Mutual Aid Union v. Wadley

• Decision Date: 16 October 1916
• Docket Number: 190
• Citation: 188 S.W. 1168,125 Ark. 449
• Parties: MUTUAL AID UNION v. WADLEY
• Court: Arkansas Supreme Court

188 S.W. 1168

125 Ark. 449

MUTUAL AID UNION v. WADLEY

No. 190

Supreme Court of Arkansas

October 16, 1916

Appeal from Greene Circuit Court, First Division; W. J. Driver Judge; reversed.

STATEMENT BY THE COURT.

Appellee was the beneficiary in a certificate of membership held by his wife, Fannie Wadley, in the appellant. The appellant was a corporation engaged in the insurance of its members. Upon the death of his wife appellee instituted suit against appellant for the sum of $ 225.00, alleged to be due on the certificate or policy issued by the appellant to the wife of the appellee.

Appellee alleged the issuance of the certificate, the death of his wife, and compliance with the terms of the certificate and the by-laws of the company, on the part of his deceased wife and refusal of the company to pay, and prayed for judgment.

Appellant admitted the execution of the certificate, and that appellee was the beneficiary named therein, but denied appellee's right to recover, on the ground that his wife had failed to pay the assessment levied against her as provided in the contract of insurance, thereby permitting her certificate of membership to lapse and become void.

In the application made by the wife of the appellee to the company among others are the following provisions:

"The assessment shall begin at 50 cents and graduate one cent per month for the first eighty months of the life of the certificate when it reaches $ 1.30, which is named as the maximum assessment which can be made on any one death loss. Should the applicant fail to pay an assessment the certificate will lapse and become void."

"It is understood that the Secretary of the Mutual Aid Union is to notify said applicant by ordinary mail, to the address herein stated, of any death occurring, which will make applicant liable for assessment, and of the proper amount of the assessment due thereon, and prompt payment of same must be made within 15 days to the home office."

"It is hereby provided and mutually agreed that this application shall be considered as part of the contract for membership and should this application be accepted and the certificate issued thereon, I hereby accept the by-laws and regulations with all amendments governing the Mutual Aid Union."

Appellee testified, among other things, as follows: "I certainly did pay every assessment that I ever had any notice of. I did not mean for my wife to go suspended," that no notice ever came to his house of the assessment of February, 1914 the non-payment of which appellant alleged caused the lapse of the policy; that he did not get such notice.

The testimony on behalf of the appellant was substantially as follows: The company kept a card record that was a part of its system. A specially prepared case, holding 1000 cards, was used. The cards were numbered from 1 to 1000, consecutively. The case was arranged so that each card was put in its place according to number, from 1 to 1000. When notice is mailed the cards are marked up, showing the amount of the assessment. After the cards are marked, the employee in charge takes the assessment notices and from each card the notice is mailed out. The usual custom was to first address the envelope, then fill out the notice to place in the envelope, then pass it and turn to the next card. The notices asked for remittance within 15 days. At the expiration of 15 days all payments that have been made are noted on the cards. The payments are also marked on a tally sheet which has 1000 numbers on it. The date and the number of the certificate and the amount are put on that tally sheet, thus making a double check. At the end of 15 days the employees go through these cards and take out all that have not paid. All that are not credited are turned over to another set of clerks who issue a second notice, and the second notices are handled in the same way as the first, and these second notices state the exact date on which the membership certificate will become lapsed and void. At the expiration of the second notice the clerks go through these cards again, and all that have not paid are taken out and placed in the record of lapses, and their places are filled with other members. If the members fail to remit after this second notice has been given then they are no longer members of the Mutual Aid Union; they are dropped from the roll.

The notices of assessment are sent out by the office force. The secretary's name is signed to them. The president orders the assessment made, and turns them in to the department handling the notices to send out the assessments. The president ordered the department to notify Fannie Wadley that a certain amount was due in the usual way. The president did not write the notices, but it was a part of his duty to have the assessments made and to have the living members notified of such assessments. The president did not handle the notices in person, but had supervision of that department of the company's work, and the notices of assessment were sent out under his authority and instructions.

After testifying to the above method of keeping the record of the standing of the members, the president of the company further testified that he made an investigation of all records and the records showed that the notices were mailed out to Mrs. Wadley and that the assessment was not paid. Some notices that are mailed out are returned unclaimed. When a notice is sent out it is put in an envelope with a return of the company on it. When the unclaimed notices come back to the office they are always preserved in the returned envelopes. In the case of Mrs. Wadley there were no returned envelopes.

Witness stated that an assessment was made against Mrs. Wadley's certificate, No. 22, on which this suit was instituted, in February, 1914. Witness introduced in evidence, which was made an exhibit to his testimony, a duplicate record made up from the first and second notices that were given her, which showed that on February 19, 1914, assessment No. 2 in Circle 22 was levied, and that this assessment was not paid by Mrs Wadley, and that under...