Rehearing
Denied June 10, 1940.
Writ of
Certiorari and Review Denied July 18, 1940.
Appeal
from Third Judicial District Court, Parish of Jackson; Enos
C. McClendon, Judge.
Suit by
H. F. Lewis against Columbia Mutual Life Insurance Company
for cash surrender value of fraternal benefit policy. From
judgment for defendant, the plaintiff appeals.
Affirmed.
Fraternal
insurance contracts cannot be considered in the commercial
sense but are only mutual promises of every member to pay the
contract of every other member, and there can be no vested
right in any provision of the contract.
DREW
Judge.
Plaintiff alleged that the Columbia Mutual Life Insurance
Company, organized under the laws of Mississippi and
domiciled at Memphis, Tennessee, and authorized and doing
business in Louisiana, is indebted unto him in the sum of
$936.45, plus 5% per annum interest from judicial demand and
all costs of this suit. That there was issued to him a policy
or certificate of insurance on his life by the Eminent
Household of Columbian Woodmen, a fraternal insurance
organization, existing under the laws of Georgia and
authorized to do business in Louisiana That the policy was
issued on March 6, 1920, for the amount of $3,000 and his
wife, Jessie Mead Lewis, was designated as beneficiary; and
that he has paid all premiums fees and assessments and that
the policy is in full force and effect.
Plaintiff
further alleged that the Columbia Mutual Life Insurance
Company has assumed all the liabilities and obligations of
the said fraternal Tennessee organization issuing said policy
and, since the date of assumption by defendant, it has mailed
out all notices of dues, premiums and assessments and has
collected them since that date and that the fraternal order
has not operated for over fifteen years.
Plaintiff
further shows that all premiums, dues and assessments have
been paid by him for more than 17 years, 10 months and 21
days, and that under the contract he is entitled to a cash
surrender of the amount sued for, in accordance with the
table in said policy.
Plaintiff
further alleged that he has offered to surrender his policy
and has demanded a cash surrender settlement, and that
defendant has refused to make said settlement. He prayed for
service and citation and for judgment.
Several
exceptions to the petition were filed and tried. They are not
urged here. Therefore, we will not concern ourselves with
them.
Defendant
in answer admits it was organized under the laws of
Mississippi and has a place of business in Memphis,
Tennessee. It admits that the Eminent Household of Columbian
Woodmen, a Georgia fraternal benefit association, issued a
covenant to plaintiff, and alleged as follows:
" 4. The Eminent Household of Columbian Woodmen, was a
fraternal benefit society, incorporated under the laws of
Georgia. In the year 1921, the Eminent Household of Columbian
Woodmen, a fraternal benefit society, was merged and
consolidated with Columbian Woodmen, a fraternal benefit
society, incorporated under the laws of the State of
Mississippi. After this merger and consolidation, the Eminent
Household of Columbian Woodmen ceased to exist. Harvey F.
Lewis was a member of the Eminent Household of Columbian
Woodmen and, as a result of this merger and consolidation,
became a member of the Columbian Woodmen, the Mississippi
fraternal benefit society. During the year 1921, the State of
Mississippi granted an amendment to the charter of Columbian
Woodmen, making certain changes in its organization and
changing its name to Columbian Mutual Life Assurance Society.
In the year 1926, said Columbian Mutual Life Assurance
Society, under the laws of the State of Mississippi, secured
an amendment to its charter, under which it was authorized to
operate as a mutual life and disability insurance company.
After securing said amendment to its charter, the Columbian
Mutual Life Insurance Company discontinued operating as a
fraternal benefit society, insofar as securing additional
members, but it continued to be obligated to carry out the
certificates or covenants of the insurance issued and
outstanding in the name of Eminent Household of Columbian
Woodmen, Columbian Woodmen or Columbian Mutual Life Assurance
Society, in accordance with the provisions thereof and
subject to all the conditions thereof. The relation that
existed between Columbian Mutual Life Insurance Company and
the holders of covenants of insurance issued by said
fraternal benefit societies was based upon certain covenants
of insurance, as well as the applications made for said
covenants, the laws of the states of Mississippi and
Louisiana and the Constitution and By-laws of said society,
as existing or legally amended."
It
admits that plaintiff paid certain contributions referred to
as premiums but not over the period of time alleged and that
plaintiff offered to surrender the certificate or covenant,
but same was not accepted for the reason there was no cash
surrender value on said policy in any amount.
Further
answering, defendant shows:
" That while, under the amendment to its charter
defendant discontinued issuing covenants of insurance as to a
fraternal benefit society, that as to such covenants of
insurance as were previously in existence, including the
covenants of insurance held by Harvey F. Lewis, the relation
of defendant to said Harvey F. Lewis remained unchanged, and
said covenant of insurance issued in the name of Eminent
Household of Columbian Woodmen to Harvey F. Lewis continued
in effect between said Harvey F. Lewis and defendant, in
accordance with all of its terms, provisions and conditions,
as set forth in the covenant of insurance, the application
therefor, the laws of the states of Mississippi and
Louisiana, and the Constitution and By-Laws of said Society,
as previously existing or as
amended, and both said Harvey F. Lewis and this defendant
were bound by all of said terms, provisions and conditions.
" That on March 16, 1937, an assessment was duly levied
by the officers of said company against the covenant of
insurance held by the said Harvey F. Lewis, the amount of
said levy being the sum of $918.69, bearing 5% per annum
interest, compound, thereon from March 16, 1937, until paid;
that said assessment has not been paid by the said plaintiff
and the same is now due and unpaid.
" That immediately on said assessment having been
levied, plaintiff was notified thereof and on plaintiff's
offer to surrender said covenant for the cash surrender value
thereof, plaintiff was again notified of said levy and the
amount thereof in the sum of $918.69, plus interest, as
aforesaid, which was equal to the cash surrender value or
loan value of the covenant and at all of said times and now
there was no cash or loan value left in said covenant and
that for the reasons hereinabove and as will be hereinafter
set forth, the said plaintiff is not entitled to have any sum
paid to him as the cash surrender value of said covenant of
insurance or any other sum whatsoever.
" That as aforesaid, the Eminent Household of Columbian
Woodmen was a Georgia fraternal benefit society, incorporated
under the laws of said state; that the said Georgia society
was merged in 1921 with the Columbian Woodmen, a fraternal
benefit society incorporated under the laws of the State of
Mississippi, after which the Georgia fraternal benefit
society ceased to exist. Whereupon, plaintiff became a member
of the Mississippi fraternal benefit society which, by
amendment of charter in 1921, became the Columbian Mutual
Life Assurance Society and that therefore the said covenant,
having been issued in the State of Louisiana and under and by
virtue of the fraternal benefit society laws thereof by a
Georgia fraternal benefit society, subject to the laws of
said state and under authority and by virtue of the rights,
privileges, conditions and stipulations as set forth in its
charter, and continued with the Mississippi fraternal benefit
society, as hereinabove set forth, subject to and in
accordance with the fraternal benefit society laws of said
state and subject to and under the terms and provisions of
the laws of said state of Louisiana, and subject to and under
the terms and provisions of the constitution and by-laws of
said society and the application of said plaintiff for said
covenant, defendant now shows that among others, the
pertinent provisions of the said laws of the said states and
of the by-laws, constitution and application to be as
hereinafter set forth.
" One of the provisions of the law of Mississippi, found
in the Acts of 1916, c. 206, and in the Code of Mississippi
of 1930, at Section 5237, provides: ‘ Every certificate
issued by any such society shall specify the amount of
benefit provided thereby, and shall provide that the
certificate, the charter or articles of incorporation, or, if
a voluntary association, the articles of association,
constitution and laws of the society and the application for
membership and medical examination, signed by the applicant,
and all amendments to each thereof, shall constitute the
agreement between the society and the member, and copies of
the same, certified by the secretary of the society or
corresponding officer, shall be received in evidence of the
terms and conditions thereof, and any changes, additions or
amendments to said charter or articles of incorporation, or
articles of association, if a voluntary association,
constitution or laws duly made or enacted subsequent to the
issuance of the benefit certificate shall bind the member,
and his beneficiaries, and shall govern and
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