Columbian Mut. Life Ins. Co. v. Craft

• Decision Date: 12 December 1938
• Docket Number: 33373
• Court: Mississippi Supreme Court
• Parties: COLUMBIAN MUT. LIFE INS. CO. v. CRAFT

185 So. 225

186 Miss. 234

COLUMBIAN MUT. LIFE INS. CO. v. CRAFT

No. 33373

Supreme Court of Mississippi, Division A

December 12, 1938

Suggestion Of Error Overruled March 20, 1939.

APPEAL from the circuit court of Smith county HON. E. M. LANE Judge.

Action by John C. Craft against the Columbian Mutual Life Insurance Company for total disability benefits under combination life health and accident policy. From a judgment for plaintiff defendant appeals. Affirmed in part and in part reversed, and remanded.

Affirmed in part and in part reversed, and remanded.

Stevens & Stevens, and George R. Nobles, all of Jackson, for appellant.

The motion for a directed verdict at the conclusion of all the testimony was erroneously overruled and the peremptory charge, same being Instruction No. 1, should have been granted and was erroneously refused.

There is no liability in this case and the peremptory instruction asked for should have been granted, because: first, it was pleaded in this cause and the proof shows that plaintiff's entire cause of action was and is barred by the statute of limitations; secondly, there is no liability in this case on the law and the facts even though the cause of action might have been instituted within six years from the time it accrued.

Jones v. Rogers, 85 Miss. 802, 38 So. 742; Young v. Cook, 30 Miss. 320; First National Bank v. Johnson, 177 Miss. 634, 171 So. 11; Pilot Life Ins. Co. v. Wade, 153 Miss. 874, 121 So. 844; New York Life Ins. Co. v. Gill, 182 So. 109.

There were no fraudulent representations in this case, but even if there had been it must have been made under such circumstances and be of such nature that a reasonably prudent person would act thereon. The plaintiff must exercise reasonable diligence to discover the fraud or show that he could not have with reasonable diligence discovered it sooner.

New York Life Ins. Co. v. Gill, 182 So. 109; Pilot Life Ins. Co. v. Wade, 153 Miss. 874; Section 2312, Code of 1930; Fleming v. Grafton, 54 Miss. 79; Young v. Cook, 30 Miss. 320.

The burden of proof was upon the plaintiff to show that he was a member in good standing at the time he undertook to make claim for disability benefits. It is admitted that he paid no monthly dues for June, 1927, or any month thereafter.

Mr. Craft permitted his membership to lapse and he had no further interest of any kind after June 10, 1927. We might concede for argument that he became disabled prior to June 10, 1927, but this would not relieve him of his obligation to pay his monthly dues. If he had been utterly helpless or even insane, he would not be excused.

New York Life Ins. Co. v. Alexander, 122 Miss. 813, 85 So. 93; Berry v. Lamar Life Ins. Co., 163 Miss. 462, 142 So. 445, 165 Miss. 405, 145 So. 887; Clement v. Knights of Maccabees of the World, 113 Miss. 392, 74 So. 287; Alton v. Most Worshipful St. John's Grand Lodge, 135 So. 679; Brotherhood of Railroad Trainmen v. Bridges, 164 Miss. 356, 144 So. 554; Sovereign Camp, W. O. W. v. Hynde, 99 So. 259; Odd Fellows v. Smith, 101 Miss. 332, 58 So. 100; Sovereign Camp, W. O. W. v. Muse, 163 So. 682; Sovereign Camp W. O. W. v. Williamson, 164 So. 47; Bruton v. Brotherhood of Locomotive Firemen & Engineers, 176 Miss 224, 167 So. 423; Sovereign Camp, W. O. W. v. McClure, 176 Miss. 536, 168 So. 611; Afro-American Sons & Daughters v. Williams, 176 So. 725; Mixon v. Sovereign Camp W. O. W., 155 Miss. 841, 125 So. 113.

In Mississippi, we have Chapter 206, Laws of 1916, brought forward as a separate article in the present code, regulating fraternal benefit societies. Our court has several times construed this act and pointed out that it is all embrasive and exclusive, and any other provisions of the code, relating to insurance companies, do not apply. Such societies have no capital stock, are organized solely for the benefit of its members and not for profit. It is governed and managed by its membership and there is a representative form of government. To carry out the underlying principles of mutuality, all members agree to be bound by the laws of the society. Ordinary life insurance companies are commercial corporations, engaged in business for profit. The policyholder is purely in the status of one insured. In a fraternal society, there is the underlying principle of mutuality. The differentiation is pointed out in many cases.

Peterson v. Manhattan Life Ins. Co., 244 Ill. 329; Barrows v. Mutual Life Ins. Co., 151 F. 461; Supreme Lodge, etc. v. Mims, 241 U.S. 574; Thomas v. Knights of Maccabees, 149 P. 7, 85 Wash. 665, L.R.A. 1916A 750; Miller v. National Council, etc., 76 P. 799, 69 Kan. 234; Reynolds v. Royal Arcanum, 7 L.R.A. (N.S.) 1154, 78 N.E. 129, 192. Mass. 150; Clarkson v. Supreme Lodge, 82 S.E. 1043, 99 S.C. 134; DeGraw v. I. O. O. F., 182 Mich. 366, 148 N.W. 703; Holt v. Supreme Lodge, 235 F. 885; Newman v. Supreme Lodge, 70 So. 241, 110 Miss. 371; Supreme Council v. Green, 237 U.S. 531, L.R.A. 1916A 771; Wineland v. K. O. T. M., 148 Mich. 608, 114 N.W. 696; Supreme Lodge K. of H. v. Bieler, 105 N.E. 244, 53 Ind.App. 550; Fullenweider v. Royal Leage, 180 Ill. 621, 54 N.E. 485; Champion v. Hannahan, 138 Ill.App. 387; Mock v. Supreme Council R. A., 121 A.D. 474, 106 N.Y.S. 155; Messer v. Grand Lodge, 180 Mass. 321, 62 N.E. 252; Miller v. National Council K. & L. of S., 69 Kan. 234, 76 P. 830; Supreme Ruling Mystic Circle v. Ericson, 131 S.W. 92; Williams v. Supreme Council C. M. B. A., 152 Mich. 1, 115 N.W. 1060; Conner v. Golden Cross, 117 Tenn. 549, 97 S.W. 306; Shepperd v. Banker's Union, 77 Neb. 85, 108 N.W. 188; Supreme Lodge K. of P. v. Knight, 117 Ind. 489, 3 L.R.A. 409, 20, N. E. 279; Woodmen of the World v. Woods, 34 Colo. 1, 81 P. 261; Barbot v. Mut. Res., etc., Assn., 100 Ga. 681, 28 S.E. 498; Mutual Reserve Fund Life Assn. v. Taylor, 99 Va. 208, 37 S.E. 854; Richmond v. Supreme Lodge, etc., 100 Mo.App. 8; Haydel v. Mutual Reserve Fund Life Assn., 98 F. 220, 104 F. 718.

Indeed by the terms of the last paragraph of Section 12 of the Fraternal Benefit Societies Act of 1916 it is provided that every such society shall have the power to make a constitution and by-laws for the government of the society and the admission of its members, the management of its affairs and the fixing and readjusting of the rates of contribution of its members from time to time, and shall have the power to change, alter, add to or amend such constitution and by-laws, and shall have such other powers as are necessary and incidental to carry into effect the objects and purposes of the society.

Odd Fellows Benefit Assn. v. Smith, 58 So. 100; National Council of Knights & Ladies of Security v. Smiley, 100 So. 153; Locomotive Engineers Mutual Life & Acc. Ins. Assn. v. Hughes, 77 So. 352; Columbian Mutual Life v. Harrington, 139 Miss. 826, 104 So. 297.

There is no merit in the contention made by learned counsel for appellee, in the court below, that under Paragraph 3 of the covenant, Mr. Craft had sixty days in which to propound a claim for disability and that he was misled as to his rights in that regard.

Chattanooga Sewer Pipe Works v. Dumler, 120 So. 450.

It is a cardinal principle of construction that a contract is to be construed as a whole; that all its parts are to be harmonized so far as reasonably possible; that every word in it is to be given effect, if possible; and that no part is to be taken as eliminated or stricken by some other part unless such a result is fairly inescapable.

Continental Casualty Co. v. Pierce, 154 So. 281.

There was no proof or offer to make proof of appellee's alleged disability while he was a member in good standing and while the covenant was in force and effect.

O. B. Triplett, Jr., of Forest, and Homer Currie, of Raleigh, for appellee.

Appellee, Craft; was totally and permanently disabled at a time when the policy involved was in full force and effect.

American Bankers Ins. Co. v. White, 158 So. 348, 171 Miss. 677; Equitable Life Ins. Co. v. Serio, 124 So. 485, 155 Miss. 515; Metropolitan Life Ins. Co. v. Lambert, 128 So. 750, 157 Miss. 759; Lamar Life Ins. Co. v. Catlett, 139 So. 455; New York Life Ins. Co. v. Bain, 152 So. 845.

The policy involved was in full force at the time when appellee applied for disability benefits, for two reasons: (a) Appellee's act in mailing the "Dr. Spencer Certificate" on June 9, 1927, to C. W. Mangum of Magee, Miss., was sufficient notice of disability and the recipient, Mangum, was, by statute, a general agent of appellant.

Sec. 5196, Code of 1930; Travelers Fire Ins. Co. v. Price, 152 So. 891, 169 Miss. 531; Reliance Life Ins. Co. v. Cassity, 163 So. 508, 173 Miss. 840.

(b) Under an automatic option applicable to appellee's policy, which was one year old, the "insurance under the covenant" was "continued in force" for sixty days, within which time appellant's Home Office had received appellee's application and had denied liability.

Identical words or phrases will be given the same meaning and interpretation when used and repeated in one single contract.

13 C. J. 532, sec. 491; Broom's Legal Maxims (7 Ed.) page 593.

The interpretation urged by appellee is reasonable and exclusively affords harmony to all of the policy provisions.

A. L. I. Restatement, Contracts, sec. 235, Clause (c).

Even though there were two reasonable interpretations which might be given to the policy, that construction favorable to appellee would be required.

A. L. I. Restatement, Contracts, sec. 236, Clause (d).

The existence of a total permanent disability, but not the filing of proof, while the policy was in force was a condition precedent.

Sec 2294, Code of 1930; Dodson v. Telegraph Co., 97 Miss. 104, 52 So. 693; Standard Acc. Ins. Co. v. Broom, 111 Miss. 409, 71 So. 653; Berry v....