Fraternal Aid Union v. Whitehead

• Decision Date: 21 March 1921
• Docket Number: 21472
• Citation: 125 Miss. 153,87 So. 453
• Court: Mississippi Supreme Court
• Parties: FRATERNAL AID UNION v. WHITEHEAD

87 So. 453

125 Miss. 153

FRATERNAL AID UNION v. WHITEHEAD

No. 21472

Supreme Court of Mississippi

March 21, 1921

1. APPEAL AND REEOR. Insurance. Where reasonable men may draw different conclusions from evidence, verdict not set aside evidence showed insured railway mail clerk did not jump from car, "but fell out.

The jury is the judge of the credibility of the witnesses and the weight of the evidence; and where the facts and circumstances are such that reasonable men may draw different conclusions therefrom, the verdict of a jury will not; be set aside as being insufficient to support a verdict. The facts in this case examined, and held sufficient to support the verdict. (Post, p. ---.)

2 INSURANCE. Constitution of benefit society that no officer or agent might alter, modify, or waive provisions held void.

A provision in the constitution and by-laws of a benefit society that "no officer or member of the supreme lodge except the supreme president by dispensation, nor any local or subordinate lodge or any officers or member thereof, or any organizer, deputy, or agent, shall have authority to change, alter, modify, or waive any of the provisions of this constitution," is void because a corporation, society or individual cannot repeal he law of estoppel and waiver and because said provision does not leave any officer or agent of the society who may act for it so as to bind it as to these subjects. London Guarantee & Accident Co. v. M. C. Railroad Co., 97 Miss. 165, 52 So. 787.

3. INSURANCE. Representations in application not warranties when made on explanation of manager of society.

Where a state manager of a benefit society whose powers are not limited by the by-laws of the society makes out an application for an applicant for a benefit certificate, and writes the answers to questions propounded to the applicant and interprets the meaning of such questions and writes answers after having the full facts explained to him by the applicant, the answers will not be held warranties so as to avoid the certificate issued thereon, even though not literally true. If they are not false, considered in the light of the facts made known to the agent, or if not false in the light of his explanations of the meaning and purpose of the questions asked, they will not avoid the policy or certificate.

HON. W. H. POTTER, Judge.

APPEAL from circuit court of Hinds county, HON. W. H. POTTER, Judge.

Action by Mrs. Julia A. Whitehead against the Fraternal Aid Union. Judgment for plaintiff, and defendant appeals. Affirmed.

Judgment affirmed.

Wells, Stevens & Jones and A. J. Calhoun, for appellant.

The testimony for both plaintiff and defendant neither raised nor left an issue for the jury and the court should have peremptorily found for the defendant or have so directed the jury. See: Continental Casualty Co. v. Hardenberg, 83 So. 278.

The next error of the court upon which we rely for reversal of this case and judgment here, was that of overruling the demurrers of the defendant to plaintiff's amended replications to the third and fourth pleas of the defendant, and the granting of the instructions numbers 2 and 5 for the plaintiff.

This action of the court was in palpable violation of the provisions of section 20 of the uniform Fraternal Beneficiary Law adopted by the state of Mississippi and which appears as section 5192, of Hemingway's Code. heretofore copied herein, this Fraternal Beneficiary Code has been enacted in thirty-two states of the Union and was adopted by the legislature of Mississippi in 1916. A determined effort was made to have this section of the code repealed by the legislature of state of Mississippi at its session in 1920, but after a hearing thereon the bill for that purpose was defeated.

The theory upon which the learned circuit judge below acted and ruled as he did, was that Mr. Reagan, who was the local organizer of the local lodge of the defendant, could and did waive for the defendant order in certain material particulars provisions of the contract of insurance and in advising the applicant to falsely answer the question propounded to him, by his action the company was estopped to set up the false answer made by the applicant as set forth in the application, upon the faith of which the defendant acted.

Section 106 of the constitution of the defendant has been copied hereinbefore in full. In addition, however, to this provision of the constitution, which probably was not before the applicant at the time of his application and in order that no wrong might be done by anyone thereby, there is printed in the application itself, immediately before the signature of the applicant the following provision which was expressly agreed to by the applicant when he made his application for insurance, to-wit:

"I hereby agree and declare that all statements and answers made by me herein to be warranties, and in all respects full, true and complete; that such statements and answers were written by my direction and read over by me before the signing of this application, and that said statements and answers have been in no way or manner affected or induced by any agent, officer or representative of the Fraternal Aid Union and I hereby agree for myself and my beneficiary or beneficiaries, if any one or more of such answers or statements are false, untrue or fraudulent, the benefit certificate which may be issued to me shall be null and void and of no effect.

It will therefore be seen that not only was this section 106, enacted in compliance with said section 20 of the Fraternal Beneficiary Act, and should be enforced by this court, but also in order that no harm might be done, the applicant was expressly warned to make his answers full, true and complete, and not to be influenced by any advice of officious representatives who seem to think they know more about what the medical directory should pass upon as being material to the risk than such medical directors who have given years of study to the proposition.

But whether or not this court should agree with us upon the wisdom of this law enacted by the legislature, it appears to us, with great deference that this is utterly immaterial. That was a matter for the legislature and the legislature has not only acted and passed the law, but has declined to repeal this very provision.

This section is one of the most important of what is considered the model fraternal beneficiary law approved by the insurance commissioner of this state, by the National Insurance Commissioner Association, and as above stated, is now rapidly being adopted by all of the states of the Union, governing fraternal beneficiary companies.

It should be remembered that instead of being a commercial corporation, the defendant is a fraternal benefit society. In recent years the courts have recognized the fact that insurance on the fraternal plan, with mutuality and without profit distinguishes the work of such an association from a commercial enterprise, and the association should not be measured by the standard, or determined by the legal principles which are applicable between an ordinary insurance company and the holder of one of its policies.

Every member, in fact stands in the peculiar situation of being party of both sides, insurer and insured, and the members of the association are, so to speak partners. Newman v. Supreme Lodge K. of P., 70 So. 241; Thomas v. Knights of the Maccabees, 149 P. 7; Royal Arcanum v. Green, 237 U.S. 531.

Unless this court, therefore, we respectfully submit, is prepared to declare null and void this section of the law of Mississippi and hold it unconstitutional for some reason unknown to us, or do as the lower court did, hold that the legislature could not have meant what the law plainly provides, then, we respectfully submit that the action of the lower court is palpably erroneous and contrary to the provisions thereof and will have to be reversed and judgment entered here for this defendant.

Under almost precisely similar facts and under exactly the same provision of law, our sister state of Alabama recently sustained the validity of this law and denied recovery in the case of Woodmen of the World v. McHenry, 73 So. 97. Likewise our sister state, Louisiana, on the west has upheld said section 20 in a very recent case of Bargainer v. Knights of Maccabees, etc., decided May 31, 1920, 85 So. 57.

Likewise, the state of Tennessee on the north has upheld that exact provision in the case of Simmons v. Sovereign Camp, Woodmen of the World, 188 S.W. 941. See, also, the following authorities directly in point: Vant v. Grand Lodge Knights of Pythias, 86 S.E. 677 (S. C.); Currence v. Sovereign Camp, Woodmen of the World, 78 S.E. 442 (S. C.); Woodmen of the World v. Wernett (Texas), 216 S.W. 669; Greyson v. Grand Temple, etc., (Texas), 171 S.W. 489; Hubbard v. Modern Brotherhood, 93 S.W. 911; Hartman v. National Council, etc., 175 S.W. 212 (Mo. App.); Thompson v. Modern Brotherhood, 189 Mo.App. 15, 176 S.W. 506; Brittenhan v. Sovereign Camp W. O. W., 67 S.W. 587, (Mo. App.); Baycock v. Sovereign Camp W. O. W., 155 N.W. 923, (Wis.); Sternheimer v. Order Commercial Travelers, 93 S.E. 8 (S. C.); Klein v. Supreme Council Loyal Association, 163 N.Y.S. 5; Supreme Court Riess v. Supreme Conclave, etc., 164 N.Y.S. 878; Woodmen of the World v. Hall, 104 Ark. 538, 148 S.W. 526, 41 L. R. A. (N. S.) 517; Sumelim v. American Fraternal Stars, 167 N.W. 844 (Mich.); Davis v. National Council, etc., 196 S.W. 97; Sov. Camp W. O. W. v. Anderson, 200 S.W. 698 (Ark.).

Even before the passage of the so-called New York conference bill the uniform fraternal bill above referred to by us, containing said section 20 many of the states upheld the validity of such by-laws providing against waiver...