Wainwright, 103 Mo. 578, 15 S.W. 844, 847, 848.

George G. Perrin, George H. McDonald, Nelson C. Pratt and Adams, Adams & Adams for respondent.

(1) The contract of insurance sued on is written by a fraternal beneficiary society, is a fraternal beneficiary contract in nature, and is, therefore, not subject to construction as if an old-line policy. Secs. 5993, 5997, 5998, 6005, R. S. Mo. 1929; Lee v. Missouri State Life Ins. Co., 303 Mo. 492, 261 S.W. 83; Westerman v. Supreme Lodge, K. of P., 196 Mo. 670, 94 S.W. 470; Thomas v. Modern Woodmen of America, 218 Mo.App. 10, 260 S.W. 552; State ex rel. Thomas v. Trimble et al., 303 Mo. 266, 259 S.W. 1052; Modern Woodmen of America v. Tevis, 117 F. 369. (2) The contract in suit, which includes the certificate, by-laws, articles of association, and applications, provide for a forfeiture ipso facto in case of nonpayment of dues and assessments. (3) William J. Bean abandoned his membership in the respondent society. Jenkins et al. v. Talbot et al., 338 Ill. 441, 170 N.E. 735, 80 A. L. R. 638; 1 Cooley's Briefs on Insurance (2 Ed.), p. 68; Miller v. National Council of Knights and Ladies of Security et al., 68 Kan. 234; Thomas v. Maccabees, 85 Wash. 665, 149 P. 7; Lavin v. Grand Lodge, A. O. U. W., 112 Mo.App. 1, 86 S.W. 600; Bange v. Supreme Council, 179 Mo.App. 21, 161 S.W. 652; Agnes Easter v. Brotherhood of American Yeomen, 172 Mo.App. 292, 157 S.W. 992; Lee v. Missouri State Life Ins. Co., 303 Mo. 492, 261 S.W. 83.

OPINION

REYNOLDS, J.

This is an appeal from the Circuit Court of Jackson County at Kansas City.

The action is upon a certificate of insurance issued by the defendant for $ 3000 upon the life of William J. Bean, payable to the plaintiff as beneficiary therein upon his death, upon due notice of his death to the defendant.

The insured, William J. Bean, died on March 5, 1936. The certificate sued on was introduced in evidence upon the trial by the plaintiff. It appears to have been issued upon the application of the insured therein on November 1, 1929, in exchange for a certificate or policy which had prior thereto been issued by the defendant to the insured in the same amount on February 18, 1898, which had been kept in force by the insured to the date of the exchange.

The certificate sued on is as follows:

"No. E 72240 Amount $ 3000.00

Ordinary Whole Life--Form A

"Age 62 Rate $ 15.00

"BENEFIT CERTIFICATE

"MODERN WOODMEN

"OF AMERICA

"A Fraternal Beneficiary Society

"Incorporated under the Laws of Illinois

"Hereby issues this certificate to William J. Bean, a member of Camp No. 120 of Modern Woodmen of America, located at Omaha, State of Nebraska, and upon receipt of satisfactory proof of the death of said member while in good standing, this Society will pay $ 3000 to AMY N. BEAN the beneficiary or beneficiaries under this certificate, related to said member as WIFE; or

. . .

"This certificate is issued in consideration of the warranties and agreements contained in the application therefor and in further consideration that the member shall make payments to the Society of the sums required by the By-Laws of the Society on or before the last day of each and every calendar month in accordance with said By-Laws.

"This certificate is issued and accepted with the express agreement that the provisions and conditions contained on this and the succeeding pages of this Benefit certificate and in any authenticated riders attached hereto, shall form a part of this contract as fully as if recited over the signatures hereto affixed.

"In Witness Whereof, the said Modern Woodmen of America has, by its Head Consul and Head Clerk, signed, and caused the corporate seal of said corporation to be affixed to this certificate, at the City of Rock Island, in the State of Illinois, this 1st day of November, 1929."

Appearing at the foot of the certificate is the agreement of the insured to subscribe to all of the conditions therein contained and referred to and appended thereto. Among the provisions appearing on the reverse side of the front page of the certificate are the following: The Modern Woodmen of America is a fraternal beneficiary society. The contract between the society and the insured consists of (1) the Articles of Association of the society, (2) the benefit certificate, (3) the application for membership signed by the member, and (4) the by-laws of the society, with all present and subsequent amendments to each thereof. The application for beneficial membership in the society made by the insured, a copy of which was printed thereon or was thereto attached and in either case made a part thereof, is held to be a strict warranty and to form the only basis of the liability of the society to such member and to his beneficiary or beneficiaries, the same as if fully set forth in the benefit certificate; and, if said application be not literally true in each and every part thereof, then the benefit certificate is and shall be, as to said member, his beneficiary or beneficiaries, absolutely null and void.

It was stipulated between the parties that the defendant was a fraternal beneficiary association incorporated under the laws of the State of Illinois, duly authorized to do business in the State of Missouri, as such, and that it was a fraternal beneficiary association as defined by the laws of each of said States.

The certificate further provides for the payment to the defendant each month of the sum of $ 15 for the benefit fund and $ .45 for the general fund, making a total payment of $ 15.45 per month.

It is admitted that the insured, William J. Bean, died on March 5, 1936, and that he failed to pay the assessments and dues levied on his certificate due August 1, 1930, and that, on September 1, 1930, he was suspended by the defendant for the nonpayment of such August assessment and dues and that he never thereafter paid any other dues and assessments.

The plaintiff introduced in evidence an official letter from the defendant upon notice of the insured's death, in which it denied liability for the reason that the insured had allowed his membership to lapse on September 1, 1930, and had made no payments thereafter.

The plaintiff further introduced in evidence the articles of the association and by-laws of the defendant in printed, book form, entitled "Revision of 1929," and rested her case.

The defendant thereupon...