Mays v. Sovereign Camp, W. O. W.

• Decision Date: 11 April 1925
• Citation: 271 S.W. 34
• Parties: MAYS v. SOVEREIGN CAMP, W. O. W. THOMAS v. SAME.
• Court: Tennessee Supreme Court

Page 34

271 S.W. 34

MAYS v. SOVEREIGN CAMP, W. O. W.

THOMAS v. SAME.

Supreme Court of Tennessee.

April 11, 1925.

Appeal from Chancery Court, Shelby County; F. H. Heiskell, Chancellor.

Separate bills by Florence Mays and by Mrs. Leslie Henrietta Thomas against the Sovereign Camp, Woodmen of the World. From a decree sustaining a demurrer to the bills, complainants appeal. Affirmed.

Frank S. Elgin, Wilson, Gates & Armstrong and Robert B. Goodwin, all of Memphis, for Mays and Thomas.

R. A. Matthews and A. J. Calhoun, both of Memphis, for appellee.

McKINNEY, J.

These causes were heard together and involve the same questions, to wit, the construction and validity of the following provision contained in the benefit certificates sued on herein:

"The absence or disappearance of the member herein named, whether admitted heretofore or hereafter from his last known place of residence and unheard of, shall not be regarded as any evidence of the death of such member, or give or create any right to recover any benefits on any certificate or certificates issued to such member or on account of such membership, and the absence of proof of his actual death aside from and unassisted by any presumption arising by reason of such absence or disappearance until the full term of his life expectancy at his age of entry, according to the Carlisle table of life expectancy, has expired and then only in case all assessments, dues, special assessments and all other sums now or hereafter required under the laws of the order be paid on behalf of such member within the time required until the expiration of the term of such life expectancy, and the conditions of this certificate shall operate and be construed as a waiver of any statute of any state or country and of any rule of the common law of any state or country to the contrary; in the event payments are not made as above provided, said member shall stand suspended and cannot be reinstated except in the manner as provided in the constitution and laws as to reinstatement of living member."

We are clearly of the opinion that the parties intended that the words "actual death" of the insured refer to his physical death as distinguished from his presumptive death. Otherwise this provision of the policy would be idle and useless.

Counsel for complainants have cited one case (Gaffney v. Royal Neighbors, 31 Idaho, 549, 174 P. 1014) that does support their contention; but in a number of the cases hereinafter cited a contrary view is expressed, and it may be said that the authorities generally treat the words "actual death" as in conflict with or antagonistic to the seven-year rule of presumption.

It is next insisted that this provision is against the public policy of the state, and therefore invalid.

In Wallace v. McPherson, 138 Tenn. 463, 197 S. W. 566, L. R. A. 1918A, 1148, this court said:

"Any person sui juris may make any contract with another which is not in violation of the federal or state Constitutions, federal or state statutes, some ordinance of a city or town, or some rule of the common law. There is no provision or rule of either that forbids such a contract or condition, unless the condition fall within that department of the common law which relates to contracts against public policy. Subtracting from the latter term all that concerns obligations contrary to constitutions, statutes, and municipal ordinances, and all known rules of the common law other than those applicable to public policy in its more general aspects, there remains only such matters as are contrary to the public morals, the public health, the public safety, or that can be reasonably held from any point of view as inimical to the public welfare."

In Hartford F. Ins. Co. v. Chicago, M. & St. P. R. Co., 175 U. S. 91, 20 S. Ct. 33, 44 L. Ed. 84, the court said:

"The power of courts to declare a contract void for being in contravention of sound public policy is a very delicate and undefined power, and, like the power to declare a statute unconstitutional, should be exercised only in cases free from doubt."

The only theory upon which it is argued that any agreement changing the common-law rule of presumed death, where a party has been absent seven years, is that this rule obtains in this state (Marquet v. Insurance Co., 128 Tenn. 226, 159 S. W. 733, L. R. A. 1915B, 749, Ann. Cas. 1915B, 677), and has therefore become the public policy of the state, and any contract undertaking to change same is invalid.

There are three classes of decisions dealing with this question.

In the first class it is generally held that, where the presumption of death from seven years' absence unheard of finds expression in statutory enactment, such enactment becomes the public policy of the state, and any contract contravening such policy will not be enforced. Modern Woodmen v. Hurford, 193 Ky. 50, 235 S. W. 24, 21 A. L. R. 1340; Cobble v. Royal Neighbors of America, 291 Mo. 125, 236 S. W. 306, 21 A. L. R. 1346; McCormick v. Woodmen of the World, 57 Cal. App. 568, 207 P. 943; Woodmen of the World v. Piper (Tex. Civ. App.) 222 S. W. 649; National Union v. Sawyer, 42 App. D. C. 475.

We have no such statute in this state.

In the second class, by the weight of authority, by laws doing away with the presumption of death from seven years' absence, passed after the insured had entered into the contract of insurance, although he undertook to be bound by subsequent laws, have been held invalid on the ground that they are unreasonable. Modern Woodmen of America v. White, 70 Colo. 207, 199 P. 965, 17 A. L. R. 393; Haines v. Modern Woodmen, 189 Iowa, 651, 178 N. W. 1010; Hannon v. Grand Lodge, 99 Kan. 734, 163 P. 169, L. R. A. 1917C, 1029; Samberg v. Knights of Modern Maccabees, 158 Mich. 568, 123 N. W. 25, 133 Am. St. Rep. 396; Boynton v. Modern Woodmen of America, 148 Minn. 150, 17 A. L. R. 401, 181 N. W. 327; Garrison v. Modern Woodmen, 105 Neb. 25, 178 N. W. 842; Roblin v. Supreme Tent, 269 Pa. 139, 112 A. 70; Sovereign Camp, W. O. W., v. Robinson (Tex. Civ. App.) 187 S. W. 215; Sweet v. Modern Woodmen, 169 Wis. 462, 172 N. W. 143.

There is practically no conflict in the authorities to the effect that by-laws of fraternal insurance companies, which form a part of the policy, are enforceable against one sui juris who accepts them and agrees to abide by them, provided they are reasonable.

In the third class it is held that the common-law rule invoked is one of evidence only, and that parties have a right, by contract, to change the rule, and by so doing they do not contravene the public policy of the state. Steen v. Modern Woodmen of America, 296 Ill. 104, 129 N. E. 546, 17 A. L. R. 406; Kelly v. Supreme Council, 46 App. Div. 79, 61 N. Y. S. 394; McGovern v. Brotherhood of Locomotive Firemen, 31 Ohio Cir. Ct. R. 243, which decision was affirmed by the Supreme Court of Ohio in a memorandum opinion, 85 Ohio St. 460, 98 N. E. 1128; Porter v. Home Friendly Society, 114 Ga. 937, 41 S. E. 45; Becker v. Interstate Business Men's Acc. Ass'n of Des Moines, Iowa (C. C. A.) 265 F. 508; Modern Woodmen v. Hurford, supra; Hartford F. Ins. Co. v. Chicago, M. & St. P. R. Co., supra.

As opposed to the decision of the third class, counsel have found only one case squarely in point. Gaffney v. Royal Neighbors, supra.

In the case of Fleming v. Merchants' Life Ins. Co. (Iowa) 180 N. W. 202, the court held the following by-law, enacted prior to the issuance of the policy sued upon, invalid, to wit:

"Disappearance or long-continued absence of the member, unheard of, shall not be regarded as evidence of death, or of any right to recover."

The court, in its opinion, said:

"In some of the cases the contract provides substantially that evidence of absence may not be considered to prove death until the expiration of the life expectancy of insured. In the instant case there is no time limit whatever. The plaintiff could continue to pay assessments, with the knowledge of the company, for 100 years, or indefinitely, and yet, in the language of the by-law and contract, such long-continued absence of the member, unheard of, shall not be regarded as evidence of death, or, still in the language used, `of any right to recover.' * * *

"We think the contract is in violation of the spirit of our insurance laws. The effect is to protect the insurer against an occasional fraudulent disappearance, and operates to defeat recovery by the beneficiary of the insured who has met death away from home or under circumstances to render identification of his body or proof of his death impossible. It not only protects the company against fraud but it as well defeats the beneficiary in some cases who is entitled to the benefits of the contract.

"Some members of the court think that the contract is unreasonable and against public policy for this reason, and that this is the better ground upon which to base the invalidity of the provision in question. Others of the court, including the writer, are of opinion that the stronger and better ground is that it unduly limits and deprives the court of the exercise of its functions to hear any evidence upon the only issue that could be in the case."

The court seemed to recognize a distinction between a by-law which limited the time in which death could be established by presumption and one in which there is no time limit whatever. The idea being that in one case the court is not completely ousted of jurisdiction, while in the other it is.

It appears that some members of the court based their decision upon the fact that the contract violated the spirit of the insurance laws of that state.

One member of the court dissented from the majority opinion.

That case is not a direct authority for complainants.

In our opinion, under the facts of these causes, the principle announced in the decisions of the third class is applicable.

This cause can be assimilated to that of our statute of limitations, which provides that actions on debt shall...