Caywood v. The Supreme Lodge, Knights And Ladies of Honor

• Decision Date: 15 December 1908
• Docket Number: 21,269
• Citation: 86 N.E. 482,171 Ind. 410
• Parties: Caywood v. The Supreme Lodge, Knights and Ladies of Honor
• Court: Indiana Supreme Court

86 N.E. 482

171 Ind. 410

Caywood v. The Supreme Lodge, Knights and Ladies of Honor

No. 21,269

Supreme Court of Indiana

December 15, 1908

From Hancock Circuit Court; Edward W. Felt, Judge.

Action by Ellen M. Caywood against The Supreme Lodge, Knights and Ladies of Honor. From a judgment for defendant, plaintiff appeals. Transferred from Appellate Court (see 41 Ind.App 639) under § 1394 Burns 1908, cl. 1, Acts 1901, p. 565 § 10.

Affirmed.

George Young, John M. Bailey and William Ward Cook, for appellant.

William A. Hough and Taylor, Woods & Willson, for appellee.

OPINION

Monks, J.

This action was brought by appellant on a benefit certificate issued by appellee, a mutual benefit association, to appellant's son, in which she was named as the beneficiary. The amended complaint is in two paragraphs. A demurrer for want of facts was sustained to the complaint, and judgment rendered on demurrer against appellant.

The errors assigned call in question the action of the court in sustaining said demurrer.

The benefit certificate sued on contains the following provision:

"No suit shall be commenced against the supreme lodge after one year from the date of the death of the member."

It appears from each paragraph of the complaint that the member to whom the certificate was issued died in September, 1902. This action was commenced June 30, 1905, more than two years after the death of the member named in said certificate. Appellant insists that said provision limiting the time in which suit must be commenced is void, citing Eagle Ins. Co. v. LaFayette Ins. Co. (1857), 9 Ind. 443. The case cited followed French, Strong & Fine v. LaFayette Ins. Co. (1853), 5 McLean (U.S.) 461, Fed. Cas. No. 5,102, which last-named case was disapproved by the Supreme Court of the United States in Riddlesbarger v. Hartford Ins. Co. (1868), 7 Wall. (U.S.) 386, 19 L.Ed. 257. This court in Insurance Co. of North America v. Brim (1887), 111 Ind. 281, 12 N.E. 315, held that such a provision was not void, citing Riddlesbarger v. Hartford Ins. Co., supra, and thereby overruled the holding in Eagle Ins. Co. v. LaFayette Ins. Co., supra, that such a provision was invalid.

It is settled by the great weight of authorities that a provision in an insurance policy limiting the time in which suit may be brought thereon to a period less than that fixed by statute of limitations is binding, unless it contravenes a statute. Riddlesbarger v. Hartford Ins. Co., supra, and cases cited; Lewis v. Metropolitan Life Ins. Co. (1902), 180 Mass. 317, 62 N.E. 369, and cases cited; Sullivan v. Prudential Ins. Co. (1902), 172 N.Y. 482, 65 N.E. 268; Fey v. Independent Order, etc. (1904), 120 Wis. 358, 98 N.W. 206; Mead v. Phoenix Ins. Co. (1904), 68 Kan. 432, 75 P. 475, 64 L.R.A. 79, 104 Am. St. 412, and cases cited; McFarland v. Railway Officials, etc., Assn. (1894), 5 Wyo. 126, 38 P. 347, 677, 27 L.R.A. 48, 63 Am. St. 29; Insurance Co. of North America v. Brim, supra; 25 Cyc., 910; 29 Cyc., 216; 19 Am. and Eng. Ency. Law (2d ed.), 103, 104; 4 Cooley, Briefs on Ins., 3964-3967; 2 Bacon, Benefit Soc. (3d ed.), § 443; Niblack, Mut. Ben. Soc., §§ 370, 371; 2 May, Insurance (4th ed.), § 478; Kerr, Insurance, p. 423.

We have, however, in this State a statute in force since 1865 (§ 4803 Burns 1908, § 3770 R. S. 1881) which this court has held renders void any provision in the policy of a foreign insurance company doing business in this State, limiting the time within which suit can be brought thereon to less than three years. Insurance Co. of North America v. Brim, supra.

It does not appear from either paragraph of the amended complaint that appellee is a foreign corporation. There is nothing therefore in the complaint showing that appellant is entitled to the benefit of § 4803, supra. It is well settled that, to entitle appellant to the benefit of said section she must allege and prove facts which will bring the certificate sued on within its provisions. Weir v. State, ex rel. (1903), 161 Ind. 435, 438, 68 N.E. 1023, and cases cited; Indianapolis, etc., Transit Co. v. Foreman (1904), 162 Ind. 85, 96, 69 N.E. 669, 102 Am. St. 185, and cases cited.

A stipulation limiting the time within which an action may be brought on an insurance policy or certificate, being for the benefit of the company, may be waived by it. 4 Cooley, Briefs on Ins., 3989-4000; 2 Bacon, Benefit Soc. (3d ed.), § 445; Grant v. Lexington, etc., Ins. Co. (1854), 5 Ind. 23, 61 Am. Dec. 74; Thompson v. Phenix Ins. Co. (1890), 136 U.S. 287, 297-299, 10 S.Ct. 1019, 34 L.Ed. 408; Lynchburg Cotton Mill Co. v. Travelers' Ins. Co. (1906), 149 F. 954, 79 C.C.A. 464, 9 L.R.A. (N.S.) 654, and note.

Appellant claims that, if said clause limiting the time within which suit must be brought on said certificate is valid, the allegations of the first paragraph are sufficient to prevent appellee from taking advantage thereof. It is not necessary for us to determine this question, because said paragraph is insufficient for other reasons.

It appears from said first paragraph that the certificate was issued in consideration of the premium paid and the payment of $ 1.05 each month during the life of John C. Caywood; that the monthly assessment of $ 1.05 for August, 1902, was not paid, and on the 30th of said month appellee forfeited said certificate by the nonpayment of said assessment. Appellant attempts to avoid the effect of the failure to pay said August assessment of $ 1.05, and said forfeiture of the certificate on that account, for the reason that during the month of August appellee owed said Caywood, for services rendered by him for appellee, "the sum of $ 2, which sum the defendant had the right to apply on the payment of the August assessment of $ 1.05, and should have applied on the August assessment levied on said policy, but wholly failed to do so; that said defendant refused to apply said sum of $ 2 on said payment, and on August 30, 1902, forfeited said policy and still retained, and has ever since retained, said $ 2; that the September assessment of $ 1.05 was tendered to said defendant and was refused by it, and said amount was paid into court for the benefit and use of defendant."

It has been held that a life insurance policy cannot be forfeited for the nonpayment of a premium or assessment when the company has in its possession dividends, declared under said policy, sufficient to pay the same, which it has the right to apply to such payment. Franklin Life Ins. Co. v. Wallace (1884), 93 Ind. 7; Girard Life Ins., etc., Co. v. Mutual Life Ins. Co. (1881), 97 Pa. 15; Mutual Life Ins. Co. v. Girard Life Ins., etc., Co. (1882), 100 Pa. 172; 3 Cooley, Briefs on Ins., 2324, 2325.

The mere allegation that appellee, during the month of August owed said Caywood $ 2 for services rendered by him for appellee, did not show any right or duty on the part of appellee to apply the same or any part thereof to the payment of said August assessment. Willcuts v. Northwestern, etc., Ins. Co. (1882), 81 Ind. 300; Butler v. American, etc., Life Ins. Co. (1877), 42 N.Y. Super. Ct. 342; Pister v. Keystone Mut. Benefit Assn. (1896), 3 Pa.Super. 50, 57-59; Smith v. Penn Mut. Life Ins. Co. (1882), 11 Weekly Notes of Cas. (Pa.) 295; 21 Am. and Eng. Ency. Law (2d ed.), 291; 3 Cooley, Briefs on Ins., 2324, 2325. See, also, Leffingwell v. Grand Lodge, etc. (1892), 86 Iowa 279, 53 N.W. 243; Petrie v. Mutual Benefit Life Ins. Co. (1904), 92 Minn. 489, 100 N.W. 236; Irvin v. Rushville, etc., Tel. Co. (1903), 161 Ind. 524, 69 N.E. 258, and cases cited. It is said in 21 Am. and Eng. Ency. Law (2d ed.), 291: "Where the insured is in the employ of the company the fact that there were wages due him at the time of his default in the payment of an assessment, sufficient to pay the assessment, will not prevent a forfeiture for nonpayment, as the company is under no duty to apply such wages to the payment of the assessment." And this was the theory of said paragraph, for it averred that "the defendant had the right to apply said $ 2 on the payment of the August assessment of $ 1.05, and should have applied it," and "that the defendant refused to apply said sum of $ 2 on said payment."

It is not sufficient, however, to allege that it was the right or duty of the appellee to apply said $ 2, or any part thereof to the payment of the August assessment, the same being the mere conclusion of the pleader, but the facts from which such right or duty arises must be clearly and positively alleged. Chicago, etc., R. Co. v. Barker (1908), 169 Ind. 670, 681, 83 N.E. 369; Chicago, etc., R. Co. v. Lain (1908), 170 Ind. 84, 83 N.E. 632, and cases cited; Chicago, etc., R. Co. v. McCandish (1907), 167 Ind. 648, 651-653, 79 N.E. 903, and cases cited; City of Buffalo v. Holloway (1852), 7 N.Y. 493, 57 Am. Dec. 550, 552 and note page 554; Wabash R. Co. v. Hassett (1908), 170 Ind. 370, 83 N.E. 705, and authorities cited; Southern Ind. R. Co. v. Fine (1904), 163 Ind. 617, 621, 72 N.E. 589; Pittsburgh, etc., R. Co. v. Lightheiser...