Cutler v. The Modern Samaritans, 29919.

• Decision Date: 15 June 1934
• Docket Number: No. 29919.,29919.
• Parties: CUTLER v. THE MODERN SAMARITANS.
• Court: Minnesota Supreme Court

255 N.W. 824

192 Minn. 72

CUTLER v. THE MODERN SAMARITANS.

No. 29919.

Supreme Court of Minnesota.

June 15, 1934.

Appeal from District Court, St. Louis County; H. J. Grannis, Judge.

Action by Elsie Cutler against the Modern Samaritans. A demurrer to the complaint was overruled, and the defendant appeals from the judgment subsequently entered.

Judgment affirmed.

Hallam & Hendricks, of St. Paul, for appellant.

Leo A. Ball, of Duluth, for respondent.

LORING, Justice.

In a suit upon a life insurance certificate the defendant's demurrer was overruled, and the case comes here on an appeal from the judgment subsequently entered.

Plaintiff is the wife of Edsell C. Cutler and is the beneficiary of a certificate of life insurance issued by the defendant fraternal order. April 11, 1916, Cutler, the insured, made application for membership in the order. A certificate which insured his life for $2,000 was issued to him. May 4, 1926, the insured disappeared from his home and he has not since been heard from; no tidings have been received by the plaintiff nor any one with whom he would be likely to communicate.

At the time this certificate was issued there was in force what is now 1 Mason's Minn. St. 1927, § 3461, an act passed by the Legislature in 1907, which reads as follows: "Every certificate issued by any association * * * shall provide that the certificate, the constitution and laws of the association and the application for membership and medical examination, signed by the applicant, shall constitute the contract between the association and the member; * * * and any changes, additions or amendments to said charter or articles of association, constitution or laws duly made or enacted subsequent to the issuance of the benefit certificate shall bind the member and his beneficiaries and shall govern and control the contract in all respects the same as though such changes, additions or amendments had been made prior to and were in force at the time of the application."

The benefit certificate here involved contained provisions substantially the same as the italicized portion of the act.

In 1921 the defendant amended its by-laws so as to incorporate therein the following clause: "Disappearance or unexplained absence of a member shall be no presumption of death until the full term of his life expectancy at the time he disappears, according to the N. F. C. or American Experience tables of Mortality, has expired."

The full term of the insured's life expectancy has not yet expired. Plaintiff furnished proof of death to the defendant, relying on the presumption of death after an unexplained absence of seven years, and demanded payment. Defendant refused payment, and this action was commenced. Defendant interposed a demurrer to the complaint which was overruled with leave to the defendant to answer. Defendant failed to answer, and judgment was entered in favor of plaintiff. It is the contention of the defendant that the by-law of 1921, coupled with the 1907 statute, and the provisions of the policy defeat plaintiff's right of recovery in this action, since plaintiff cannot invoke the presumption of death after seven years' unexplained absence. There is no contention that time of death could not be proved by circumstantial evidence as in Sherman v. Minn. Mutual Life Ins. Co. (Minn.) 255 N. W. 113, filed May 25, 1934, but in this case the complaint pleads only the presumption from seven years' absence and does not allege death except as a result of the presumption.

Plaintiff contends that the by-law has no application to the certificate in question, and that the act of 1907 should be construed to incorporate only reasonable changes into certificates previously issued, and that the by-law in question is unreasonable and void as to this certificate.

Many cases involving benefit insurance certificates issued by fraternal and beneficial orders, in which a provision similar to the one contained in section 3461 has been incorporated in the certificate, constitution, charter, or articles of incorporation, have held that any subsequent by-laws must be reasonable; and that the enactment of a by-law similar to that adopted by defendant in 1921 is unreasonable and invalid as to certificates previously issued. Boynton v. Modern Woodmen, 148 Minn. 150, 181 N. W. 327, 328, 17 A. L. R. 401; Samberg v. Knights of Modern Maccabees, 158 Mich. 568, 123 N. W. 25, 133 Am. St. Rep. 396; Richey v. Woodmen of World, 184 Iowa, 10, 168 N. W. 276, L. R. A. 1918F, 1116; Arden v. United Artisans, 124 Or. 225, 264 P. 373; Security Benefit Ass'n v. Henning, 74 Colo. 394, 222 P. 396; Gaffney v. Royal Neighbors, 31 Idaho, 549, 174 P. 1014; McCormick v. Woodmen of World, 57 Cal. App. 568, 207 P. 943.

The Supreme Court of Illinois in Steen v. Modern Woodmen, 296 Ill. 104, 129 N. E. 546, 17 A. L. R. 406, held a by-law like the one enacted by defendant...