Edwards v. Patriots
| Decision Date | 04 March 1912 |
| Citation | 144 S.W. 1117,162 Mo.App. 231 |
| Parties | ELIZABETH EDWARDS, Respondent, v. AMERICAN PATRIOTS, Appellant |
| Court | Kansas Court of Appeals |
Appeal from Boone Circuit Court.--Hon. D. H. Harris, Judge.
AFFIRMED.
E. W Hinton for appellant.
Gillespy & Conley for respondent.
This suit is to recover on a policy issued by the American Benevolent Association on the life of A. L. Edwards for the benefit of Elizabeth Edwards, his wife. The defendant is an Illinois corporation, alleged to be doing business in this state. The policy or certificate of insurance was issued on the 4th day of December, 1895. By the terms of the policy upon satisfactory proof of the death of the insured, the company agreed to pay the plaintiff $ 1,000 provided that the policy has been in force ten years and that the insured is in good standing at the date of his death, less any disability benefits theretofore paid.
The insured died on the day of June, 1910, and the plaintiff furnished all the required proofs of his death. During the life of the insured defendant paid him in disability benefits the sum of ninety dollars, and it is alleged that there is still due plaintiff on said policy $ 910.
It is alleged that on the 26th day of August, 1907, the defendant assumed and agreed to pay the benefits promised in said policy; and that the deceased complied with all the conditions of the policy on his part; and paid all dues and assessments.
The answer consisted of a general denial and the following special defenses, viz.: 1st: That the defendant was a fraternal benefit association, incorporated under the laws of the state of Illinois; and that by its charter it was prohibited from accepting the deceased as a member because at the time of the assumption he was above the age limit of sixty years; and for that reason the attempted assumption was ultra vires and void. 2d. As a partial defense, that under the constitution (of the order) the certificate was chargeable with the difference between the assessment rate provided in such certificate, and the higher rate charged by defendant, multiplied by deceased's expectancy, based on his age when he became a member of the defendant association. 3d. That the plaintiff had failed to appeal from the action of defendant's directors in rejecting her claim in part; and that under its constitution an appeal to the committee of appeals was made a condition precedent to an action at law.
The reply was a general denial and estoppel to plead ultra vires, etc. When the policy was issued the deceased was fifty-one years of age. The defendant was incorporated as a Fraternal Beneficiary Association under the Illinois Act of 1893, under the name of the Loyal Sons of America, and by amendment, its name was changed to the American Patriots. The Illinois statute under which the defendant was incorporated is similar to section 7109, R. S. 1909, defining Fraternal Benevolent Associations. The act provides that the limits of the age of applicants for membership shall not exceed sixty years. The articles of the association provide that the funds for the payment of benefits shall be derived from assessments upon the members, and that payment shall be subject to compliance by the member with the constitution, contract, rules and laws of the society, subject to the laws of the state of Illinois.
In August, 1907, an agreement was entered into between the American Benevolent Association and defendant, called a contract of consolidation, which provided for the taking over of the members of the former association. This document recites that it is proposed to consolidate said associations into one organization upon the following condition, among others: That the consolidated society shall continue to transact business under the charter, constitution and laws of the American Patriots now in force, subject to amendment or repeal as experience or condition may require.
The defendant issued to the deceased its certificate of assumption containing the following provision: In consideration of the contract of consolidation by and between the American Patriots of Springfield, Illinois, and the American Benevolent Association of St. Louis, the American Patriots hereby assumes and agrees to pay the benefits promised in Certificate No. 5108, issued to A. L. Edwards by the American Benevolent Association; provided that the member is in good standing at the date of death or disability insured against.
When this change was effected in August, 1907, the insured was past sixty-three years of age, at which time defendant had no assessment rate for persons above 55 years of age. Afterwards the rate of assessment was raised and a change was made in the constitution providing that members might continue their membership by paying the rate of assessment which was in force for his certificate on May 1st, 1908, and be charged with the difference between the rate so paid and the increased rate. The deceased continued to pay the rate named in the certificate. When proofs of death were made, the defendant's board of directors made the deduction from the amount of the policy, the amount so charged in the difference of rates. The plaintiff refused to accept the reduction, but did not appeal from the decision of the board of directors to the committee of appeals as provided by the constitution. It is necessary to state further that at the time defendant entered into the assumption contract it was not licensed to do business in this state, but was so licensed afterwards and during the life of the policy in suit.
The points relied on for a reversal are, 1st: That the attempted assumption of the benefit certificate was ultra vires and void because defendant was prohibited by its charter from accepting a member above the age limit. 2d. That since defendant under its charter could only raise funds for the payment of death benefits by means of assessments, it had the inherent right to raise the assessment whenever necessary, and that this right was preserved by the provision of the agreement taking over the members of the Benevolent Association, that the business should be...
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