Cowan v. Allamakee County Benevolent Soc.

• Decision Date: 16 March 1943
• Docket Number: 46228.
• Citation: 8 N.W.2d 433,232 Iowa 1387
• Parties: COWAN v. ALLAMAKEE COUNTY BENEVOLENT SOC. et al.
• Court: Iowa Supreme Court

8 N.W.2d 433

232 Iowa 1387

COWAN v. ALLAMAKEE COUNTY BENEVOLENT SOC. et al.

No. 46228.

Supreme Court of Iowa

March 16, 1943

[Copyrighted Material Omitted]

B. A. Schwarzhoff and H. Haehlen, both of Waukon for appellants.

Hart & Hart, of Waukon, for appellee.

SMITH Justice.

The facts are peculiar. The undisputed evidence is that defendant-appellant, the Allamakee County Benevolent Society is an unincorporated association. But no question is raised in the record as to its capacity to contract and to be sued; nor is any issue presented as to its right to conduct an assessment life insurance business, either under Chapter 400, Code of Iowa 1939, or under any other authority.

Both plaintiff and defendants have proceeded upon the theory that the case is maintainable in equity, just as if the Society was in fact incorporated and authorized to transact business.

The contract is not between the Society on the one hand and its members on the other, but is, on its face, one between and among the members themselves: "*** who each severally, but not jointly, mutually agree to and with each other-each to pay within thirty days after the death of a subscriber to the person named by such deceased subscriber or their legal heirs, the sum of one dollar."

No constitution or by-laws are shown, no machinery or procedure is provided, so far as the record reveals, for collecting assessments and disbursing benefits, and there appears no formal organization or setup composed of officers and directors. Defendant-appellant Schwarzhoff's name appears upon the combined membership certificate and application as "Acting Secretary-Treasurer". There is no record of any provision for meetings of members or any showing as to Schwarzhoff's actual relationship to the Society or how he obtained his official position.

We shall, however, treat the case as it was treated by both parties and the trial court and proceed as if the Association was in fact qualified to conduct the business it assumed to carry on.

Stella Cowan, wife of J. D. Cowan, plaintiff-appellee, was a member of the Society at the time of her death. The contract provided: "I further agree that in the event of death caused by cancer *** during the first year of my membership, my membership shall be void and my beneficiary shall receive no benefits upon my death."

This provision raises the one clear question to be determined: Did the insured, Stella Cowan, die of cancer "during the first year" of her membership?

The trial court ruled that the burden of going forward with the evidence was upon defendants and no complaint of that ruling is urged.

Defendants contend that the death of insured did occur "during the first year" of her membership and that it was "caused by cancer". They have to establish both propositions in order to defeat the action. Both are fact questions, the only legal consideration involved being concerned with the admissibility of evidence.

I. Stella Cowan joined the Society in 1935. She died April 25, 1942. But defendants claim that in the fall of 1941 she ceased to be a member by reason of nonpayment of assessments, that she did not join again until February 9, 1942, and that therefore her death "occurred during the first year" of her membership.

The witness Steele testified that Mrs. Cowan signed the new application in the early part of 1942. Appellee objected to the evidence on the ground that the witness was incompetent under Section 11257, Code of Iowa 1939. There is no showing that the witness was a party to the suit or "interested in the event thereof" or that he sustained any such relationship to the case as to disqualify him as a witness to testify to personal transactions with the decedent. True, he was an employee or agent of defendants, but that does not bring him under the ban of the statute. University of Chicago v. Emmert, 108 Iowa 500, 79 N.W. 285; Chicago, R. I. & P. R. Co. v. McElhany, 182 Iowa 1035, 165 N.W. 67; Range v. Mutual Life Ins. Co., 216 Iowa 410, 249 N.W. 268.

II. Furthermore, the "deadman's statute" for another reason does not apply. Plaintiff-appellee does not come within any of the protected classes designated by the statute. He is the surviving spouse of the insured, but he did not bring suit in that capacity. He sued as the beneficiary of the insurance contract. He is not protected by the statute. See Beed v. Beed, 207 Iowa 954, 222 N.W. 442; Cahalan v. Cahalan, 82 Iowa 416, 48 N.W. 724.

III. We have, however, the problem of deciding whether the transaction testified to by Mr. Steele was in fact the creation of a new membership or in legal effect a mere rehabilitation or reinstatement of an existing one. Under the record shown by the testimony of defendants' own witnesses Mrs. Cowan was still a member when Mr. Steele called on her prior to the signing of the new application. She was in default, but still a member. There seems to be no doubt that she could have been put in good standing by payment of arrears amounting to seven dollars and without any question of her then condition of health.

Defendant-appellant Schwarzhoff himself testified: "Sometimes she would not contribute within the time period stated in the notice. When members fail to do so sometimes a solicitor would contact them and have them reinstated by paying in their back debts-if they were back generally two or more deaths we took them in as a new member. If they are past the age limit of 55 I may have permitted them to pay all back notices and continue their membership."

Defendants' agent, Steele, told plaintiff and his wife that they could be reinstated by paying up "all back dues". He testified: "They were talking about hard times. "I" suggested to her that she come in as a new member and he pay up all his back dues and be reinstated."

Mrs. Cowan availed herself of the device suggested by the defendants' agent. There was no suggestion that she had ceased to be a member. No action had been taken terminating her membership. Although she was in arrears, defendants had continued to send her notices of further assessments. They were proposing to accept back dues. She was to all outward appearance a member, though in default.

If her original membership ever terminated in her lifetime it was at the moment she signed, and because she signed, the new application. There can be no valid argument that it had been terminated by reason of nonpayment of assessments.

What then was the legal significance of the transaction of February 9 1942? Surely the written application does not embody the entire contract. It purported to create a new membership in favor of one who was already a member. It must be read in the light of the circumstances and of the intentions...