Jackson v. Security Ben. Ass'n, 18954.

• Decision Date: 20 November 1939
• Docket Number: No. 18954.,18954.
• Citation: 139 S.W.2d 1014
• Parties: JACKSON v. SECURITY BEN. ASS'N.
• Court: Missouri Court of Appeals

139 S.W.2d 1014

JACKSON v. SECURITY BEN. ASS'N.

No. 18954.

Kansas City Court of Appeals. Missouri.

November 20, 1939.

Rehearing Denied April 29, 1940.

Appeal from Circuit Court, Bates County; C. A. Calvird, Judge.

Action by Madison M. Jackson against the Security Benefit Association, a corporation, for old age disability benefits payable under a fraternal life certificate, and for recovery of allegedly excessive assessments. From a decision sustaining defendant's motion for a new trial after a directed verdict for plaintiff, plaintiff appeals.

Affirmed in part and in part reversed and remanded with directions.

D. C. Chastain and Gardner Smith, both of Kansas City, and L. J. Bishop, of Butler, for appellant.

A. W. Fulton, of Chicago, Ill., Harry L. Ladbury, of Topeka, Kan., and E. E. Naber, of Kansas City, for respondent.

KEMP, Judge.

This is an appeal from the order of the circuit court of Bates County, sustaining defendant's motion for new trial after a directed verdict for plaintiff on both counts of his petition.

The plaintiff (appellant here) is the assured under a certificate of insurance, the original of which was issued January 5, 1904, by the defendant (respondent), a fraternal benefit association, originally operating under the name of the National Council of the Knights and Ladies of Security. In 1919, its name was changed to the Security Benefit Association.

The first count of plaintiff's second amended petition, on which the case was tried, alleges the issuance of an original certificate of insurance for $1,000, January 5, 1904, and that, in substitution for said certificate and upon plaintiff's application therefor, a new certificate was issued by defendant to plaintiff on the 29th day of July, 1916, identical in form with the original certificate except for the change of beneficiary. The petition further alleges that under Section 77 of the by-laws, which, under the terms of said certificate, was made a part thereof, any beneficiary member maintaining in full force his certificate until he should become seventy years of age and physically disabled was entitled, on proof of such disability, to receive ten percent of his certificate annually during the continuance of the disability, subject to certain deductions therein set out, which are not here material.

It further alleges that the plaintiff was, on July 24, 1935, and at the time of the institution of the action, eighty-four years of age; that, as provided by said Section 77, he held his certificate valid until he reached the age of seventy years, and that thereafter, and since 1929, he has been physically disabled; and that he had performed all of the conditions imposed upon him by the certificate. These allegations are followed by a prayer for disability benefits of $100 per year from 1929 to 1935, both inclusive, in the amount of $600.

In the second count, plaintiff seeks the recovery of alleged excessive assessments paid by him to defendant on his certificate, and charges that when the certificate was issued in 1904, the assessment rate which his contract required him to pay was $2.30 per month; that, thereafter, at various times, the defendant unlawfully increased the assessments he was required to pay; that from 1904 to 1935, the plaintiff paid all the assessments maturing under his certificate, including the assessments so unlawfully increased over a period from 1919 to 1935; that the amount of the assessments he thus paid from 1919 to 1935, in excess of the amount that was actually due from him under the terms of the contract of insurance, was $249.15, for which amount he prays judgment. There is no dispute in the record that such sum represents the aggregate amount of such excess payments.

Defendant's answer to the first count of plaintiff's petition, after pleading a general denial, admits the issuance of said certificate and the then existence of Section 77 of the by-laws, and pleads various affirmative defenses. It sets up certain provisions of the plaintiff's application by which he agreed to abide by all the laws of the association then existing or which might thereafter be enacted, and pleads certain of the by-laws of the association tending to show the authority to increase assessments, and pleads certain facts tending to show the necessity for such increase. Other defenses interposed are that, from time to time, and beginning in 1919, the defendant by its lawful action increased the amount of assessments which members were required to pay for mortality benefits, and that the same were paid by the plaintiff up to April 1, 1935; that said increases were necessary and reasonable, and that the plaintiff acquiesced in and recognized the right and power of the defendant to make said increases pursuant to its laws and the necessity therefor, by adopting such changes and complying therewith, by the payment of such increased death benefit assessments from the time of the adoption of each of said increased assessments, to and including March, 1935, and that the plaintiff is now estopped by his conduct and course of dealing to challenge or question the right of the defendant to make such increases of assessments, to question the necessity therefor, or the reasonableness thereof; that, effective January 1, 1920, it amended its by-laws whereby members were not entitled to the old age disability benefits unless they paid additional assessments therefor, and made an additional levy of $9.50 per month for said old age disability benefits, and that plaintiff failed to pay said additional levy, by reason whereof he was not entitled to any such benefits.

The answer further pleads: "That plaintiff has never made demand for the benefits claimed in this action or proof of any disability to this defendant Association prior to January, 1935, and this defendant had no notice of the alleged disability claimed by plaintiff, and pursuant to its by-laws, rules and regulations the plaintiff could not and is not entitled to have and recover from this defendant any alleged disability benefits to January, 1935, * * * and that plaintiff by his conduct in not making claim to the defendant for said alleged disability benefits, if any, within the time prescribed by defendant's laws and within a reasonable time has waived any and all right which he may have to the alleged disability benefits, if any, and is now estopped to claim the same."

The answer to the second count consists of a general denial and the incorporation by reference of certain paragraphs set out in its answer to the first count.

The reply, after denying generally the allegations of the answer, specifically pleads that the action of the defendant association, in making such increases of assessments, was unreasonable, discriminatory, arbitrary and unlawful, and that such assessments were made with the deliberate purpose of causing certificates of the character of plaintiff's to lapse and thereby escape liability thereon; that no provision of the constitution and by-laws of defendant association referred to in defendant's answer or any other section of the constitutional laws authorized defendant, or any of its officers or committees, to require plaintiff to pay the sum of $9.50 per month, beginning January 1, 1920, with the privilege of obtaining old age disability benefits and "that if said alleged rate was promulgated by the defendant association, it was never legally authorized or adopted by it".

Upon the trial of the case, plaintiff introduced in evidence the original certificate issued to him in 1904, and offered testimony showing that upon his request for a change of beneficiary named in the certificate, a new certificate with the beneficiary changed therein, in the same form and containing the same provisions, was issued to him on July 29, 1916, in lieu of the original. Plaintiff further introduced in evidence Section 77 of defendant's bylaws, wherein was the provision for the payment of disability benefits, and introduced in evidence records of the defendant (as verified by an agent of defendant association), with respect to payments of assessments made by plaintiff on this policy, which records disclosed that plaintiff had paid the assessments demanded by defendant on his certificate from 1904 to March, 1935, in the aggregate amount of $1,111.65. From this it appears by mathematical calculation that the amount so paid by plaintiff was $249.15 in excess of the aggregate amount due under said certificate, on the basis of the rate of $2.30 per month as in said certificate provided; that plaintiff, at the time of the trial, would be eighty-five years of age the 24th day of next month (July), and had been physically disabled since 1929—for the previous "eight or ten years" (the date of the trial was June 3, 1936); that on November 12, 1935, plaintiff's attorney had written a letter on his behalf to the defendant, advising defendant that plaintiff was then eighty-four years of age; that he had been disabled for the past six years, and that the plaintiff would furnish evidence of such disability and would execute any proof of claim that defendant might desire, and insisted upon payment under the disability provisions of the policy. The letter indicates that previous reference to this claim had been made to defendant but is entirely indefinite as to its terms or the time when made. This is unimportant, however, as the portion of defendant's answer hereinabove set out admits, by clear inference at least, that plaintiff gave notice of disability and made demand of payment therefor in January, 1935. It was further shown that no request was made for further proof of age and disability.

The defendant demurred to the plaintiff's evidence on each count. Upon the overruling of each of the demurrers by the court, the defendant offered no evidence, electing to stand on its demurrers, whereupon the court, at plaintiff's request, instructed the jury to find for the plaintiff on each...