Locomotive Engineers' Mut. Life & Acc. Ins. Ass'n v. Hughes

• Decision Date: 20 December 1917
• Docket Number: 8 Div. 453
• Citation: 77 So. 352,201 Ala. 58
• Parties: LOCOMOTIVE ENGINEERS' MUT. LIFE & ACCIDENT INS. ASS'N v. HUGHES.
• Court: Alabama Supreme Court

77 So. 352

201 Ala. 58

LOCOMOTIVE ENGINEERS' MUT. LIFE & ACCIDENT INS. ASS'N v. HUGHES.

8 Div. 453

Supreme Court of Alabama

December 20, 1917

Appeal from Circuit Court, Jefferson County; E.C. Crow, Judge.

Action by Mrs. Jennie B. Hughes against the Locomotive Engineers' Mutual Life & Accident Insurance Association. From a judgment for plaintiff, defendant appeals. Reversed and remanded.

Stokely Scrivner & Dominick, of Birmingham, for appellee.

McCLELLAN J.

The plaintiff, appellee, was accorded a judgment aggregating $4,500, and interest, in an action upon three benefit certificates, of which this one is an example:

"Organized December 3, 1867. Incorporated March 1, 1894. Locomotive Engineers' Mutual Life and Accident Insurance Association. Certificate of Membership and Policy of Life Insurance. No. 69,728. Policy $1,500.00. This certifies that L.D. Ponder was admitted a member of this association this third day of Sept., 1905. Cleveland, O., Sept. 22, 1905. W.E Futch, President. H.M. Shay, Gen. Secy. & Treas. All payments or benefits that may accrue or become due by virtue of this policy will be payable to Mrs. Jennie B. Ponder, wife, or his lawful heirs, which cannot exceed the amount the association shall be able to pay from one assessment. Any member of this association, neglecting or refusing to pay any assessment when ordered as provided in the by-laws or being expelled one year from the Brotherhood of Locomotive Engineers, shall forfeit all right and title to membership, and be debarred from further participation in this Insurance, or benefits arising from the same. For the benefit of the Brotherhood of Locomotive Engineers."

Following rulings adverse to the defendant on demurrers to defendant's pleas, it appears from the judgment entry that the defendant pleaded "the general issue, in short by consent, with leave to give in evidence any testimony material to its defense as if specially pleaded, with the same privilege to plaintiff as to replication. ***" The defendant offered to introduce in evidence the intestate's applications for certificates of insurance and a part of the by-laws referred to in the quoted benefit certificate. The court declined to admit these documents in evidence, upon the ground that they were not parts of the contract of insurance, because their contents were not "plainly expressed in the policy issued thereon," as provided in the following pertinent excerpt from Code, § 4579:

"No life, nor any other insurance company, nor any agent thereof, shall make any contract of insurance, or agreement as to policy contract, other than is plainly expressed in the policy issued thereon."

This ruling of the court was induced by the authority afforded by our decision in the case of Brotherhood of Locomotive Engineers v. Milner, 193 Ala. 68, 69 So. 10. It was there held that the above-quoted provision of section 4579 of the Code of 1907 was applicable to fraternal benefit societies insuring members under the assessment plan purely. The holding in the Milner Case was directly induced by the announcement of this court in National Union v. Sherry, 180 Ala. 627 632, 61 So. 944. Upon a reconsideration of the question by the full bench, the court is of the opinion that the quoted provisions of section 4579 are not applicable to a mutual association insuring its members without profit and through the assessment plan. Our statute law has all along accorded separate treatment to corporations engaging in the business of selling insurance as a commercial enterprise from that...