International Brotherhood, Etc. v. Huval

• Decision Date: 14 October 1942
• Docket Number: No. 7931.,7931.
• Citation: 166 S.W.2d 107
• Parties: INTERNATIONAL BROTHERHOOD OF BOILER MAKERS, IRON SHIPBUILDERS AND HELPERS OF AMERICA et al. v. HUVAL.
• Court: Texas Supreme Court

166 S.W.2d 107

INTERNATIONAL BROTHERHOOD OF BOILER MAKERS, IRON SHIPBUILDERS AND HELPERS OF AMERICA et al. v. HUVAL.

No. 7931.

Supreme Court of Texas.

October 14, 1942.

Rehearing Denied November 25, 1942.

Error to Court of Civil Appeals of Ninth Supreme Judicial District.

Action by J. R. Huval against the International Brotherhood of Boiler Makers, Iron Shipbuilders and Helpers of America and the American National Insurance Company to recover disability benefits under a life and disability insurance policy issued by defendant insurance company. A judgment for plaintiff against both defendants was affirmed by the Court of Civil Appeals, 154 S.W.2d 233, and defendants bring error.

Judgment against defendant brotherhood reversed and cause remanded for new trial, and judgment against defendant insurance company affirmed.

Frank S. Anderson and Wayman & Kleinecke, all of Galveston, and Barnes & Barnes and J. Austin Barnes, all of Beaumont, for International Brotherhood etc.

J. R. McDougald, Sharfstein, Bell & Weinert, and John L. Bell, all of Beaumont, for Huval.

Dan Moody, of Austin, amicus curiae.

ALEXANDER, Chief Justice.

This suit was brought by J. R. Huval against International Brotherhood of Boilermakers Iron Shipbuilders & Helpers of America and the American National Insurance Company to recover disability benefits alleged to be due under a contract of insurance. The Court of Civil Appeals affirmed a judgment against both defendants in favor of the plaintiff. 154 S.W.2d 233. For opinions on a former appeal see Tex.Civ. App., 101 S.W.2d 1072 and 133 Tex. 136, 126 S.W.2d 476. The defendants sued out a writ of error to this Court.

The International Brotherhood of Boilermakers, Iron Shipbuilders & Helpers of America, hereinafter referred to as the Brotherhood, is an unincorporated labor organization, with its home office in the State of Kansas, operating as a fraternal benefit society, with local lodges in Texas. The plaintiff, who resided at Port Arthur, Texas, was a member of the Brotherhood. The Brotherhood, as a part of the benefits accruing to its members, agreed through its By-Laws to pay its members certain disability and death benefits under stipulated conditions. In order to provide these benefits the Brotherhood in 1929 entered into a contract with the American National Insurance Company, a Texas life insurance company, with its home office at Galveston, Texas, to insure its members in the payment of the benefits provided for in the By-Laws. This contract of insurance was renewed from year to year, and was in force at the time the loss in question occurred in 1934.

The suit was against both the Brotherhood and the Insurance Company. We will first consider the liability of the Brotherhood. Whatever contract there was between the plaintiff and the Brotherhood for the payment of disability benefits, was created solely by the Constitution and By-Laws of the Brotherhood. The plaintiff introduced proof of the By-Laws of the Brotherhood as they existed in 1925. Under these By-Laws a member was entitled to recover for total disability, if he was totally disabled to the extent that he could not "perform his daily occupation." The plaintiff also introduced evidence to show that he had suffered an enlargement of a pre-existing double hernia, as the result of which he could no longer follow his daily occupation as a boilermaker. On the other hand, the defendant offered to prove that in 1930, long prior to the loss in question, the By-Laws of the Brotherhood had been amended so that in order to authorize recovery for total disability it was necessary for the plaintiff to prove that he was disabled to the extent that he could not follow any gainful occupation. The court refused to allow proof of the By-Laws as so amended. There was evidence that the plaintiff could no longer follow his daily occupation as a boilermaker, but could have followed, and that subsequent to his injury he had actually followed, other gainful occupations. At the time the plaintiff joined the Brotherhood, he expressly agreed to be bound by any subsequent changes that might be made in its By-Laws or rules, and such agreement was binding upon him in this case. 45 C.J. 36. Since whatever rights he had against the Brotherhood were controlled by the By-Laws, said defendant should have been permitted to prove what the provisions of the By-Laws were at the time the injury occurred, and it was error for the trial court to refuse it the right to do so. Because of this error the judgment of the Court of Civil Appeals, affirming the judgment in favor of the plaintiff against the Brotherhood, must be reversed, and the cause remanded to the trial court for a new trial.

It does not follow, however, that the insurance company is not liable. The insurance company entered into a contract with the Brotherhood which was in part as follows:

                           "American National Insurance Company
                                    of Galveston, Texas
                              (Hereinafter called the Company)
                                            "Policy No. G-40,000
                                   "By This Policy Hereby
                                    Insures the Members of
                "The International Brotherhood of Boilermakers
                     Iron Shipbuilders, and Helpers
                     of America of Kansas City, Kansas
                    (Hereinafter called the International
                               Brotherhood)
                

"subject to the terms and conditions hereinafter contained.

"Immediately upon receipt, during the continuance of this contract, of due proof of the death or disability (as hereinafter defined) of any member of said International Brotherhood, the Company agrees to pay the amount as determined by the Plan of Insurance set forth below.

"Plan of Insurance

"The amount of insurance on any member insured hereunder shall be determined as follows:

                           "Universal Plan
                  "I. Death from any cause ........... $ 1,000.00
                 "II. Death by accident ..............   2,000.00
                "III. Total and permanent disability
                      (a) (Hereinafter defined)          1,000.00
                      (b) (Hereinafter defined)            500.00
                      (c) (Hereinafter defined)            800.00
                

* * * * * *

"Any sum payable by the Company as a death or disability claim shall be immediately payable upon due proof of the same at the office of the International Brotherhood in Kansas City, Kansas, for the use and benefit of the beneficiary designated by the Insurance in accordance with the terms of this policy."

* * * * * *

"Members Insured

"Members are automatically insured in accordance with the terms of the Plan of Insurance on Page one, subject to the terms of this policy.

"The International Brotherhood shall furnish the Company with the names of all members as they become eligible for insurance hereunder, with the information as to each necessary to determine the age, the amount of insurance, and the effective date of the insurance.

* * * * * *

"Total Disability

"If while this policy is in full force and there is no default in the payment of premiums, any insured member who becomes wholly and permanent disabled by accident or disease, so as to be totally and permanently prevented thereby for life from engaging in his usual occupation, and if satisfactory proof of such disability is furnished to the Company, then the Company will pay to the insured member or his designated beneficiary the lump sum settlements enumerated below.

* * * * * *

"The company further agrees that Article XII of the Constitution and By-Laws of the International Brotherhood, adopted on the twenty-sixth day of September, 1925, are hereby made a part of this contract the same as if set out herein at length, and the Company agrees to be bound thereby and to assume all liability incurred by the International Brotherhood thereunder, anything in this contract to the contrary notwithstanding, except in all cases where the policy is more favorable to the Brotherhood than the Constitution and By-Laws."

Said contract provided that the Insurance Company would issue to each member covered by the policy an individual certificate setting forth the protection afforded to him by the Insurance Company. In compliance therewith the Insurance Company issued and delivered to plaintiff an individual certificate, which provided in part as follows:

"Universal Plan

"American National Insurance Co. of Galveston, Texas.

                "Certificate No. 34863              Age 36
                

This is to Certify That

International Brotherhood of Boiler Makers, Iron Ship Builders and Helpers of America

"of Kansas City, Kansas, has contracted to insure the life of Member J. R. Huval ...... Local Union No. 305, City of Port Arthur, County of ........