Gruwell v. National Council Knights And Ladies of Security

• Decision Date: 07 October 1907
• Parties: SALLIE B. GRUWELL, Respondent, v. NATIONAL COUNCIL KNIGHTS AND LADIES OF SECURITY, Appellant
• Court: Kansas Court of Appeals

104 S.W. 884

126 Mo.App. 496

SALLIE B. GRUWELL, Respondent, v. NATIONAL COUNCIL KNIGHTS AND LADIES OF SECURITY, Appellant

Court of Appeals of Missouri, Kansas City

October 7, 1907

Appeal from Jackson Circuit Court.--Hon. John G. Park, Judge.

AFFIRMED.

Judgment affirmed.

I. B Kimbrell and Chas. A. Riehl for appellant.

(1) The court erred in giving the peremptory instruction to find for the plaintiff. Smith v. Woodmen of the World, 179 Mo. 119. (2) The court erred in excluding that part of section 112 of the constitution and laws of 1902, pleaded in defendant's answer, relating to the suspension of members for the non-payment of assessments and dues. Beadle v Insurance Co., 3 Hill (N. Y.) 161; Bacon on Benefit and Life Insurance, sec. 353. (3) The court erred in excluding section 112 of the laws of defendant company of 1900, similar in terms to the law of 1902 pleaded, relating to the suspension of members for non-payment of assessments. (4) The court erred in instructing the jury to find for the plaintiff in the sum of two thousand dollars for the reason that said policy provided in its face for the retention of fifty dollars on one thousand dollars. (5) The court erred in refusing to submit to the jury the issue of the forfeiture of the policy sued on by reason of the non-payment of assessments and dues for the month of August, 1903, as provided by the terms of said policy and the constitution and laws of the order, on the substantial evidence offered by the defendant.

E. W Shannon and M. A. Fyke for respondent.

(1) The answer of the defendant admits the execution and delivery of the policy of insurance and the plaintiff made out a prima-facie case by the introduction of the policy and proof of death; no demurrer to plaintiff's case was interposed. Plaintiff was then entitled to recover unless the defendant pleaded and proved a forfeiture. Bacon, Ben. Societies (3 Ed.), sec. 414; Johnson v. Woodmen of the World, 95 S.W. 951; Mulroy v. Supreme Lodge, 28 Mo.App. 463; Stewart v. Supreme Council, 36 Mo.App. 319; Force v. Supreme Lodge, 41 Mo.App. 106. (2) Under the pleadings, evidence and law of this case the contract of insurance is an entire contract of assurance for life. Insurance Co. v. Statham, 93 U.S. 24; Bacon, Ben. Soc. (3 Ed.), sec. 351. (3) The delivery of the policy sued on put in force a contract of insurance good not for one month only but good for a lifetime and the payment of the premium was not a condition precedent to the continuance of the policy, and, unless the policy contains the provisions which authorize forfeiture of the contract, the contract could not be forfeited by failure to pay subsequent premiums. McMasters v. Insurance Co., 90 F. 40. (4) The policy was sued on as an ordinary contract of insurance issued by an ordinary insurance company; it is treated as such in the answer and in the evidence offered by defendant; and being an ordinary life insurance contract, the beneficiary, Sallie B. Gruwell, had a vested interest in said contract which could not be altered or changed without her consent. Bacon, Ben. Societies (3 Ed.), sec. 304; Holland v. Taylor, 111 Ind. 125. (6) The mere reference to the "laws" of defendant was not sufficient. When the answer bases defense upon its by-laws, they must be set up in the answer: Johnson v. Woodmen of the World, 95 S.W. 951; McDonald v. Insurance Co., 154 Mo. 618.

OPINION

JOHNSON, J.

--Action upon a policy of life insurance. In obedience to a peremptory instruction, the jury returned a verdict in favor of plaintiff for the amount prayed in the petition and the cause is here on the appeal of defendant, whose principal contention is that under the pleadings and evidence, a verdict should have been directed in its favor.

For aught disclosed by the allegations of the petition, the contract of insurance was one of an old line or mutual company, but defendant, while admitting its execution, alleges in the answer that it is one falling within the operation of the laws applicable to fraternal beneficiary associations. The contract itself recites that it is a "beneficiary certificate issued by the National Council of the Knights and Ladies of Security" to Wm. C. Gruwell, a member of Success Council No. 941, located at Kansas City, State of Missouri," and provides that "in consideration of the premises and in accordance with and under the provisions of the constitution and laws of the order now in force or that may be hereafter enacted . . . the said National Council hereby agrees to pay to Sallie B. Gruwell, bearing the relation to said member of wife, the sum of $ 2,000," etc. Among the stipulations is one providing that "this certificate and contract is and shall be subject to forfeiture for any of the causes of forfeiture which are now prescribed in the laws of the order, or for other cause or causes of forfeiture which may be hereafter prescribed by this order by the amendment of said laws."

The answer alleges that defendant "was at all times herein mentioned a fraternal beneficiary society organized and incorporated as a body corporate and politic under and by virtue of the laws of the State of Kansas and doing business in the State of Missouri by permission and license of said State . . . that at the time of the death of the said Willam C. Gruwell, he had not performed all of the conditions of said contract upon his part, nor had he complied with all of the provisions of the constitution and laws of the order, in force at that time, nor was he a member of the order in good standing at the time of his death, for that at the execution of said contract and at all times between the date of said contract and the death of the said William C. Gruwell, there were laws of said order in force and effect, in the words and figures as follows, to-wit: 'The financial secretary of each subordinate council shall keep a book wherein all assessments shall be entered against each member holding a valid certificate. Such entry shall be made bearing date of the first day of the month for the regular assessment, or any special or extra assessment which shall have been levied for that month, which must be paid on or before the last day of the month. All assessments for any month shall become due and payable on the first day of that month. The certificate of each member who has not paid such assessment or assessments on or before the last day of the month, shall by the fact of such non-payment, stand suspended without notice, and no act on the part of the council or any officer thereof or the National Council shall be required as essential to such suspension, and all rights under said certificate shall be forfeited. No right under said certificate shall be restored until it has been duly reinstated by compliance by the member with the laws of the order with reference to reinstatement,' which said law, at the time of the death of the said William C. Gruwell, was known as section 112 of the Laws of 1902, and said section had been and was in force and effect from July 1, 1902, up to and including the time of the death of the said William C. Gruwell."

Other sections of laws enacted by defendant in 1902 are then set out in haec verba, but none of them deals directly with the subject of the forfeiture of the certificate, or the suspension of the member except section 123, which, it is stated, was in force at the time the certificate was issued (September 21, 1901), and was re-enacted when the laws were revised in July, 1902. It is as follows: "Each member of the subordinate council shall pay into the funds thereof, as monthly dues, such sum as shall be prescribed by the laws thereof, to commence with the date of initiation. Any member who neglects or refuses to pay these dues, as fixed by the laws of the council, within the time provided by said by-laws shall, by such failure, stand suspended from the order."

After alleging the amount of dues and assessments, Mr. Gruwell was required to pay monthly at stated periods in order to prevent a forfeiture of the certificate and his suspension as a member, it is alleged that "he wholly failed to pay or cause to be paid the said regular assessment and dues for the month of August, 1903, and by said failure so to pay within said month of August, 1903, became suspended as a member of said defendant order and all rights under said certificate became and were wholly forfeited thereby," and that, thereafter, and to the date of his death which occurred on the second day of January, 1905, he failed to pay any of the monthly dues and assessments which would have accrued during that period had he remained a member in good standing. Other facts are alleged in the answer, but their repetition here is not essential to a proper understanding of the questions which, in our view, are determinative of the rights of the parties. The reply is a general denial.

To receive the benefit of the liberal laws and rules of construction pertaining to death benefit certificates issued by fraternal beneficiary associations, defendant had the burden of pleading and proving not only that it possessed the essential qualifications of such societies as...