Mutual Reserve Fund Life Ass'n v. Beatty

• Decision Date: 13 February 1899
• Docket Number: 459.
• Citation: 93 F. 747
• Parties: MUTUAL RESERVE FUND LIFE ASS'N v. BEATTY.
• Court: U.S. Court of Appeals — Ninth Circuit

93 F. 747

MUTUAL RESERVE FUND LIFE ASS'N v. BEATTY.

No. 459.

United States Court of Appeals, Ninth Circuit.

February 13, 1899

This is an action at law brought by George W. Beatty, defendant in error (plaintiff below), as beneficiary in a certain certificate or contract of insurance issued by the plaintiff in error on the life of Edwin L. Smith, of San Francisco Cal. It is alleged in the complaint 'that on the 15th day of May, 1884, at the city of New York, state of New York said defendant made and issued its certificate of membership to one Edwin L. Smith, of the city and county of San Francisco, state of California, in consideration of certain matters and payments in said certificate mentioned, and hereby referred to, for the use and benefit of the plaintiff herein, George W. Beatty (creditor), by which said certificate said defendant insured the life of said Edwin L Smith in the sum of $4,000, payable to the plaintiff herein George W. Beatty, as his interest may appear, if living at the time of the death of said Smith, otherwise to the legal representatives of said Smith, within ninety days after receipt of satisfactory evidence to the said defendant of the death of said Smith during the continuance of said certificate, upon certain conditions in said certificate contained; that on the 10th day of December, 1890, at the city of Oakland, county of Alameda, state of California, said Edwin L. Smith died intestate, a resident of Alameda county, California; that said plaintiff, George W. Beatty, paid the admission fee, all dues for expenses, and all mortuary assessments mentioned in said certificate, as required by it to be paid, up to the 3d day of May, 1899, amounting in the aggregate to $1,013.07, and offered and was ready to pay all subsequent dues and assessments, but that said defendant willfully refused to receive the same, and said plaintiff gave to said corporation defendant immediate notice of the death of said Edwin L. Smith, and also on or about the 15th day of January, 1891, plaintiff gave and furnished to said corporation defendant, in writing, at its place of business in the state of New York, satisfactory evidence of the death of said Smith, * * * and requested payment to him of said sum of $4,000 on the 23d day of February, 1891; that the plaintiff herein, George W. Beatty, as a creditor of said Smith, had a valuable interest in the insurance of the life of said Edwin L. Smith at the time of effecting the said insurance, to wit, $5,000, and he ever since has had, and now has, such valuable interest, as a creditor of said Smith, and that there is now due, owing, and unpaid to said plaintiff, George W. Beatty, the sum of $1,013.07, for money so paid and expended by him as yearly dues and assessments, as hereinbefore set forth, with interest thereon at the rate of seven per cent. per annum, in addition to said $5,000 so owing to him as aforesaid, and that no part of which has been paid. ' The defendant, in its amended answer, admits that it issued the certificate mentioned in the complaint, but denies the other material allegations of the complaint, and alleges, among other things, that the certificate of membership of the said Edwin L. Smith, and all the rights of the said Edwin L. Smith, and of the plaintiff herein, became and were and are subject to the terms and provisions of the constitution and by-laws of the defendant association, all of which are referred to and made a part of the answer; that in and by said constitution and by-laws it was, among other things, provided as follows: 'On the first week day of the months of February, April, June, August, October, and December of each year, or at such other dates as the board of directors may from time to time determine, an assessment shall be made, upon the entire membership in force at the date of the last death, of the audited death claims prior thereto, for such a sum as the executive committee may deem sufficient to meet the existing claims by death; the same to be apportioned among the members according to the age of each member. A member failing to receive a notice of an assessment on the first week day of February, April, June, August, October, and December, for his share of the losses occurring during the time specified, it shall be his duty to notify the home office, in writing, of such fact. A failure to pay the assessment within thirty days from the first week day of February, April, June, August, October, and December, or within thirty days from the day of the date of such periods as may be named by the directors, shall forfeit his membership in this association, with all rights thereunder; and the certificate of membership shall be null and void. ' It is further alleged 'that on the first week day of April, 1889, to wit, April 1, 1899, an assessment or mortuary call of $39.12 was duly made by the defendant association upon the said Edwin L. Smith, under said certificate, and a due notice thereof according to the usual course of business of the defendant association, was on said day deposited and mailed in the post office of the city of New York, state of New York, with postage paid thereon, addressed to George W. Beatty, the plaintiff herein, at Los Gatos, Santa Clara county, California; that being the post-office address of the said Edwin L. Smith, and of the said plaintiff, upon the books of the defendant association. And this defendant alleges that the said Edwin L. Smith and the said George W. Beatty, the plaintiff, for more than thirty days after the giving of said notice as aforesaid, and for more than thirty days after the date of the same, failed and neglected to pay said assessment or mortuary call, or any part thereof, and said assessment or mortuary call is not, and never has been, paid, and by reason thereof said certificate is null and void, and became and was null and void prior to the death of the said Edwin L. Smith, and prior to May 3, 1899, to wit, from and after May 2, 1889, and that prior to May 3, 1889, to wit, from and after May 2, 1889, the said Edwin L. Smith ceased to be a member of the defendant association; that the dues for expenses, which by the terms of said contract were to be paid on or before the 6th day of May in every year during the continuance thereof, amounted to the sum of $8 for each year; that the dues upon said certificate for the year 1889, amounting to the sum of $8, became due and payable on or before the 6th day of May, in the year 1889, but that the said Edwin L. Smith and the said George W. Beatty, the plaintiff, failed and neglected to pay the amount of such dues, or any part thereof, and said dues are not, and never have been, paid, and by reason thereof said certificate is null and void, and became and was null and void prior to the alleged death of said Edwin L. Smith, and prior to May 8, 1889, and that prior to May 8, 1889, to wit, from and after May 7, 1889, the said Edwin L. Smith ceased to be a member of the defendant association, and by reason thereof said certificate is null and void, and became and was null and void prior to the date of the alleged death of the said Edwin L. Smith; that, upon and according to its information and belief, the said George W. Beatty, plaintiff, was not a creditor of the said Edwin L. Smith at the time the certificate of membership referred to in said complaint, and upon which this action has been brought and is now pending, was applied for.'

The trial of the cause was had before a jury. It appears from the testimony that the certificate in question was issued May 15, 1884, and the assessments levied thereon by the plaintiff in error prior to the assessment in controversy were 28 in number, and were designated as mortuary calls numbered 15 to 42, inclusive, amounting to $981.50. There were also dues for expenses amounting to the sum of $8 for each of the years 1884, 1885, 1886, 1887, and 1888, amounting to $40. These assessments and dues for expenses were paid by the defendant in error, the insured contributing a portion of the funds required to meet the demands as they came due. Mortuary call No. 43 was for $39.12, and was made on April 1, 1889, becoming due May 1, 1889. The dues for expenses for 1889, amounting to $8, were due on May 6, 1889. On May 3, 1889, the defendant in error tendered payment of both claims, in the sum of $47.12, to the local agent of the plaintiff in error at San Jose, Cal., who refused to accept the same on behalf of the company, but did receive the amount on deposit in the bank with which he was connected, giving a conditional receipt therefor, and reported the matter to the home office of the association, in the East. The association declared the contract of insurance forfeited by the failure of the defendant in error to pay mortuary call No. 43 within the period of 30 days provided in the notice.

The plaintiff (defendant in error here) was called as a witness on his own behalf, and testified, among other things, that he was the party named in the certificate of insurance as the beneficiary; that he had paid six calls or assessments after they became due, to wit: 'Call No. 16 was paid 34 days late; that is, it was received in New York 34 days after it should have been,--the health certificate being given. Call No. 17 was received 9 days after time. I paid them directly to the company in New York. Call No. 20 was paid 5 days late, direct to New York, with a common receipt. Call No. 25 was paid to the home office, in New York, 49 days late. Call No. 42 became due, under the notice, March 4, 1889. I paid it on March 20, 1889. The notice of call No. 43 reached me the first week in April. Five notices were received before the money was received in New York of a subsequent assessment. As to call No. 43, I was in Los Gatos at the time, and on...