Kavanaugh v. Supreme Council of Royal League

• Decision Date: 06 June 1911
• Citation: 158 Mo. App. 234,138 S.W. 359
• Parties: KAVANAUGH v. SUPREME COUNCIL OF ROYAL LEAGUE.
• Court: Missouri Court of Appeals

138 S.W. 359

158 Mo. App. 234

KAVANAUGH v. SUPREME COUNCIL OF ROYAL LEAGUE.

St. Louis Court of Appeals. Missouri.

June 6, 1911.

1. PLEADING (§ 350*) — MOTION FOR JUDGMENT — DETERMINATION.

A motion by plaintiff for judgment on the answer operates as a demurrer, and admits the truth of all facts well pleaded.

2. INSURANCE (§ 719*) — MUTUAL BENEFIT INSURANCE — SUICIDE CLAUSE — VALIDITY.

In Illinois, under the decisions of its courts, an agreement by a member of a mutual benefit society to comply with future by-laws authorizes a future by-law reducing or destroying benefits on suicide; but the rule is otherwise in Missouri.

3. CONTRACTS (§§ 2, 144*) — LAWS GOVERNING — VALIDITY — CONSTRUCTION.

When a contract is both made and to be performed in the same state or country, the law thereof enters into it as a factor and controls its execution, validity, interpretation, and legal effect, in the absence of provision to the contrary.

4. INSURANCE (§ 712*) — MUTUAL BENEFIT INSURANCE — LAWS GOVERNING.

A mutual benefit certificate of life insurance, issued by an Illinois corporation and accepted by a member who then, and when he died, resided in that state, as does his wife, is governed by the laws of that state, as affecting validity of a by-law reducing the benefits payable on suicide, under an agreement that the member would abide future by-laws.

Appeal from St. Louis Circuit Court; J. Hugo Grimm, Judge.

Action by Anna Sexton Kavanaugh against the Supreme Council of the Royal League. Judgment for plaintiff, and defendant appeals. Reversed and remanded.

R. P. & C. B. Williams, for appellant. F. H. Bacon, for respondent.

NORTONI, J.

This is a suit on a certificate of life insurance. On motion, the court gave judgment for plaintiff notwithstanding defendant's answer, as though none of the matters pleaded therein constituted a defense to the action, and from this judgment defendant prosecutes the appeal.

Defendant is a mutual benefit society organized and existing under the laws of the state of Illinois, and as such is engaged in the business of life insurance therein, as well as in Missouri, under the laws of which latter state it has duly qualified. Plaintiff, the widow of Thomas W. Kavanaugh, is the beneficiary in a certificate of life insurance issued by defendant to her husband September 24, 1895, whereby defendant insured the life of Thomas W. Kavanaugh in her favor in the amount of $4,000. Plaintiff's husband having departed this life August 29, 1905, this suit was instituted on the certificate of insurance to the end of collecting the same, and the petition is in the usual form, with the certificate itself annexed thereto as an exhibit. As the court sustained a motion for judgment on defendant's answer and gave judgment for plaintiff notwithstanding its averments, it will be essential to set out so much of the answer as is relevant to the question in judgment.

By its answer defendant pleads that it is a mutual benefit society organized and existing under the laws of the state of Illinois, with its home office in that state, and that it is duly qualified as such under the laws of Missouri as well, and has been at all times since the approval of the act of our Legislature touching benefit societies on March 16, 1897 (Laws 1897, p. 132). The answer admits that plaintiff's deceased husband became a member of the order by association with its council, known as Lake Shore Council No. 59, in the state of Illinois, during the month of September, 1895, and that on the 24th day of that month it issued to him the certificate of life insurance declared upon in the petition, by which it undertook to pay plaintiff, wife of the insured, the sum of $4,000 in event of the prior death of the insured under the conditions only prescribed in the certificate, the insured's application therefor, the constitution and by-laws of the order then in force, or to be thereafter adopted. But it is averred that the insured stipulated in his application for the insurance that, "if accepted as a member, I agree to comply with, and that my membership and all interests of the persons entitled to such benefits shall be subject to, all laws, rules and regulations, now in force in the order or which may hereafter be adopted by it." That this application and all the provisions thereof are made a part of the certificate of insurance which was issued thereon, and that in the certificate sued upon, which the insured duly signed and accepted, it was agreed between the parties the insured member, Thomas W. Kavanaugh, would comply in the future with all the laws, rules, and regulations now governing said council and fund, or that may hereafter be enacted by the Supreme Council to govern said council and fund, all of which are made a part of the contract.

Besides averring that the contract of insurance was made in Illinois, the answer avers, too, that both parties resided in that state at the time, and that the contract was to be performed therein. Indeed it is averred that the insured and plaintiff continued to reside in the state of Illinois until the time of the death of the insured, which occurred in New York, and that the contract was fully performed in Illinois, where plaintiff still resides. It is averred, too, that by the contract of insurance defendant specially reserved to itself the right to amend or repeal any of its by-laws then in force, and to substitute new by-laws therefor, and thus change the contract of insurance between the parties. At the time the contract of insurance was entered into, one of defendant's by-laws provided, if any member shall, within five years subsequent to his admission into the order, die by the act of his own hand, sane or insane, his beneficiary shall receive only one-half of the face value of the certificate. The answer avers that in accordance with the power reserved to repeal or change the existing by-laws or make new ones that it from time to time amended the by-law on suicide above mentioned prior to the death of the insured until, on April 11 and 12, 1905, when by competent authority of the order it enacted the following by-law thereon, which took effect July 1, 1905. The by-law so adopted and in force at the time plaintiff's husband came to his death as follows: "No member, whether admitted heretofore or hereafter shall die by his own act or hand, sane or insane; and if any member whether admitted heretofore or hereafter shall die by his own act or hand, sane or insane, such death shall forfeit all rights and claims to the amount agreed to be paid on his death and specified in the benefit certificate of such member and his beneficiary or beneficiaries shall receive and be paid in lieu thereof a sum equal to the total amount actually paid by such member to the widows' and orphans' benefit fund of the order."

It thus appears that the time limit prescribed against suicide, which operated to defeat the right to a portion of the insurance under the contract as originally entered into, was entirely removed, and under the by-law in force at the time of the death of the insured the beneficiary is entitled only to the amount paid by the member to the widows' and orphans' fund, which in this case is conceded to be $322.84. Defendant avers that the insured, Thomas W. Kavanaugh, departed this life in the city of New York, in the state of New York, on the 29th day of August, 1905, after the by-law above copied took effect, by his own hand, through an act of suicide, by shooting himself with a pistol, and because of this fact plaintiff is entitled to recover only the sum of $322.84 under the contract as modified by the duly enacted by-law on suicide above set forth.

As before stated, it is averred in the answer that defendant is an Illinois corporation, organized and existing under the laws of that state, though duly qualified to do business in Missouri as well, and that it keeps and maintains its chief office in the city of Chicago, Ill., where the contract of insurance was entered into in September, 1895. That Thomas W. Kavanaugh, the insured, was a citizen and resident of the state of Illinois at the time of contracting the insurance, and at such time became a member of defendant's Lake Shore Council, No. 59, in that state, to which he paid all of the dues and assessments in performing the contract on his part. That the contract of insurance between the parties was to be performed in the state of Illinois, and that the insured (Kavanaugh) continued to reside therein to the time of his death, where he paid all of his dues and assessments, and that his wife (plaintiff) resided in said state during all the time, resided there at the time of the death of the insured, and continues to reside there even now, but prosecutes this suit on the certificate in Missouri, for the reason the rule of decision is more favorable here as to the interpretation and construction of such contracts than in Illinois.

Besides pleading the contract was both entered into and to be performed in the state of Illinois, the answer pleads as well the rule of decision which obtains in that state with respect to such contracts of insurance. Touching this matter, it explicitly sets forth that contracts of insurance made between defendant and other mutual benefit societies and their members, stipulating, as in this case, the member will comply with the laws, rules, and regulations then governing the council or fund, or that may thereafter be enacted by the order to govern such council and fund, are interpreted and construed under the law of that state to authorize and render effectual subsequently enacted by-laws on the question of suicide, such as here involved. A number of adjudications of the Supreme Court of Illinois in several cases set forth in the answer declaring such a rule of decision are aptly referred to therein. So it appears the question presented relates to the interpretation, construction, and legal effect of a...