O'Connor v. Knights & Ladies of Sec.

• Decision Date: 29 June 1916
• Docket Number: No. 30763.,30763.
• Citation: 158 N.W. 761,178 Iowa 383
• Parties: O'CONNOR v. KNIGHTS AND LADIES OF SECURITY.
• Court: Iowa Supreme Court

178 Iowa 383

158 N.W. 761

O'CONNOR

v.KNIGHTS AND LADIES OF SECURITY.

No. 30763.

Supreme Court of Iowa.

June 29, 1916.

Appeal from District Court, Chickasaw County; W. J. Springer, Judge.

Action to recover amount alleged to be due on a benefit certificate issued on the life of plaintiff's husband. Judgment for the plaintiff in the court below. Defendant appeals. Affirmed.M. E. Geiser, of New Hampton, for appellant.

Smith & O'Connor, of New Hampton, for appellee.

GAYNOR, J.

[1] This action is brought to recover an amount alleged to be due on a certificate of insurance, issued by the defendant company to Victor E. O'Connor, in the amount of $2,000. This certificate was issued on the 21st day of October, 1913, and the plaintiff was named as beneficiary. The assured, Victor E. O'Connor, died on the 2d day of April, 1914, within six months from the issuance of the certificate. The certificate provided that if the assured died within six months from the issuing the policy, the beneficiary should be entitled to receive but 60 per cent. of the total amount named in the policy. It is admitted that due proofs of death were filed as required by the certificate and laws of the company. The National Executive Committee of the appellant company passed upon plaintiff's claim and rejected the same. The assured paid all the assessments required by the certificate and the laws of the society up to the time of his death. The defense is based on the claim that the February, 1914, assessment and dues were not paid during the month of February; that the same were not paid to the local council until the 5th day of March, 1914; that he was at the time and prior to the time of payment, in ill health, and dangerously sick, and that this fact was not known to the insured at the time the February assessment was paid and received. The defense is based on the constitution and and by-laws of the society, which provide, in substance, and so far as material to this controversy, as follows:

“On or before the last day of each month, the members shall, without notice, pay the sum of one assessment and the local dues to the financier of the local council. The financier of each subordinate council shall keep a book wherein all regular and special assessments and dues received from each member holding a valid certificate, shall be credited. Such entries shall be made showing the date when actually received by the financier.”

“All assessments for every month shall become due and payable on the first day of the month. The certificate of each member who has not paid such assessment or assessments and dues on or before the last day of the month, shall, by the act of such nonpayment, stand suspended without notice, and no act on the part of the council or any officer thereof, or of the National Council shall be required as essential to such suspension, and all rights under said certificate shall be forfeited.”

The constitution and by-laws further provide:

“No right under such certificate shall be restored until it has been duly reinstated by the member complying with the laws of the order, with reference to reinstatement.”

It further provides:

“Each member who has been suspended for nonpayment of dues, or nonpayment of an assessment or assessments shall only be reinstated in accordance with the constitution and laws of the order.”

Under the heading, “How a Member May Be Reinstated Within Sixty Days,” we find the following:

“Any beneficiary member suspended by reason of nonpayment of an assessment or assessments or dues, may, within sixty days from the date of such suspension, be reinstated upon the following conditions, and none other: By payment within sixty days from the date of suspension of all arrearages of every kind, including assessments and dues, for which he would have been liable had he remained in good standing: Provided, however, that he be in good health at the time of making payment to the financier, with a view to reinstatement. The payment of any such assessments and dues for reinstatement shall be a warranty by such member that he is in good health at the time of such payment. Provided, further, that the receipt and retention of such assessments and dues, in case the suspended member is not in good health * * * shall not have the effect of reinstating said member, or of entitling him or his beneficiary to any rights under this benefit certificate.”

The laws further provide:

“The National Council shall not be bound by the acceptance of arrears of assessments and dues from suspended members who are not entitled to reinstatement in accordance with the laws of the order. The receiving of such arrears and receipting therefor by any officer of a subordinate council, * * * or by any other person, or the payment by or on behalf of any suspended member, or arrears of assessments and dues, with a view of reinstatement, except as provided for in the laws of the order, shall not be binding upon the National Council. The failure of any financier to report to the National Council, as suspended, any suspended member of his council, shall not operate, in any case, as a waiver of the forfeiture occurring on account of the suspension.”

The laws further provide:

“The retention by the financier or by the order of assessments and dues paid by members, or for them, with a view to reinstatement, other than as provided in the laws of the order either before or after death, shall not constitute a waiver of any provision of these laws until a demand has been duly made for their return by such member or his beneficiary, or legal representative.”

It is further provided:

“The National Council is not bound by knowledge of or notice to officers or members of local councils, and no officer of the society, or any local council officer, or member thereof, is authorized or permitted to waive any of the provisions of the by-laws of this society which relate to the contract between the member and the society, * * * and no knowledge or information obtained by, or notice to any subordinate council or officer or member thereof * * * shall be held or construed to be the knowledge of or notice to the National Council or officers thereof, until after said information or notice be given in writing to the National Secretary of the order.”

There is a further provision that the local council and its officers are the agents of the members in making application for membership; admission of members; reinstatement of members; the collection and transmission of all assessments to the National Council; and that the National Council shall not be liable for any neglect in any of these members, nor be bound by any irregularity, neglect, or illegal action by a subordinate council, or by any of its officers.

It is the contention of the defendant that, under these by-laws, Victor E. O'Connor became suspended from the defendant society on the 1st day of March, and was not a member of the society at the time of his death; that in September, 1914, it tendered back to the representatives of Victor E. O'Connor and the plaintiff all assessments and dues received by it, or its local council, from said Victor E. O'Connor, from and after the date of his suspension aforesaid, to wit, March 1, 1914, which they refused to accept, and that it is now ready and willing to return said dues.

Defendant's contention, briefly stated, is this: That the February, 1914, assessment was due by the terms of the constitution and by-laws of the order, which were a part of the contract, on the 1st day of February; that a failure to pay this assessment during the month of February, on or before the last day, worked a forfeiture of the certificate and all rights under the certificate. Reliance is had upon the provision reading as follows:

“All payments shall be due and payable on the first day of the month. On or before the last day of each month, the member shall, without notice, pay the monthly assessment and the local dues to the financier of the local council. The certificate of each member who has not paid such assessment or assessments and dues, on or before the last day of the month, shall, by the act of such nonpayment, stand suspended without notice. No act on the part of the council or any officer thereof, shall be required as essential to such suspension, and all rights under said certificate shall be forfeited.”

The assessment for the month of February was not paid on the last day of the month, was not paid until the 5th day of March following. It is therefore claimed that, under these provisions which were a part of the contract, the assured became, by reason of the failure to pay within the month of February, suspended, and all rights under this certificate forfeited, and that the plaintiff, therefore, has no claim against this defendant upon the certificate. It must be conceded, and is conceded for the purposes of this case, that the insured, upon becoming a member of this order, was bound to take notice of its by-laws; that these by-laws entered into and became a part of the contract the same as if they were written in the contract itself. The contract so provides, and proof of a failure on the part of the assured to comply with these provisions of the contract would work a forfeiture of his certificate, and all rights under the certificate, and would be a complete defense to plaintiff's claim to recover upon the certificate, if nothing further appears.

The plaintiff, however, claims that the defendant company, with knowledge of the fact that the assessment and dues for the month of February were unpaid, accepted payment thereof on the 5th day of March, and issued to the assured a receipt in the following words:

+----------------------+
                ¦“No. .......... ¦$2.50¦
                +----------------------+
                

Knights and Ladies of Security,

Waterloo Council, No. 1051.

Located at Waterloo, State of Iowa,

March 5, 1914.

Received of Victor E. O'Connor two and fifty one hundredths dollars, payment for month of ...