Olson v. Lodge

• Decision Date: 05 July 1921
• Citation: 184 N.W. 7,48 N.D. 285
• Parties: OLSON v. GRAND LODGE, A. O. U. W. OF NORTH DAKOTA.
• Court: North Dakota Supreme Court

48 N.D. 285

184 N.W. 7

OLSON

v.GRAND LODGE, A. O. U. W. OF NORTH DAKOTA.

Supreme Court of North Dakota.

July 5, 1921.

Syllabus by the Court.

The failure of a beneficial order to demand or secure from its insured member an application for war permit and the payment or refusal of an extra war premium provided by its regulations for its members engaged in military service, and the reception of regular assessments and lodge dues while knowing that the insured member was in the service do not constitute,for reasons stated in the opinion, waiver or grounds of estoppel.

The provisions in a beneficial certificate of insurance, which limits the liability of the beneficial order if the insured member shall engage in the occupation of a soldier in time of war, engage in military service in time of war, or shall enter in the service of the United States army, state grounds of a status and not of causation as a test, where no provisions otherwise indicate.

Appeal from District Court, Stark County; Crawford, Judge.

Action by Paul Olson against the Grand Lodge of the Ancient Order of United Workmen of North Dakota. Judgment for plaintiff, and defendant appeals. Reversed, with instructions.

Grace, J., dissenting.

J. J. Mulready, of Fargo, and W. F. Burnett, of Dickinson, for appellant.

L. A. Simpson, of Dickinson, and J. W. Lee, of Rhame, for respondent.

Statement.

BRONSON, J.

This is an action upon a policy of life insurance. Trial was held before the court upon stipulated facts. On April 6, 1918, the defendant, a fraternal beneficial association, issued its policy of $1,000 upon the life of the insured, payable to his father, the plaintiff. Then the insured was a blacksmith at Tolna, N. D., aged 21 and unmarried. The application for insurance, signed by the insured, contained an agreement that if he “should hereafter enter the occupation of” “a soldier in time of war” his membership in the order would become null and void, and the rights of himself and his beneficiary in life insurance waived; further, that he agreed to be subject at all times to all laws, rules, and regulations of the Grand Lodge, existing or thereafter to be adopted. Law 200 of the order provides that no person shall be admitted to membership who “is engaged in the occupation of” “soldier in time of war.” Law 222 provides that any member who shall hereafter enter any of the prohibited occupations enumerated in Law 200 shall forfeit his membership, and that “his beneficiary certificate shall become null and void without the action of any lodge or officer thereof.”

At the time when the policy was issued there was in force a regulation (adopted pursuant to a resolution of the advisory board of the Grand Lodge on September 1, 1917), which provided that any insured member, if he shall enter the service of the United States army may keep his insurance certificate in force and effect to the extent and upon the terms mentioned in three options: (1) That any member may, after first receiving a war permit, continue in force his entire insurance (not exceeding $2,000) upon the payment of an extra war premium of $50 per $1,000; (2) any such member, after first receiving a war permit, may continue his insurance (not exceeding $2,000) to the extent of 20 per cent. of the amount thereof; (3) any such member may avail himself of option 1 as to $1,000 and option 2 as to another $1,000.

It also provided that any such member desiring to avail himself of the options, shall make, within 30 days after he has been mustered into the service of the United States, application to the Grand Recorder for a war permit, upon blanks to be provided by the Grand Lodge, and that any such member who failed to avail himself of such options would forfeit all of his rights and benefits for himself or his beneficiary, notwithstanding the fact that he might continue to pay regular assessments and lodge dues and the Grand Lodge may have known of his entry into such service.

Attached to the beneficiary certificate, issued to the insured member, appears the following:

“This beneficiary certificate is issued and accepted upon the express consent of the member that in the event he engage in military, naval, submarine, or ærial service in time of war, without first obtaining a permit signed by the Grand Master Workman and Grand Recorder, and availing himself of one of the options adopted by the advisory board of said Grand Lodge at its meeting held in September 1, 1917 (numbered one, two or three) the amount payable upon this beneficiary certificate in the event of his death during such service shall be the reserve actually maintained by the Grand Lodge in respect to this beneficiary certificate.”

On June 23, 1918, the insured through the selective service law became a private in Company B, 313th Engineers, of our army, while at war with Germany. He went to France with his company. On July 29, 1918, Mr. Kiland (apparently a local officer of the order) wrote the plaintiff, as follows:

“I am in receipt of money order from you for $2.92 being for assessment No. 6 and lodge dues. This will serve as a receipt. Being that Henry is in the service he will have to sign the inclosed application for war permit, which they require to hold. As I do not know his address, I wish that you would send it to him and have him sign it and return to us as soon as possible.”

The insured did not present nor sign the application for a war permit. The extra war premium was not paid.

On October 8, 1918, the insured, while in France in a hospital under the control of our government, afflicted with influenza, died, without ever having been in the zone of hostilities. Up to the time of his death all regular and other assessments and dues upon his insurance certificate and due the lodge had been paid. On November 11, 1918, the advisory board of the Grand Lodge adopted a resolution which provided that the board recommended to the finance committee the allowance of all claims in behalf of members in the service who had not received war permits upon the basis of 20 per cent. under option 2.

The plaintiff duly submitted proofs of the insured's death, and demanded payment of $1,000. The defendant offered to pay $200 in settlement of the policy, and also judgment in such amount with costs. The plaintiff rejected the offer. Pursuant to an order of the trial court without findings, judgment for the full amount of the policy was entered. The defendant has appealed therefrom.

Decisions.

The sole legal question involved in this case is whether the insured at the time of his death was subject, concerning his insurance contract, to the regulations of defendant restricting and concerning liability upon engaging in the occupation of a “soldier in time of war,” upon engaging in military service, or upon entering the service of the United States army. The plaintiff contends that three months before the death of the insured the order had notice and knew that the insured was in the service; that it thereafter received payment of assessments and lodge dues of the insured, and thereby waived the rules and regulations upon which it relies, and is estopped from urging the same; that under the regulations providing for a war permit and the payment of an additional war premium the order made provisions for the signing of an application upon a blank to be furnished by it, and that thereunder it was incumbent upon the order to establish that an opportunity was accorded to the insured to make such application while the order continued to receive the payment of the insured's regular assessments and dues; that the record does not disclose that the death of the insured was occasioned by any increase of hazard through his entrance into military service or being a soldier in time of war; and that, pursuant to the decisions of this court in Myli v. American Life Insurance Co., 175 N. W. 631, 11 A. L. R. 1097, and Gorder v. Lincoln National Life Insurance Co., 180 N. W. 514, 11 A. L. R. 1080, the plaintiff is entitled to recover the entire amount of the insurance.

[1][2] When the insured, while a civilian, became a member of the order with beneficial insurance, there was then in force the rules of the order concerning the options concerning which he agreed, and notice whereof was attached to the beneficial certificate issued to him. This regulation, accepted by the insured, provided that if he should enter the service of the United States army or should engage in military service he could continue his entire insurance in force by the payment of an additional war premium of $50 and securing a war permit, or in force to the extent of 20 per cent. of the face thereof, upon securing a war permit only. The validity of that rule on grounds of public policy or otherwise is not attacked. It formed a part of the insurance contract. We are of the opinion that no acts of waiver nor such as to create an estoppel are shown. The order knew that the insured was in the service; it sent to his father, the beneficiary, a blank application for a war permit, with the request that it be sent to the insured for signature and return as soon as possible, the order stating that it did not know the address of the insured. The father, as the record shows, did pay one assessment and lodge dues for the insured; the stipulated facts do not show that the insured paid any of such assessments or lodge dues after he entered the service. The necessity of a war permit has been voluntarily waived by the order. The failure of the order to demand or secure from the insured direct the payment of the extra war premium, and this application for a war permit, did not operate to make option one effective, in the absence of express acts of waiver. Neither the insured nor his father, the beneficiary, made any attempt to exercise option 1. The assessments and lodge dues were paid so as to invoke and make applicable option 2. The order has not attempted to claim or enforce a forfeiture of the...