Newland v. Modern Woodmen of America

• Decision Date: 17 February 1913
• Parties: MARY L. NEWLAND, Respondent, v. MODERN WOODMEN OF AMERICA, Appellant
• Court: Kansas Court of Appeals

153 S.W. 1097

168 Mo.App. 311

MARY L. NEWLAND, Respondent, v. MODERN WOODMEN OF AMERICA, Appellant

Court of Appeals of Missouri, Kansas City

February 17, 1913

Appeal from Schuyler Circuit Court.--Hon. Nat. M. Shelton, Judge.

REVERSED.

Judgment reversed.

Benjamin D. Smith and Bailey & Hart for appellant.

T. L Buford, and Fogle & Fogle for respondent.

OPINION

JOHNSON, J.

This is an action on a death benefit certificate issued by defendant September 11, 1905, to Isaac H. Newland, a farmer living near Lancaster in Schuyler county. Plaintiff who is the beneficiary designated in the certificate was the wife of Newland whose death occurred at his home January 29, 1906. All dues and assessments had been paid by him but defendant on receipt of proofs of death denied liability. This suit followed and the cause pleaded in the petition is one founded on an ordinary policy of life insurance.

The substance of the affirmative defenses alleged in the answer is that defendant is a fraternal beneficiary society incorporated in the state of Illinois and authorized to do business in this State; that the certificate in controversy is not an ordinary policy of life insurance, but is a fraternal beneficiary contract containing an express stipulation against suicide and that the death of Newland was self-inflicted. This answer was not assailed by demurrer or motion and the affirmative defenses were put in issue in a reply filed by plaintiff. A jury was waived and at the beginning of the introduction of evidence by defendant, counsel for plaintiff objected to "any evidence to support the allegations of their answer because it does not state facts sufficient to constitute any answer to plaintiff's petition." The objection was overruled "for the present" and the court heard evidence of defendant offered in support of the affirmative defenses. At the close of all the evidence the court, at the request of plaintiff, gave a declaration of law to the effect that under the pleadings and evidence, plaintiff is entitled to recover and rendered judgment accordingly. All the declarations of law asked by defendant were refused and after unsuccessfully moving for a new trial and in arrest of judgment, defendant appealed.

An analysis of the rulings of the court on the declarations of law asked by the respective parties, discloses that the judgment is based on the conclusion that defendant failed to plead and prove all the elemental facts of a valid defense founded upon an exemption peculiar to a fraternal beneficiary certificate and, therefore, that the certificate in question should be regarded and treated as an ordinary policy of life insurance against the enforcement of which the defense of suicide is not available.

To be entitled to the benefit of the liberal laws and rules of construction pertaining to death benefit certificates issued by fraternal beneficiary associations, it devolved on defendant to plead and prove not only that it possessed the essential qualifications of such societies as prescribed and defined in section 7109, Revised Statutes 1909, but also that being incorporated in another state, it had been admitted to do business in this State in the manner provided in section 7112, Revised Statutes 1909. [Gruwell v. Knights and Ladies of Security, 126 Mo.App. 496, 104 S.W. 884.] Further defendant was required to plead and prove that during the life of the certificate in controversy it had conducted its business affairs in this State in compliance with the provisions of the statutes relating to such societies. That is to say, that it had been carried on for the sole benefit of its members and their beneficiaries and not for profit; that it had maintained a lodge system in this State with ritualistic form of work and representative form of government; that it had made and given effect to provisions for the payment of benefits in case of death and had provided for the payment of benefits and expenses from assessments or dues collected from its members.

As is well said by the St. Louis Court of Appeals in Thompson v. Royal Neighbors, 154 Mo.App. 109, 133 S.W. 146. "Even the certificate of incorporation or that of authority to do business in this state, are not conclusive of the character of the business done. That is to be determined, in part it is true by an examination of the certificate issued, but it also rests on proof of acts outside of even the certificates; proof of facts tending to show that the association is conducted as one which our laws define to be a benevolent association."

This rule has not been impaired by the later decision of the Supreme Court in Armstrong v. Modern Brotherhood, 149 S.W. 459, 245 Mo. 153, wherein it is held that the ruling of the insurance commissioner in granting a foreign association license to do business in this State, though not conclusive of the qualifications of such association to operate in this State under the provisions of our laws, is entitled to great weight "where there is a real doubt as to the meaning of the law," since it is "the construction of the law placed upon it by the executive officer of the State charged with the duty of enforcing it." In cases such as the one under consideration the issues of the right of such foreign association to do business in this State and of its compliance with the requirements of our laws, under proper pleadings are subjects of judicial inquiry and determination, and the burden is on the association to show affirmatively that it has fully complied with the laws and is entitled to the benefits they confer. We, therefore, hold that in order to avail itself of the defense of suicide, defendant was required to plead and prove, not only that prior to the issuance of the certificate it had been incorporated in the state of its origin as a fraternal beneficiary society and, as such, had been licensed to do business in this State, but that its business had been conducted for the sole benefit of its members and their beneficiaries and not for profit; that it had maintained a lodge system with ritualistic form of work and representative form of government, had made provision for the payment of death benefits and had procured funds for the payment of benefits and expenses from assessments or dues collected from its members.

Turning to the answer which is very voluminous, we find a sufficient compliance with the rules of pleading w...