Loyd v. Modern Woodmen of America

• Decision Date: 16 May 1905
• Parties: LOYD, Respondent, v. MODERN WOODMEN OF AMERICA, Appellant
• Court: Missouri Court of Appeals

87 S.W. 530

113 Mo.App. 19

LOYD, Respondent, v. MODERN WOODMEN OF AMERICA, Appellant

Court of Appeals of Missouri, St. Louis

May 16, 1905

Appeal from Stoddard Circuit Court.--Hon. J. L. Fort, Judge.

REVERSED.

STATEMENT.

The suit is to recover the amount ($ 2,000) on a benefit certificate issued by defendant on the life of James W. Loyd for the benefit of plaintiff, Loyd's wife. The petition is in the usual form and alleged that defendant is a fraternal beneficiary society incorporated under the laws of the State of Illinois and authorized to do business in the State of Missouri. The answer admits and also alleges that defendant is a fraternal beneficiary society incorporated under the laws of the State of Illinois and duly licensed to do business in the State of Missouri; admits the execution of the benefit certificate issued and filed with the petition admits that plaintiff is the beneficiary named in the certificate and that she bore the relation of wife to Loyd admits the death of Loyd on April 3, 1901, and that proofs of loss were duly furnished and admits that it refused to pay the loss. For an affirmative defense the answer alleged, in substance, that the application of Loyd for insurance and the by-laws of the order were expressly made a part of the contract of insurance and that defendant relied upon the truth of Loyd's representations in his application for insurance. That in said application is the following statement:

"I have verified each of the foregoing answers and statements from 1 to 35 inclusive, adopted them as my own whether written by me or not, and declare and warrant that they are full, complete and literally true, and I agree that the exact literal truth of each shall be a condition precedent to any binding contract issued upon the faith of the foregoing answers. I further agree that the foregoing answers and statements, together with the preceding declaration, shall form the basis of the contract between me and the Modern Woodmen of America, and are offered by me as a consideration for the contract applied for, and are hereby made a part of any benefit certificate that may be issued on this application, and shall be deemed and taken as a part of such certificate; that this application may be referred to in said benefit certificate as the basis thereof; and I further agree that if any answer and statement in this application is not literally true, or if I shall fail to comply with and conform to any and all of the laws of said Modern Woodmen of America whether now in force or hereafter adopted, that my benefit certificate shall be void."

The answer proceeds:

"Defendant says that at item 17 in said application the said James W Loyd was asked the question 'Are you now of sound body mind and health, and free from any disease or injury,' and he, the said James W. Loyd, answered, stated and warranted, 'Yes.' Defendant avers that under the form of the contract applied for in said application, said answer and statement constituted a continuing warranty, and defendant avers that said statement and warranty by James W. Loyd was not true at the time of the attempted delivery to him of the benefit certificate as alleged in plaintiff's petition. Defendant avers that the condition of health certified to and warranted by said James W. Loyd in his answer to said question did not continue as so warranted to the completion of the contract applied for in said application, and defendant avers the fact to be that no delivery of the benefit certificate herein sued on was ever made to the said James W. Loyd, while in the condition of sound health so stated and warranted to defendant by him in said application."

For further defense, the answer alleged that at the time the application was made, the following by-laws of the society were in force:

"Sec. 24. Upon receipt of the benefit certificate, the local clerk shall notify the candidate, and he shall be adopted by the camp at the next or some regular or special meeting occurring at the camp hall, within sixty days after the issuance of such certificate, but such certificate shall not be of force until said adoption ceremony shall have been performed.

"Sec. 33. The liability of this society for the payment of benefits upon the death of a beneficial member shall not begin until he shall have been adopted, nor until he shall have performed all acts and complied with all of the requirements prescribed in these laws, and shall have taken the obligations prescribed in the ritual, nor until the acts herein prescribed for the local camp shall have been fully complied with by it, nor until the application shall have been duly approved by the local and head physicians and a benefit certificate issued and delivered to the applicant while in good health."

It is also alleged "that the said application, executed and delivered as aforesaid by said James W. Loyd, contained, among other things, the following:

"'I fully understand the objects, organization, mode of government and laws of this society, and particularly that part of the laws defining the qualifications for, and the restrictions upon its membership. * * * I further understand and agree that the laws of this society now in force or hereafter enacted enter into and become a part of every contract of indemnity by and between the members and the society, and govern all rights thereunder.'

"Defendant avers that the said James W. Loyd was never adopted into defendant's society, and that he had not performed all acts and complied with all the requirements prescribed in the by-laws of defendant society, and had not taken the obligations prescribed in the ritual, and that all the acts prescribed in defendant's said by-laws for the local camp had not been fully complied with as to said James W. Loyd, and that said benefit certificate was never delivered to James W. Loyd, while he, the said James W. Loyd, was in sound body and health, or in accordance with, or pursuance of, the by-laws of defendant order."

When the case was called for trial, plaintiff, by permission of court, over the objection of defendant, amended her petition by striking out the words "as a fraternal benefit association," and filed an amended reply wherein she denied that defendant is a fraternal benefit society but alleged it is an insurance corporation, organized under the laws of the State of Illinois, approved July 13, 1883, for the purpose of furnishing life insurance or pecuniary benefits to the wives, orphans, heirs, relatives and devisees of deceased members or for accident or permanent disability indemnity to members thereof; denied specifically the new matter pleaded as defenses to the action; alleged that Loyd was a member of the local camp whose officers were the agents of defendant and that these officers, by their conduct, waived the formal adoption of Loyd into the order before delivering to him the benefit certificate sued on, and pleaded certain conduct of the officers of the order as estopping defendant to plead the special defense set forth in its answer.

Plaintiff recovered judgment for the full amount of the certificate. Motions for new trial and in arrest were filed and by the court overruled, whereupon defendant appealed to this court.

There is practically no conflict in the evidence adduced on the trial. It shows that James W. Loyd made application for membership in local camp No. 8229 of the defendant order; that his application was voted on by the local camp and he was duly elected to become a member; that his application for a benefit certificate was also duly made and forwarded to the head camp of the order at Rock Island, Illinois, where it was examined by the proper officers of defendant and the certificate prepared and executed by the proper officers of defendant and forwarded to the clerk of local camp No. 8229 to be delivered to Loyd when he should be adopted into the camp; that after the favorable vote on the application of Loyd, he presented himself at a stated meeting of the local camp for adoption or initiation. No quorum being present at the time, he could not be adopted and an adjourned meeting to a future date for his adoption was set. The camp met pursuant to adjournment, but Loyd was not able to be present on account of the illness of himself and children.

The laws of the order provide that before benefit certificates can become effective, they must be signed by the consul and clerk of the local camp as well as by the member. On March 27 or 31, (the evidence is not clear on which of these dates) V. V. Randol, the consul of the local camp and the clerk, signed the certificate and on Sunday, March 31, it was handed by the clerk of the local camp to a friend or neighbor of Loyd, with instructions to deliver it to him. This friend took the certificate to Loyd's house, a short distance in the country, and found Loyd sick in bed but able to sit up and sign his name to the certificate. Loyd signed the certificate and retained it in his possession until the third day thereafter when he died of pneumonia. Loyd had paid $ 1.10 to the society as dues, etc., to obtain the certificate. This amount was afterwards tendered to plaintiff by the society but she refused to accept it. The same tender was made in court after the suit was commenced and refused.

There is no substantial evidence that the local camp ordered or voted that the certificate should be delivered to Loyd before his adoption, but it is shown that three of the officers of the local camp, the consul, clerk and banker, agreed that as Loyd had been duly elected and his medical examination had been approved and as he had paid the required dues and had presented himself at a regular meeting of the camp for adoption at which there was no quorum, it was the...