Olson v. Honor
| Citation | 100 Minn. 117,110 N.W. 374 |
| Parties | OLSON et al. v. COURT OF HONOR. |
| Decision Date | 01 February 1907 |
| Court | Supreme Court of Minnesota (US) |
OPINION TEXT STARTS HERE
Appeal from District Court, Meeker County; Gorham Powers, Judge.
Action by Paul Olson and others against the Court of Honor. From an order denying defendant's motion for judgment notwithstanding the verdict or for a new trial, it appeals. Affirmed.
A by-law of the defendant at the time it issued its benefit certificate here in question provided, in effect, that it would not pay the benefit of a member who committed suicide, whether sane or insane, unless he was at the time under treatment for insanity. The right to change its by-laws was reserved by the defendant. After the certificate was issued and before the death of the member the defendant amended the by-law, so as to limit the benefit in case of suicide to 5 per cent. of the face of the certificate for each year the member ‘shall have been continuously a member of the society.’ Held, that the general consent and agreement of a member of a mutual fraternal benefit society in his application and certificate to be bound by any changes in the constitution, by-laws, and rules of the society that it may enact in the future are subject to the implied condition that they must be reasonable, and that the change in the defendant's by-law in this case was unreasonable and void as to then existing members.
Section 5662, subd. 4, Gen. St. 1894, relating to the testimony of a physician without the consent of his patient, is for the protection of the patient, and he may waive it, and as a general rule those who represent him after his death may also waive the privilege for the protection of interests which they claim under him. Chas. G. Laybourn and William B. Risse, for appellant.
E. P. Peterson and Foster & Stites, for respondents.
On October 3, 1901, the defendant, a mutual fraternal benefit association, issued its certificate of membership to Lena Olson, wife of the plaintiff herein and the mother of the other plaintiffs. This certificate provided for the payment from the benefit fund of the association at the death of Mrs. Olson $1,000 to her husband and children. In and by the certificate it was expressly agreed that the application for membership, the medical examination, the constitution, laws, and rules of the association, and the certificate should constitute the complete and only contract between the parties, and, further, that the member should strictly comply with the constitution, laws, and rules then in force or thereafter to be enacted or adopted. When the certificate was delivered to and accepted by Mrs. Olson, a by-law of the association then in force provided that: ‘This order will not pay the benefits of members who commit suicide, whether sane or insane, except it be owing to delirium resulting from illness, or while the member is under treatment for insanity, or has been judicially declared to be insane; but, in all cases not within such exception, the amount of money contributed to the benefit fund by such members shall be returned and shall be paid to the beneficiary out of said fund in lieu of the benefit.’ The application for membership contained this provision: ‘I further understand and agree that the laws of the order now in force, or hereafter enacted, enter into and become a part of every contract of indemnity by and between the members of the order and govern all rights thereunder.’ In place of the original by-law the association, on July 1, 1903, adopted the following: ‘If a benefit member commits suicide, whether sane or insane, voluntary or involuntary, there shall be payable to the beneficiary entitled thereto 5 per cent. of the face of the certificate for each year he shall have been continuously a member of the society, and after 20 years of continuous membership the certificate shall be payable in full.’ Mrs. Olson died May 21, 1904. The benefit was not paid, and this action was brought to recover the amount thereof. The defense was that she committed suicide and that the last by-law adopted ruled the case. The trial court held that the by-law in force when the certificate was issued governed the case, and instructed the jury that the plaintiffs were entitled to recover the full amount, unless Mrs. Olson committed suicide: but, if she did, then the defendant was entitled to a verdict, unless the jury further found that she was at the time under treatment for insanity. The jury returned a general verdict for the plaintiff's for the full amount claimed. The defendant appealed from an order denying its motion for judgment notwithstanding the verdict or for a new trial.
1. The first question is whether the by-law which was in force when the certificate was issued or the one in force at the time of Mrs. Olson's death is to be taken as the basis for determining the rights of the parties. The certificate, in connection with the by-law in force at its date, in legal effect insured the member against death by suicide while under treatment for insanity; that is, in case of death caused by unintentional self-destruction by the insured while under treatment for insanity, the beneficiary was entitled to receive the full face of the certificate, but under the new by-law, in case of the death of the insured from such cause, the right of the beneficiary to recover was limited ‘to 5 per cent. of the face of the certificate for each year the insured shall have been continuously a member of the society.’ Was this change authorized by the provisions of the contract providing for a change in the by-laws? It is the contention of the defendant that it was by virtue of the provisions of the original contract that the society might change its by-laws and that the members should be bound thereby. It is obvious that such a provision must receive a reasonable construction. It would be unreasonable to construe it as giving the society plenary power to change its by-laws in any manner it might elect; for, if such construction were to obtain, then the original contract would be simply one to the effect that the society would pay the beneficiary, in case of the death of the member, in accordance with the terms of the contract or in accordance with such new, other, or further contract as it might elect thereafter to make for the parties. It seems clear that when the member-that is, the insured-gives in advance his general consent to a change in the by-laws, and agrees in his certificate to abide by all the laws thereafter enacted by the society, he does not intend thereby that the society shall have the power to impair in essential particulars the contract for the payment of a specific sum to his beneficiary which it agrees by its certificate to pay; or, in other words, he does not consent that the society may make, without consulting him, a new contract for both parties. It has accordingly been held by this court, in accordance with the weight of judicial authority, that the general consent and agreement of a member of a mutual fraternal benefit society in his application and certificate to be bound by any future changes in the constitution, by-laws, and rules of the society that it may enact in the future are subject to the implied condition that they must be reasonable. Thibert v. Knights of Honor, 78 Minn. 448, 81 N. W. 220,47 L.R.A. 136, 79 Am. St. Rep. 412;Tebo v. Royal Arcanum, 89 Minn. 3, 93 N. W. 513.
2. This brings us to the pivotal question: Was the change in the by-law in this particular case reasonable? In the first case cited the insured, at the time he became a member of the order, was entitled to written notice of the number and amount of his assessments. The by-law providing for such notice was, without his knowledge or consent, thereafter amended so as to require the payment of the assessment without such notice, and, if not paid within the time limited, the defaulting member should stand suspended. In the other case the member, at the time he became such, had the right to engage in the occupation of freight brakeman; but by an amendment to the by-laws of the society, without his knowledge or consent, this right was taken from him. It was held in each case that the amendment to the by-laws was...
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