Crohn v. The Order of United Commercial Travelers of America

• Decision Date: 07 April 1913
• Parties: ANNIE E. CROHN, Respondent, v. THE ORDER OF UNITED COMMERCIAL TRAVELERS OF AMERICA, Appellant
• Court: Kansas Court of Appeals

156 S.W. 472

170 Mo.App. 273

ANNIE E. CROHN, Respondent, v. THE ORDER OF UNITED COMMERCIAL TRAVELERS OF AMERICA, Appellant

Court of Appeals of Missouri, Kansas City

April 7, 1913

Appeal from Jackson Circuit Court.--Hon. O. A. Lucas, Judge.

Judgment affirmed.

Vorys Sater, Seymour & Pease, Boyle & Howell and Joseph S. Brooks for the appellant.

(1) The deceased Ruby S. Crohn having made application for membership of defendant order at Hutchinson, Kansas and being received into membership there, his contract was a Kansas contract and is governed by the laws of the State of Kansas, and the plaintiff cannot recover, the evidence showing that he committed suicide. Hart v. M. W. A., 60 Kan. 678; Hart v. Knights of Maccabees, Id.; Ritter v Life Ins Co., 169 U.S. 139; Supreme Commandery v. Ainsworth, 71 Ala. 436; Hartman v. Keystone Ins. Co., 21 Pa. 466; Fitch v. Life Ins. Co., 59 N.Y. 557. (2) The certificate was binding on the company from the time it left the home office, and if not, then when the local agent received it in Kansas. Ins. Co. v. Babcock, 42 L. R. A. 91; Yonge v. Assur. Soc., 30 F. 902.

Samuel R. Freet and Clyde Taylor for respondent.

(1) The sole question in this case is whether the insurance is a Missouri or Kansas contract. The divisions of this brief are as follows: The insurance is a Missouri contract because: The rule is that the place where the last act occurs which makes the transaction a binding contract is the place of the contract and the law of that place is the law of the contract. Cravens v. Ins. Co., 148 Mo. 583, 50 S.W. 519, 53 L. R. A. 305, 71 Am. St. Rep. 628; Kilcullen v. Ins. Co., 108 Mo.App. 61; Pietri v. Seuguenot, 96 Mo.App. 258; Horton v. Ins. Co., 151 Mo. 604; Rhodus v. Ins. Co., 156 Mo.App. 281; Norman v. U. C. T., 163 Mo.App. 175. (2) The delivery of the certificate of membership or policy of insurance to the member was the last act which had to occur to make a binding contract of insurance in this case. Folks v. Yost, 54 Mo.App. 55; White v. Reed, 60 Mo.App. 384; State v. Pierce, 52 Kan. 521; Brownell v. Greenwich, 4 L. R. A. (N. Y. App.) 691; Perkins County v. Graff, 114 F. 444; Sisk v. Ins. Co., 45 N.E. 804.

OPINION

JOHNSON, J.

This is an action on a contract of life insurance issued by defendant to Ruby S. Crohn in July, 1892. Crohn died June 1, 1910, from the effects of a gunshot wound and plaintiff, his widow and beneficiary, brought this suit to recover the amount of the policy. A jury was waived and the cause was submitted to the court on the pleadings and an agreed statement of facts. The court rendered judgment for plaintiff and defendant appealed.

Defendant is a fraternal beneficiary association incorporated in Ohio. At the time Crohn became a member and received the policy or certificate in suit he was a citizen of this State, residing in Kansas City and we infer from the statements of counsel that defendant at that time was authorized to do business as a fraternal association in Kansas but not in this State. Subsequently, and before the death of Crohn, defendant complied with the laws of this State relating to such societies and became authorized to do business therein. The contract of insurance, by its terms, exempted defendant from liability should Crohn commit suicide and for the purposes of this case plaintiff concedes the truth of the fact alleged in the answer as the principal defense, that such was the cause of his death and further admits that if the policy should be classed as a Kansas contract, she has no cause of action, or rather, that the defense of suicide would afford defendant complete exemption from liability. Plaintiff insists, however, that the policy is a Missouri contract and defendant concedes that if it is, the defense of suicide cannot be interposed, since defendant was not authorized to do business in this State as a fraternal society at the time the policy was issued. [Schmidt v. Foresters, 228 Mo. 675.]

Counsel agree that the controlling question in the case is whether the policy should be treated as a contract made in Missouri or in Kansas and the agreed statement of facts presents that question as one difficult of solution. The membership of the defendant society is composed of commercial travelers and one of the subordinate lodges is known as Council No. 34 at Hutchinson, Kansas. The constitution provides that "any white male person of good moral character not under twenty-one and not over sixty years of age, who has engaged for a term of not less than one year immediately preceding the date of his application, as a commercial traveler . . . and who has not lost a hand, an arm, a foot, a leg or the sight of one or both eyes, or is not deaf, or subject to fits, or is not mentally or physically infirm, or who has no wound, injury or disease which will render him specially liable to accidents . . . may become a member (if found acceptable) upon application made in due form to a subordinate council within whose jurisdiction he may reside and the payment of ten dollars, one-half of which shall accompany his application and the remainder of which shall be paid prior to his initiation. . . . Any subordinate council may require any applicant for membership to pass a satisfactory examination as to his physical condition before acting on his application. . . . The supreme executive committee may impose a fine of ten dollars on any subordinate council which admits to membership a person whose application, as determined by such committee, shows that he is not eligible thereto . . . such committee may also reject the application of any ineligible or undesirable person and may refuse to issue him a certificate of membership, but if such applicant shall have been initiated he may if he so elects, be placed on the list of social members, in which event his payment of two dollars to the assessment fund shall be returned to him. . . . The right of an initiate to indemnity under the provisions of section 6, article 17 is conditioned on the issuance to him of a certificate of membership by the supreme executive committee."

The section just referred to provides: "If any member of the order (other than a social member) who has paid, when due, all fees, fines, costs, dues and assessments charged or levied against him shall sustain, during the continuance of his membership and while in good standing, bodily injury effected through external, violent and accidental means, which alone shall occasion death . . . the order . . . shall pay to the person entitled thereto a sum not exceeding $ 5000," etc.

It appears from these and other provisions of the constitution and laws that the order was composed of two classes of members, i. e., social members who were entitled to all of the social privileges of the order but because of their undesirability as insurance risks were not entitled to participate in pecuniary benefits and beneficiary members who were entitled to participate in all of the privileges and benefits of the order. Further it appears that applicants were to be initiated before the question of their right to participate in pecuniary benefits should be determined; that the final decision of that question was vested in the supreme executive committee at Columbus, Ohio, and that no applicant should become a beneficiary member until "the issuance to him of a certificate of membership by the supreme executive committee."

Crohn made application to the local council at Hutchinson for membership in the order, paid all dues and assessments required of him and was duly initiated. His application followed the usual course and was acted upon by the supreme executive committee which decided to issue a membership certificate to him. The method of delivering certificates executed by the committee was prescribed by the laws as will appear in the following excerpt. "The applications of all candidates shall be forwarded to the supreme secretary within ten days after each candidate has been initiated . . . and the secretary of the supreme council shall issue a certificate of membership and forward the same to the subordinate council to which said applicant may be attached, with instructions for its delivery to said member unless the forwarding of such certificate be ordered withheld by the supreme executive committee."

Pursuant to this rule Crohn's certificate was forwarded by the supreme secretary to the secretary of the subordinate council at Hutchinson with instructions to deliver it to Crohn. Defendant knew that Crohn lived in Kansas City and with that knowledge received him as a member of the Hutchinson council. The secretary of that council enclosed the certificate in a letter addressed to Crohn at Kansas City and mailed the letter. Crohn received it at Kansas City, kept the certificate and continued as a member of the order in good standing to the date of his death, paying all dues and assessments levied against him.

The use of the mails for the delivery of the policy into the hand of Crohn was the voluntary act of defendant and was not in obedience to any...