Leven v. Yeomen Mut. Ins. Co. of Des Moines, Iowa

• Decision Date: 06 March 1937
• Docket Number: 33202.
• Citation: 65 P.2d 254,145 Kan. 338
• Parties: LEVEN v. YEOMEN MUT. INS. CO. OF DES MOINES, IOWA.
• Court: Kansas Supreme Court

65 P.2d 254

145 Kan. 338

LEVEN v. YEOMEN MUT. INS. CO. OF DES MOINES, IOWA.

No. 33202.

Supreme Court of Kansas

March 6, 1937

Syllabus by the Court.

Where members of mutual insurance association agreed to be bound by existing and subsequently enacted by-laws, and association subsequent to suspension of member for nonpayment of assessments, enacted by-law providing that suspended certificate should be continued in force for amount of death benefit for specified period according to amount of paid-up protection, beneficiary held entitled to recover full benefit for death of suspended member who died during period of extended protection.

In an action to recover on a certificate of fraternal insurance where the contract provided that the rights and liabilities of the parties were to be governed by the by-laws of the defendant organization, including those which might be enacted subsequent to the making of the contract, the pertinent by-laws set out in the opinion examined, and held notwithstanding the insured was suspended for nonpayment of dues, an after-enacted by-law conferred on him the right to extended insurance protection for a limited period as prescribed by the defendant's table of values, and the judgment in behalf of the beneficiary was correct.

Appeal from District Court, Wyandotte County, Division No. 4; Charles A. Miller, Judge.

Action by Esther Leven against the Yeomen Mutual Insurance Company of Des Moines, Iowa, successor in interest to the Brotherhood of American Yeomen. From a judgment for plaintiff, defendant appeals.

Geo. R Allen and Richard F. Allen, both of Topeka, and Arthur J Stanley and J. E. Schroeder, both of Kansas City, for appellant.

A. J. Herrod, of Kansas City, for appellee.

DAWSON Chief Justice.

This was an action to recover on a benefit certificate of insurance.

The insured was in arrears in the payment of his monthly dues and assessments at the time of his death; and the controverted issue between the plaintiff beneficiary and the defendant company was whether the liability of the latter was merely the paid-up value of the benefit certificate or its face value under the contract provision for extended insurance.

The pertinent facts were these: On December 8, 1922, a predecessor of the defendant organization issued a certificate of insurance to Sam Leven. Later a certificate designated form C was issued to him in lieu thereof. By its terms the insured was required to make monthly payments of $2.69 as assessments and incidental dues. The certificate contained the usual lengthy recitals of the rights of the insured and the liabilities of the insurer, and bound the beneficiary to abide by whatever by-laws might be adopted in the future by the defendant organization. The certificate contained a provision for "paid-up and extended protection" when it had been in effect for three years or longer. Pertinent thereto were the following:

"After the payment of monthly or other payments for three or more full years, one of the following options shall become effective.

"1st. Automatic Paid-Up Protection. In case of the non-payment of any monthly or other payment when due hereon, then without any action on the part of the member named herein, this certificate shall become a paid-up certificate for the amount shown by the adjoined table of paid-up protection and such amount will be payable in one sum under the conditions of this certificate upon the death of the member; or ***

"3rd. Extended Protection. Upon written request of the member named herein, made while this certificate is in full force, the Association will extend and continue in force the full amount of this certificate as term protection for the number of years and days shown by the adjoined table of extended protection. ***

"Table of Values

"At the end of Paid"up Protection Extended Protection

Years Days

3 years $55 2 64"

In July, 1926, while the insured was still in good standing, the by-law of defendant which governed the rights of members suspended for nonpayment of dues read, in part, thus:

"[§ 118] *** a member holding a Form C certificate on which he has paid the monthly or other required payments for three full years or more shall be entitled, within thirty days from the date of his said suspension, to exercise one of the options specified in his certificate relating to paid up and extended protection or cash withdrawal value. *** If the member exercises no such option within said thirty-day period, then his certificate shall be in force for only the amount and period provided by the terms thereof."

On August 31, 1926, the insured failed to pay the assessment due that month, in consequence of which he was suspended. At that time his certificate of insurance had been in force 3 years, 8 months, and 25 days.

The insured never paid his delinquent monthly assessments and was never restored to active membership; and he never made an election between paid-up insurance and extended insurance as his certificate of insurance permitted him to do.

On November 14, 1927, section 118 of the by-laws was amended and renumbered section 107, and reads, in...