Keys v. National Council, Knights & Ladies of Security

• Decision Date: 01 December 1913
• Citation: 161 S.W. 345,174 Mo. App. 671
• Parties: KEYS et al. v. NATIONAL COUNCIL, KNIGHTS & LADIES OF SECURITY.
• Court: Missouri Court of Appeals

161 S.W. 345

174 Mo. App. 671

KEYS et al. v. NATIONAL COUNCIL, KNIGHTS & LADIES OF SECURITY.

Kansas City Court of Appeals. Missouri.

December 1, 1913.

1. INSURANCE (§ 825)—FRATERNAL BENEFIT INSURANCE—WAIVER OF FORFEITURES.

The question whether a fraternal benefit association has followed a course of conduct as might waive a forfeiture of a certificate for nonpayment of dues is usually one for the jury.

2. INSURANCE (§ 755)—FRATERNAL BENEFIT INSURANCE—WAIVER OF FORFEITURES.

Waiver of forfeiture of a benefit certificate for nonpayment of dues by the acceptance of a premium is not based on contract or actual intention, but on estoppel to insist on conditions inconsistent with the acceptance or rejection of the premium.

3. INSURANCE (§ 755)—MUTUAL BENEFIT INSURANCE — WAIVER OF FORFEITURES — REVIVAL.

A forfeiture of a benefit certificate once waived cannot afterwards be revived.

4. INSURANCE (§ 755)—MUTUAL BENEFIT INSURANCE —WAIVER OF FORFEITURES.

As between the association and a beneficiary, the rule that actual knowledge of the cause of forfeiture must be shown to work a waiver will not be applied, if it should have known of the facts by proper attention to its business.

5. INSURANCE (§ 819)—MUTUAL BENEFIT INSURANCE — WAIVER OF FORFEITURE — EVIDENCE.

Slight evidence showing an intention to waive a forfeiture of a mutual benefit certificate for nonpayment of premiums will prevent a forfeiture.

6. INSURANCE (§ 755)—WAIVER OF FORFEITURE.

A waiver of a forfeiture of a mutual benefit certificate may be inferred when the association, after knowledge of the cause of forfeiture, requires insured under the policy to do some act or incur some expense.

7. INSURANCE (§ 825)—FORFEITURES—WAIVER —JURY QUESTION.

In an action on a mutual benefit certificate defended on the ground of forfeiture by nonpayment of premiums for three months, and offering to pay such arrears while ill, whether the association by accepting such dues, and requesting the appointment of an administrator, waived the forfeiture held a jury question.

8. INSURANCE (§ 755)—MUTUAL BENEFIT INSURANCE —KNOWLEDGE OF AGENTS.

Knowledge of the local financial officer of a mutual benefit association that insured was more than 60 days in arrears when she was reinstated charged the association with such knowledge.

9. INSURANCE (§ 755)—MUTUAL BENEFIT INSURANCE — ACTIONS — ADMISSION OF EVIDENCE.

The conduct of a mutual benefit association in not promptly and unequivocally declaring a forfeiture when it learned of insured's death on the day after paying dues in arrears, and instead, requesting the appointment of an administrator for insured, knowing she had no other property, could be considered in determining whether it had knowledge of her illness while retaining her premiums prior to her death, as well as on the question of waiver of the forfeiture after her death.

10. INSURANCE (§ 755)—WAIVER OF FORFEITURE.

A forfeiture for nonpayment of premiums is waived where a benefit association, with knowledge of the cause of forfeiture, causes plaintiff to incur additional expense in furnishing proof; that being an implied recognition of the continued validity of the certificate.

11. INSURANCE (§ 818) — MUTUAL BENEFIT INSURANCE—ACTIONS — ADMISSION OF EVIDENCE —WAIVER.

In an action on a mutual benefit certificate defended on the ground of forfeiture for nonpayment of premiums, evidence of the retention of back premiums paid after actual notice of insured's ill health when paying them, was admissible upon the question of the association's intention in originally receiving the premiums.

12. INSURANCE (§ 819) — MUTUAL BENEFIT INSURANCE — ADMISSION OF EVIDENCE — WAIVER OF FORFEITURE.

In an action on a mutual benefit certificate defended on the ground of forfeiture by nonpayment of premiums until after sickness, evidence that the association retained back premiums after actual notice of insured's ill health when she paid them was admissible, as showing a waiver of forfeiture by ratifying the act of the association's agent in theretofore accepting back premiums without a health certificate, so as to show that insured could rely on such a course.

13. INSURANCE (§ 825) — MUTUAL BENEFIT INSURANCE — ACTIONS — JURY QUESTION — WAIVER OF FORFEITURE.

In an action on a mutual benefit certificate claimed to have been forfeited by nonpayment of premiums, evidence held to make it a jury question whether the forfeiture was waived by failing to unequivocally declare a forfeiture on learning that the premiums were paid while insured was sick, and by requesting the appointment of a guardian for the beneficiaries.

14. INSURANCE (§ 755)—WAIVER OF FORFEITURES —ACCEPTANCE OF PREMIUMS.

By accepting and retaining back premiums with knowledge of insured's ill health when they

were paid, a mutual benefit association waived a forfeiture for nonpayment.

15. INSURANCE (§ 755)—WAIVER OF FORFEITURE —RATIFICATION.

Though a mutual benefit association did not know that its agent had accepted back premiums after the time within which they could be paid, or while insured was in bad health, it ratified the agent's act by retaining them after learning that she was in bad health when the agent received them, so as to waive the forfeiture as of the time the agent accepted the premiums.

16. INSURANCE (§ 818) — MUTUAL BENEFIT INSURANCE—ADMISSION OF EVIDENCE.

In an action on a mutual benefit certificate defended on the ground of forfeiture by nonpayment of back premiums until insured was ill, evidence that insured's neighbors knew that she was sick was not admissible to show that the company had actual knowledge of her sickness.

Appeal from Circuit Court, Buchanan County; W. K. Amick, Judge.

Action by Claudie Keys and another against the National Council, Knights and Ladies of Security. From a judgment for plaintiffs, defendant appeals. Reversed and remanded for new trial.

W. E. Stringfellow, of St. Joseph, for appellant. F. W. Paschal, of St. Joseph, for respondents.

TRIMBLE, J.

This is a suit on a fraternal beneficiary certificate of insurance issued by the defendant to one of its members, M. M. Keys, whereby it agreed to pay $2,000 to the beneficiaries therein named, upon the death of said M. M. Keys while a member of said order in good standing. The plaintiffs are the said member's three minor children who were named as beneficiaries in said certificate, and they prosecute this suit through their statutory guardian.

Mrs. Keys died December 28, 1910. It is defendant's contention that, at the time of her death, she had forfeited her rights and was not a member in good standing, but stood suspended by reason of her failure to pay certain monthly premiums, dues, or assessments within the time required. Plaintiff met this contention with the charge that this requirement of prompt payment of said monthly dues, on pain of suspension if they were not so paid, had been waived, and that defendant was estopped to defend the plaintiff's claim. A trial of this issue was had, and the jury found a verdict in favor of plaintiff for the amount due on the certificate. Defendant appeals, and contends that there was no evidence of any waiver.

Mrs. Keys had been a member and the holder of the certificate in the order since October 4, 1901. On May 26, 1904, the plaintiffs were duly named therein as beneficiaries in place of the former beneficiary. By the rules of the order and the terms of the contract, the member was required to pay a certain premium each month, and if same was not paid on or before the last day thereof, the member, ipso facto, stood suspended at midnight of said last day. During such suspension the member had no rights under his or her beneficiary certificate, and, if death occurred while such member was thus in suspension, nothing could be collected on said certificate. But if at any time within 60 days after suspension a member paid up the assessments which were delinquent, he was reinstated to his full rights, provided that at the time of making such payment he was in good health. When such delinquent dues were thus paid, however, the defendant accepted them without investigating to learn whether such member was in good health or not, and no form or ceremony was required to perfect a reinstatement. The money was received, and the member marked "reinstated" on the books. If the payment of the delinquent dues occurred after the lapse of 60 days from delinquency and consequent suspension, then, according to the written rules and terms of the contract, a medical examination certificate showing good health was required before the member could be reinstated.

The defendant order was composed of various "councils," each located in its respective community and made up of the individual members at that place, and the executive head of the institution, or "National Council" as it was called, was located at Topeka, Kan. Mrs. Keys was a member of the local council at St. Joseph. In each local council there was an officer called the "financier." The individual members of the order paid their assessments or monthly dues to this local officer, and it was his duty to send the money thus collected by him to the National Council each month, together with a detailed statement showing the names of the members who paid, the amount of each payment, the rate, and other items of information. If a member's name did not appear on this report as having paid his assessment, the absence of his name showed that he was delinquent, and his delinquency was apparent in each succeeding monthly report until his name appeared with a credit of the amount paid by him in settlement of the assessments due. It was the custom and general practice of these various local officers or "financiers" to send in their reports of collections for each month about the 20th of the succeeding month, and to include in such report all collections and payments made up to the time of sending in the report. This was well known and...