Nat'l Masonic Acc. Ass'n v. Burr

• Decision Date: 05 March 1895
• Citation: 62 N.W. 466,44 Neb. 256
• Parties: NATIONAL MASONIC ACC. ASS'N v. BURR.
• Court: Nebraska Supreme Court

44 Neb. 256

62 N.W. 466

NATIONAL MASONIC ACC. ASS'N

v.BURR.

Supreme Court of Nebraska.

March 5, 1895.

Syllabus by the Court.

1. The charter and by-laws of the National Masonic Accident Association of Des Moines, Iowa, examined, and held:

(1) That the object of the association is to furnish its members the advantages of accident insurance.

(2) That the association had no capital and no capital stock; that the only moneys it ever has are derived from the membership fees and dues and assessments paid by its members.

(3) That these moneys are used for the purpose of paying the operating expenses of the association, and paying the weekly and other benefits due to its members.

(4) That the association is purely a mutual institution, only members of the Masonic fraternity being eligible to membership.

(5) That the association does not issue policies as that term is generally understood, but issues to each of its members a certificate of membership.

(6) Its members are divided into classes, according to the hazard of the occupation they pursue.

(7) The scheme contemplated by the association is the payment of a certain sum per week for a specified time to such of its members as may be temporarily injured; and, if such injury proves to be permanent, or results in death, then the payment to such member or his beneficiary of a gross sum of money.

2. The certificate of membership provides: “This association does not agree to pay any certificate holder or beneficiary * * * a greater sum than is realized by said association from one assessment of two dollars, made and collected upon all members assessable at the date of the accident.” “To keep this certificate in force, all assessments and dues must be paid within thirty days of the date of the notice from the secretary calling therefor.” The by-laws of the association provide: “Information of the amount of each required payment and of the time when the same is to be paid shall be given by the secretary to each member by mailing a written or printed notice to him, postage prepaid, at his last given post-office address, at least thirty days prior to the maturity of such payment. * * * And it shall thereupon be the duty of each member to promptly pay the same to the secretary at his office in Des Moines, Iowa, on or before such time of maturity. If any member shall fail to pay any required payment on or before the day so fixed, his certificate and membership shall cease to be of any force and validity, and can only be revived by payment thereof. No indemnity or benefits of any kind shall be paid for or on account of any injury received between the time when the delinquent payment became due and the time when the same is received by the secretary at his office. No suit shall be brought upon any claim disputed before the same shall have been arbitratedby a committee, and the award of such committee shall be final and conclusive upon the claimant and the association.” On the 14th of February, 1891, the board of directors of the association made an assessment of three dollars upon each of its members. This assessment matured on the 1st day of April, and notice thereof was duly given to George F. Burr, who was a member of the association. Burr did not pay his assessment on or prior to April 1st. About noon of April 27, 1891, Burr was injured, and made a claim against the association for the weekly benefits which he alleged he was entitled to be paid as the result of his injury and his membership. The association refused to pay the claim, and Burr brought this suit. The evidence tended to show that on the 25th of April, 1891, Burr mailed a letter at York, Neb., directed to the association in Des Moines, Iowa, containing his check for three dollars, to pay the assessment due April 1st, and that ordinarily such letter would reach the association on the 26th or by the morning of the 27th of April. On the other hand, there was evidence which tended to show that this check was received by the association on the morning of the 29th of April, or not earlier than the afternoon of the 27th of April. On the trial the association requested the district court to instruct the jury that: “Plaintiff having not paid such assessment at or before maturity, his certificate ceases to be in force and effect until the payment actually reached the secretary at his office in Des Moines, and plaintiff's certificate of membership only becomes valid from the time said secretary received such payment at his office in Des Moines. If you find from the evidence that the payment was received by the secretary at his office in Des Moines previous to the time that the accident happened to the plaintiff, then the plaintiff is entitled to recover; but, if the said payment did not reach the secretary's office in Des Moines until after said accident happened to the plaintiff, then the plaintiff is not entitled to recover in any sum whatever.” This instruction the court refused. Held:

(1) That it was not for the district court to say whether the evidence established the fact that the assessment remitted by Burr to the association was received by it prior to the time he was injured. That was a question which the jury, and the jury alone, had a right to determine.

(2) Burr's failure to pay the assessment due the 1st day of April on or before that date did not oust him from membership in such association, but suspended his right to claim indemnity from the association for an injury received after the assessment became due and before such payment was made.

(3) That, the nature and objects of the association considered, the retention by the association of the remittance made by Burr was not evidence that the association waived Burr's default.

(4) That the court erred in refusing to give the instruction.

3. On the trial the association requested the court to instruct the jury that before Burr could maintain an action upon the claim he must have procured it to have been arbitrated by a committee of arbitration, as provided by the articles of incorporation of the association; that such arbitration was a condition precedent to the right of Burr to maintain the suit. This instruction the district court refused. Held:

(1) That the ruling of the district court was correct.

(2) Whatever may be the rule elsewhere, it is the firmly established doctrine here that if parties to a contract agree that, if a dispute arises between them, such dispute shall be submitted to arbitration, refusal to arbitrate or no arbitration is not a defense to an action brought on such contract by one of the parties thereto, as the effect of such agreement is to oust the courts of their jurisdiction, and is contrary to public policy and therefore void.

4. Insurance Co. v. Bean (Neb.) 60 N. W. 907, and cases there cited, and Insurance Co. v. Bachelder, 49 N. W. 217, 32 Neb. 490, followed and reaffirmed. Id., 57 N. W. 996, 39 Neb. 95.

Error to district court, York county; Bates, Judge.

Action by George F. Burr against the National Masonic Accident Association of Des Moines, Iowa. Judgment for plaintiff, and defendant brings error. Reversed.

Merton Meeker and Clark Varnum, for plaintiff in error.

Sedgwick & Power, for defendant in error.

RAGAN, C.

The National Masonic Accident Association, hereinafter called the “Association,” is a corporation organized under the laws of the state of Iowa, and domiciled in the city of Des Moines, in said state. The object of the association is to furnish its members the advantages of accident insurance. The association has no capital and no capital stock. It is purely a mutual institution. Only members of the Masonic fraternity can become members of the association. The association does not issue policies as that term is generally understood, but issues to each of its members a certificate of membership. The members are divided into classes, according to the hazard of the occupation pursued by them. The scheme contemplated by the association is the payment of a certain sum per week for a specified time to such of its members as may be temporarily injured, and, if such injury proves to be permanent, or results in death, then the payment to such member or his designated beneficiary of a gross sum of money. The certificate of membership issued by the association provides: “This association does not agree to pay to any certificate holder or beneficiary * * * a greater sum than is realized by said association from one assessment of two dollars made and collected upon all members assessable at the date of the accident.” The only money or capital that the association ever has is derived from membership fees and dues paid by and assessments made on its members; and these moneys are used for the purposes of paying the operating expenses of the association and paying the weekly or other benefits due to its members. The certificate of membership also...