Columbian Mut. Life Ins. Co. v. Eaves

• Decision Date: 09 January 1939
• Docket Number: 33358
• Citation: 185 So. 557,185 Miss. 127
• Court: Mississippi Supreme Court
• Parties: COLUMBIAN MUT. LIFE INS. CO. v. EAVES

185 So. 557

185 Miss. 127

COLUMBIAN MUT. LIFE INS. CO. v. EAVES

No. 33358

Supreme Court of Mississippi, Division A

January 9, 1939

Suggestion Of Error Overruled March 6, 1939.

APPEAL from the circuit court of Clarke county HON. ARTHUR G. BUSBY Judge.

Action by Mrs. Maggie Eaves against the Columbian Mutual Life Insurance Company, on a life policy. Judgment for plaintiff and defendant appeals. Reversed, and judgment rendered for defendant.

Reversed and judgment here for appellant.

Stevens & Stevens, of Jackson, for appellant.

There is no liability in this case, the motion to exclude the plaintiff's testimony should have been sustained and the peremptory instruction requested at the close of the evidence should have been granted.

The plaintiff has not met the burden of proof and utterly failed to make out any legal or equitable case.

Alton v. Most Worshipful St. John's Grand Lodge, 135 So. 679; Brotherhood of Railroad Trainmen v. Bridges, 164 Miss. 356, 144 So. 554; Clement v. Knights of Maccabees of the World, 113 Miss. 392, 74 So. 287.

The defendant is a fraternal benefit society and as such not only the certificate sued on but the constitution is a part of the contract.

Barrows v. Mutual Life Ins. Co., 151 F. 461; Mims case, 241 U.S. 574; Miller v. National Council, etc., 76 P. 799, 69 Kan. 234; Peterson v. Manhattan Life Ins. Co., 244 Ill. 329; Reynolds v. Royal Arcanum, 7 L. R. A. (N. S.) 1154, 78 N.E. 129, 192 Mass. 150; Thomas case, 149 P. 7, 85 Wash. 665, L. R. A. 1916A, 750; Odd Fellows Benefit Assn. v. Smith, 58 So. 100; National Council of Knights and Ladies of Security, 100 So. 153; Columbian Mutual Life v. Harrington, 139 Miss. 826, 104 So. 297; Locomotive Engineers Mutual Life & Acc. Ins. Assn. v. Hughes, 77 So. 252.

There was no such cash surrender or loan values to insurance certificate.

Independent Order of Sons and Daughters of Jacob of America v. Moncrief, 96 Miss. 419, 50 So. 558; Mixon v. Sovereign Camp, W. O. W., 155 Miss. 841, 125 So. 113.

No necessity of notice where the provisions of the constitution and by-laws are self-operating.

8 A. L. R. 398, 400.

Hal F. Case, of Quitman, for appellee.

Appellee's husband, Adie David Eaves, was insured by appellant under a policy which provided in the event of his death his beneficiary, appellee, would be paid $ 1000, or in event of his insanity he would be paid one-tenth of $ 1000 annually until the $ 1000 was so paid. He kept the premiums paid on the policy for a long number of years and until December 1932, when he paid no further premiums. The appellant knew of his insanity in December 1932 but nothing was done about it by it or any one on behalf of insured except that appellee testified that she told the local collector about his condition and wrote the appellant.

In November 1936 appellant was requested by the guardian of Adie David Eaves to furnish the required forms for making proof of claim for this disability. Appellant declined to furnish the forms and denied liability on the policy claiming the policy had lapsed for non-payment of premiums. Thereafter Adie David Eaves died and the appellee, the beneficiary under the policy, sued appellant for the amount of the policy.

Appellee bases her right to recovery in the case at bar on the above state of facts and upon the principle of law that where an insurer has in its hands funds belonging to the insured it is the duty of the insurer to apply such funds to the payment of any premiums or assessments which may be due under the policy and that an insurer cannot escape liability by refusing to so apply such funds and claiming forfeiture of the policy because of nonpayment of premiums or assessments.

It was clearly the duty of the appellant under its constitution and laws to furnish through its officers the necessary proofs for making claim for Adie David Eaves' disability. It failed so to do. And afterwards when it was expressly called on by the guardian of Adie David Eaves it refused to do so and denied liability under the policy, claiming that it had been forfeited.

Where an insurance company has in its hands funds belonging to the insured, it is the duty of the company, under the law, to apply such funds to the payment of any premiums or assessments which may be due at the time by the insured, and the insurance company cannot escape liability by refusing to so apply such funds. Courts do not favor forfeitures, when to do so would be against equity and good conscience.

National Life Ins. Co. v. Sparrow, 151 Miss. 387, 118 So. 195; Universal Life Ins. Co. v. Ford, 180 So. 823; Aetna Life Ins. Co. v. Roberts, 164 So. 311.

OPINION

McGowen, J.

The appellee, Mrs. Maggie Eaves, brought an action at law on a life insurance policy issued by The Eminent Household of Columbian Woodmen, a fraternal insurance society, for $ 1, 000, written on the life of Adie David Eaves. The declaration alleged the death of the insured on the 26th day of March, 1937, and in general terms the performance of all conditions required of the beneficiary and the insured under the contract. The appellant plead the general issue and gave notice of affirmative matter under the general issue to the effect that the policy sued on lapsed for failure of the insured to pay premiums for December, 1932, and that insured made application for reinstatement on February 10, 1933, but failed to furnish a certificate of insurability. The application was filed as an exhibit and set up the provisions of the constitution and by-laws of the order as to lapses and reinstatements.

To this notice a counter notice was filed by the appellee in which she set up that the policy carried a provision for payment of disability benefits in lieu of all other benefits upon the insured's becoming incurably insane, that the insured became insane prior to December, 1932, while the policy was in force, was confined to an asylum, never recovered from his insanity, and died in March, 1937, that the insurer had notice in December, 1932, of the insanity of the insured, who was unable to transact his own business, that appellee denied that an application had been made for reinstatement of the policy, and that on November 10, 1936, the insurer was notified of the insanity of the insured by the attorney, representing the appellee, who was at that time the guardian of the insured, and who requested blanks upon which to make proof of the disability.

Appellant made a motion to strike the counter notice from the files, on the ground mainly of departure in pleading from the original declaration, which was overruled. Thereupon the insurer, appellant, filed a response to the counter notice in which it alleged in substance that the insured had not paid the monthly dues on December 1, 1932, nor had he paid any dues at any time subsequent thereto, that under the constitution in order to be entitled to benefits the insured must pay the monthly instalments, and it denied that the insured was insane prior to December, 1932, and denied that the appellant had any notice or knowledge of that insanity.

The evidence was heard and the jury returned a verdict for the appellee in the sum of $ 919.40, evidently deducting the instalment payment of $ 1.55 each month from December 1, 1932, until the date of the death of the insured, with interest, although no instructions were given by the court as to the deduction.

The contract of insurance issued by The Eminent Household of Columbian Woodmen had been assumed by the Columbian Mutual Life Insurance Company, without change of liability thereunder, as a fraternal insurance policy by charter and by contract in accordance with the requirements of Article 14, Chapter 127, Code of 1930, section 5231 et seq., and no point is made here but that the insured, as a member of the fraternal order, was subject to the constitution and by-laws thereof, which latter were a part of the policy.

The evidence is undisputed that from and including December 1 1932, to the date of his death, the insured never paid any monthly dues as required, nor did anyone pay them for him. It is undisputed that after that time he was not subject...