Bolles v. Mut. Reserve Fund Life Ass'n

• Decision Date: 05 April 1906
• Citation: 77 N.E. 198,220 Ill. 400
• Parties: BOLLES et al. v. MUTUAL RESERVE FUND LIFE ASS'N.
• Court: Illinois Supreme Court

220 Ill. 400

77 N.E. 198

BOLLES et al.

v.MUTUAL RESERVE FUND LIFE ASS'N.

Supreme Court of Illinois.

Feb. 21, 1906.

Rehearing Denied April 5, 1906.

Appeal from Appellate Court, Third District.

Action by Chester H. Bolles and others against the Mutual Reserve Fund Life Association. From a judgment of the Appellate Court, reversing a judgment for plaintiffs, they appeal. Reversed.A. G. Murray, for appellants.

Kerrick & Bracken (George Burnham, Jr., of counsel), for appellee.

WILKIN, J.

At the March term, 1902, of the circuit court of Sangamon county appellants began an action of assumpsit against appellee to recover upon a benefit certificate Bolles. The case was tried in the circuit upon the life of one Hiram O. Bolles. The case was tried int he circuit court without a jury, and judgment rendered in favor of the plaintiffs for the amount named in the certificate ($5,000), less certain credits amounting to $2,216, and for costs of suit. The defendant appealed, and the Appellate Court reversed the judgment of the circuit court, and plaintiffs below now prosecute this appeal.

On February 5, 1884, the Covenant Mutual Benefit Association of Illinois issued its certificate or policy of insurance to Hiram O. Bolles, by the terms of which it agreed to levy an assessment upon the death of the said Bolles, and to pay to the beneficiaries in said certificate mentioned a sum not exceeding $5,000. The insured paid all assessments levied against him under the terms of the certificate until March 1, 1898, when assessment No. 149 was levied, payable March 31, 1898, which he refused to pay because it was unauthorized. He was thereupon dropped from the roll of membership and thereafter his certificate treated as lapsed and forfeited. On March 31, 1898, he and others filed their bill in equity against said company for relief, which bill resulted in a decree on April 9, 1900, declaring said assessment No. 149 null and void, and restoring the complainant Bolles and others to all their rights of membership in the association, upon the payment by them, on or before May 1, 1900, of the amount due from each. In the meantime, on December 28, 1899, while the suit in equity was pending, the association, the corporate name of which had been changed to ‘Covenant Mutual Life Association,’ entered into a contract with the Northwestern Life Assurance Company, by the terms of which the latter accepted as its members all of the members of the association who were in good standing on that date, except such as filed a written notice of his or her preference to be transferred to some other corporation, as provided in section 16 of the act to incorporate companies to do the business of life or accident insurance upon the assessment plan, etc., approved June 22, 1893, in force July 1, 1893. Hurd's Rev. St. 1903, p. 1109, c. 73. On April 26, 1900, one Stewart Goodrell, who had been named as trustee in the contract of said association, notified Bolles that the amount of $205.40 was due from him, and that upon the payment of that amount he would be restored to membership in said association, and that all future assessments would be payable to the Northwestern Life Assurance Company, and in pursuance of that notice Bolles paid said amount claimed to be due from him. On August 21, 1900, the last-named company entered into a transfer contract with appellee, whereby the former tendered to the latter each and all of its living members ‘who by its books and records were in good standing, except such as filed written notice of their preference to be transferred to some other corporation, in pursuance of said section 16,’ and the latter association accepted the members so tendered, but by the contract expressly disclaimed the assumption of any policy or certificate issued to any person who did not appear to be in good standing by the books and records of the NorthwesternLife Assurance Company. On September 1, 1900, at a meeting held for that purpose, said contract of transfer was ratified by two-thirds of the members of the North western Company, as provided in section 16, supra. Bolles was not notified of that meeting, and there is nothing in the record to show that he was present or in any way participated in it. He was not in good standing upon the books and records of the Northwestern Company at the date of that transfer, and his name did not appear upon its books, though he was, in fact, a member in good standing. No call for the payment of any premiums or assessments was ever made upon him by the appellee, and he neither paid nor tendered payment of any such assessments. He died on August 8, 1901, leaving the plaintiffs below as his beneficiaries under said certificate.

The trial court of its own motion, among others, held two propositions of law. The first reads as follows: ‘First. The court holds that the transfer and reinsurance of risks from the Covenant Mutual Life Association of Illinois to the Northwestern Life Assurance Company, and the transfer and reinsurance of risks from the Northwestern Life Assurance Company to the Mutual Reserve Fund Life Association, defendant herein, were effected and consummated under section 16 of the act of 1893 (Hurd's Rev. St. 1903, c. 73, par. 245), and that the intent and meaning of said statute is that such transfer and reinsurance shall include each and all of the members, certificate holders or policy holders of the transferring association or company who are in good standing in the transferring association or company or who hold valid certificates or policies therein at the time of such transfer, except such as shall, within ten days, file written notice of their preference to be transferred to some other corporation, as provided in such statute.’ The second proposition is to the effect that upon the approval of the contract of transfer by two-thirds of the members then in good standing in the transferring company, or who then hold valid certificates or policies in such company, ‘without further act become members, certificate holders, or policy holders, as the case may be, of and in the transferee association or company, and entitled to all the rights and benefits provided in such transfer and reinsurance contract, unless they have at their own request been transferred to some other association or corporation, as provided in said statute.’

There is and can be no serious controversy as to the fact that Bolles, the assured, was by the decree rendered upon his bill of March 31, 1898, and the payment by him of the amount therein found due from him to the company, restored to his membership in good standing in the first company, nor that he was entitled to be so treated in the first contract of transfer; it being made during the pendency of that bill. If, therefore, the Northwestern Company had performed its duty, he would have appeared upon its books and records as a member in good standing, and by the terms of the contract of transfer become a member of the appellee company. Nor do we agree with counsel for appellee that Bolles, under the terms of his certificate of membership and the evidence in this case, was bound to apprise appellee of his claim to membership in it, and pay or offer to pay it such dues and assessments as might be required of him. No requirements were made of him by appellee, and we are unable to see upon what principle it can be said that he was bound, in the absence of notice, to assert his membership in the appellee company. The theory of the opinion of the Appellate Court...