Mutual Life Ins. Ass'n v. Rhoderick

• Decision Date: 14 March 1914
• Parties: MUTUAL LIFE INS. ASS'N OF DONLEY COUNTY v. RHODERICK.
• Court: Texas Court of Appeals

164 S.W. 1067

MUTUAL LIFE INS. ASS'N OF DONLEY COUNTY v. RHODERICK.

Court of Civil Appeals of Texas. Amarillo.

March 14, 1914.

Appeal from District Court, Donley County; Cecil Storey, Special Judge.

Action by Mrs. S. F. Rhoderick against the Mutual Life Insurance Association of Donley County and others. From a judgment for plaintiff, the defendant named appeals. Affirmed.

H. B. White and E. A. Simpson, both of Clarendon, for appellant. E. T. Miller, J. Marvin Jones, and L. C. Barrett, all of Amarillo, for appellee.

HENDRICKS, J.

This suit was instituted by the appellee, Mrs. S. F. Rhoderick, plaintiff, in the court below, against the Mutual Life Insurance Association of Texas, the Mutual Life Insurance Association of Donley County, Tex., and W. J. Parsons, to recover the sum of $1,000, alleged to be due her as the beneficiary under a certain benefit certificate insuring the life of her husband, B. J. Rhoderick.

Explanatory of the particular question involved upon the merits of this action, it will be sufficient to state that the Mutual Life Insurance Association of Donley county, against which judgment was finally rendered, assessed, at the death of a member of the association, each remaining member a stated amount for the purpose of paying the death claim; and during the progress of the business of the association there was a call upon all the members to pay a certain assessment on the death of a member, one J. C. Finger, of Hall county, Tex., amounting to the sum of $1 for each member. The association caused written notices to be mailed to Rhoderick, the insured, calling on him to pay said assessment within 15 days, or before November 19, A. D. 1912, or stand suspended. We gather from the record in this cause that, according to the by-laws, constituting a part of the contract of insurance, if a member failed to pay such assessment within 15 days after the notice, he stands suspended. It thereupon became the duty of the secretary of the association to notify such suspended member of the fact of his suspension, and, if the delinquent again failed to pay said assessment within 15 days after notice of such suspension, with a fine of 50 cents (which latter was a contribution to the local expense fund), the delinquent forfeited all rights as a member of the association. B. J. Rhoderick, after having received the first notice of assessment, and within the interim of this 30 days, was severely injured, dying within a short time after an accident suffered by him, and the assessment against Rhoderick to pay the death claim of Finger's beneficiaries was paid upon the twenty-sixth day by Mrs. Rhoderick, the beneficiary, and her son, at the home of the secretary. There was an unconditional tender and acceptance of the amount of the assessment, but the amount of the 50 cents, the penalty which became a part of the local expense fund, was not tendered. The secretary of the association had authority to write policies of insurance, to accept and receive premiums and, as we gather it from the record, practically had the active management of the business ostensibly under the direction of the board of directors. However, he did not consult them when he wrote policies or receipts for premiums or collected overdue assessments, and had the authority to do so without consulting them. We conclude that it was not the custom to collect the 50 cents fee, but the association reinstated the delinquent members of the association upon the payment of the amount due, otherwise than this 50 cents, and this was the universal rule, unless the secretary was put to the trouble of sending a registered notice, which was not done in this particular case.

The secretary testified: "I always received the money when it was offered me after the 15 days was up. That custom had prevailed since the organization of the company. As a rule, when the 15 days were up, I gave them a registered notice, but in some instances I did not, and, in those instances when I did not, I would accept the $1 when it was paid." When the secretary accepted the assessment tendered to him in this case, he issued an unconditional receipt therefor. When the money was tendered, the insured was in a precarious condition of health as the direct result of the serious accident mentioned, and there was nothing said to the secretary by Mrs. Rhoderick or her son as to the condition of the health of the insured, neither was there any inquiry made by the secretary in this respect.

The appellant contends, and so pleaded, that the beneficiary, in paying the death assessment which had been assessed against the insured, after the latter had received the fatal injury, and was in a dying condition, concealed the condition of Rhoderick from the defendant's secretary, W. J. Parsons, and the same constituted a fraud on the association; and, although there had been an acceptance of the arrearages, it was done so without knowledge of the real condition of the insured, and the latter was not reinstated.

Preliminary to the discussion of this cause upon its merits, we are met with this condition in the record: The pleading containing the exceptions and objections of appellant, the Mutual Life Insurance Association of Donley County, Tex., to the court's charge recites, "Now comes defendant Mutual Life Association of Donley County, Tex., in open court and prior to the reading of the main charge herein, and excepts thereto as follows;" and, omitting the four objections to the charge, which are unnecessary to set out as an aid in the discussion of the...