Ordelheide v. Modern Brotherhood of America

• Decision Date: 15 July 1911
• Citation: 158 Mo. App. 677,139 S.W. 269
• Parties: ORDELHEIDE v. MODERN BROTHERHOOD OF AMERICA.
• Court: Missouri Court of Appeals

139 S.W. 269

158 Mo. App. 677

ORDELHEIDE v. MODERN BROTHERHOOD OF AMERICA.

St. Louis Court of Appeals. Missouri.

July 15, 1911.

1. INSURANCE (§ 788)—FRATERNAL BENEFIT INSURANCE—STATUTES.

A foreign corporation authorized to issue benefit certificates to the husband, wife, relative, legal representative, heir, or legatee of the member, which issues in the state a certificate, not authorized by Rev. St. 1909, § 7109, providing for the payment of death benefits to the families, heirs, blood relatives, affianced husband or wife, or to persons dependent on the member, is not within the exemption accorded to fraternal beneficiary associations, but is subject to section 6945, making the defense of suicide unavailable to life insurance companies.

2. INSURANCE (§ 691)—FRATERNAL BENEFIT INSURANCE—STATUTES.

The liability of a foreign corporation authorized to issue benefit certificates, which issues in the state a certificate payable to a person not within Rev. St. 1909, § 7109, is unaffected by the fact that it has received the statutory certificate of authority to do business in the state as a fraternal beneficiary association.

3. INSURANCE (§ 788)—FRATERNAL INSURANCE—BENEFICIARIES —"LEGAL REPRESENTATIVES."

The words "legal representatives," in a certificate issued by a foreign corporation authorized to issue benefit certificates, which recites that the amount thereof shall be paid to "legal representatives, related to the member as . . . ." do not include any of the persons specified in Rev. St. 1909, § 7109, providing that death benefits shall be paid to the families, heirs, blood relatives, affianced husband or wife of, or to persons dependent on, the member, but mean the executor or administrator of the member, and the liability of the corporation is that of a life insurance company, under section 6945, making the defense of suicide unavailable to life insurance companies.

4. COURTS (§ 231)—DECISION OF COURT OF APPEALS—TRANSFER TO SUPREME COURT.

Where a judge of the Court of Appeals dissents from a decision on the ground that it is contrary to decisions of the Supreme Court, the case must, as required by the Constitution, be certified to the Supreme Court for final determination.

Reynolds, P. J., dissenting.

Appeal from Circuit Court, Warren County; James D. Barnett, Judge.

Action by F. A. Ordelheide, administrator of Walter L. Leek, deceased, against the Modern Brotherhood of America. From a judgment for plaintiff, defendant appeals. Affirmed, and cause certified to the Supreme Court.

See, also, 226 Mo. 203, 125 S. W. 1105.

Ball & Sparrow, for appellant. Emil Roehrig, for respondent.

CAULFIELD, J.

This is an action brought by an administrator to recover the amount, with interest, of what plaintiff calls a life insurance policy and defendant calls a benefit certificate, issued by a fraternal benefit society, for $1,000. The plaintiff had judgment, and defendant has appealed.

The policy, or certificate, was issued to plaintiff's intestate, Walter L. Leek, and was payable to his "legal representatives, related to the member as ......" Defendant admits all matters essential to a recovery by the plaintiff, and relies solely for its defense upon the fact that the insured committed suicide; there being a stipulation in the application made by the insured, as well as in the by-laws of the defendant at the time the certificate was issued, that in that event the certificate would be void. It is conceded that the deceased came to his death by suicide, but there is no showing that he contemplated suicide at the time he made his application. In the absence of such showing, section 6945 of the Revised Statutes 1909, makes the defense of suicide unavailable to the defendant, unless, as it contends, it is, as to the certificate here sued upon, entitled to claim the exemption accorded to a fraternal beneficiary association by section 7109, which provides, among other things, that "payments of death benefits shall be to the families, heirs, blood relatives, affianced husband or affianced wife of, or to persons dependent upon, the member. Such association shall be governed by this article, and shall be exempt from the provisions of the insurance laws of this state."

The defendant is an Iowa corporation, doing business in this state by certificate from the Secretary of State, as provided by our statute. By the laws of Iowa (Acts 26th Gen. Assem. c. 21, § 3), under which defendant was organized, defendant is authorized to issue benefit certificates to the "husband, wife, relative, legal representative, heir or legatee of such member." The insured, in his application for the certificate sued upon, designated as the beneficiary his "legal representatives." The certificate states that its amount "shall be paid to legal representatives, related to the member as ....." It will thus be noted that, not only is the defendant authorized by the laws of Iowa to issue benefit certificates to a class not authorized by our law, i. e., legal representatives, but in this case it exercised that power within the confines of this state by making the certificate here sued upon payable to the "legal representatives" of the insured. The only question is whether, having issued a certificate not authorized by our statute, it can still claim the exemptions which our statute grants as a special privilege to those doing the kind of business prescribed. We have concluded that it cannot. There are different classes of insurers under our statutes. Some have the privilege of doing a more general business than others, and are therefore more heavily burdened by having read into every policy they issue section 6945 of the Revised Statutes of 1909, which forbids the defense of suicide, except upon the showing prescribed. Others, fraternal beneficiary associations, are allowed to do only a restricted insurance business, being limited to issuing policies or certificates to "the families, heirs, blood relatives, affianced husband or affianced wife of, or to persons dependent upon, the member." Because of this and other limitations they are specially privileged by being exempted from the general insurance laws. If their operations are not so limited, then they are not so privileged. It is only "such association" (i. e., those of the character and observing the limitations described in section 7109) which enjoy the privilege of being exempted.

An association may be a fraternal society, with lodge system, ritual, etc., but if it is issuing policies of a character not authorized by the statute it is not entitled to the special privileges given by the statute. State ex rel. v. Vandiver, 213 Mo. 187, loc. cit. 197 et seq., 111 S. W. 911. "It is not the nature of the society, but the terms of the contract in suit, which determines whether its exemption from the general statute shall apply in that case;" and if it executes a contract which the statute does not authorize it to execute it is, as to such contract, not entitled to the exemption. Wilson v. Amer. Benevolent Ass'n, 125 Mo. App. 597, 103 S. W. 109. Thus, in Toomey v. Supreme Lodge, 147 Mo. 129, 48 S. W. 936, as construed by our Supreme Court in State ex rel. v. Vandiver, supra, 213 Mo., loc. cit. 199, 111 S. W. 913, "it was held that the defense of suicide was unavailing, because, although the defendant was a fraternal beneficiary society, yet the policy sued on was an old-line policy of life insurance, and therefore subject to the general statute, and the defendant was liable as an old-line company would be;" and in Aloe v. Fidelity M. Life Ass'n, 164 Mo. 675, 55 S. W. 993, as likewise construed, "it was held that, although the defendant was chartered to do business only on the assessment plan, yet the policy it had issued in that case was not on that plan, but an old-line policy, and therefore the defendant was held liable as an old-line company." And the Kansas City Court of Appeals has held three times (twice in cases involving this very defendant) that a benefit certificate, made payable to the "legal representatives" of the insured, is without the exemption allowed to fraternal beneficiary associations under section 7109. Herzberg v. Modern Brotherhood of America, 110 Mo. App. 328, 85 S. W. 986; Wilson v. American Benevolent Ass'n, 125 Mo. App. 597, 103 S. W. 109; Kroge v. Modern Brotherhood of America, 126 Mo. App. 693, 105 S. W. 685. These cases are directly in point on the question here involved, and we approve the conclusions reached in them. In doing so we see no necessity and have no inclination for departing from our conclusion in the case of Armstrong v. Modern Brotherhood of America, 132 Mo. App. 171, 112 S. W. 24. In that case the beneficiary named was within the classes permitted by our statute, and the contract before us was fully authorized by the statute. There was no attempt there, as there is here, to issue a contract which is not exempted from the suicide provision of the insurance laws. In that case the contract was of the privileged class. In this one it is not. We held there that the limited authorized class was privileged by being exempt. We hold here that the unauthorized class is not privileged.

Nor can the fact that the defendant has received the statutory certificate of authority to do business as a fraternal beneficiary association affect the matter. Herzberg v. Brotherhood, supra.

We are not impressed by the suggestion that the designation "legal representatives" must be construed to mean, not the executor or administrator of the insured, but some one of the classes authorized by our statute. The words "legal representatives" must be construed to mean "executors or administrators" in the absence of anything showing a different intent. New York Life Ins. Co. v. Kansas City Bank, 121 Mo. App. 479, 97 S. W. 195; Walker v. Peters, 139 Mo. App. 681, 124 S. W. 35. Here there is a total absence of anything showing such different intent. There is not even a suggestion...