Parker v. Sovereign Camp of Woodmen of the World

• Decision Date: 26 June 1917
• Docket Number: No. 2009.,2009.
• Citation: 196 S.W. 424
• Parties: PARKER et al. v. SOVEREIGN CAMP OF WOODMEN OF THE WORLD.
• Court: Missouri Court of Appeals

196 S.W. 424

PARKER et al. v. SOVEREIGN CAMP OF WOODMEN OF THE WORLD.

No. 2009.

Springfield Court of Appeals. Missouri.

June 26, 1917.

Appeal from Circuit Court, Texas County; L. B. Woodside, Judge.

Action by Charles Parker and another against the Sovereign Camp of the Woodmen of the World. Judgment for defendant, and plaintiffs appeal. Affirmed.

Hiett & Scott, of Houston, for appellants. D. E. Bradshaw, of Omaha, Neb., Robert Lamar, of Houston, and Barbour & McDavid, of Springfield, for respondent.

STURGIS, J.

This is a suit by the beneficiaries on a benefit certificate issued by the defendant on the life of John M. Parker and presents an issue of law only. The agreed facts are that said Parker, while a member in good standing, committed suicide on May 8, 1916, and this is the sole defense. The application for the benefit certificate, the certificate itself and the by-laws of the defendant order, which are made part of the contract, all provide that if the member die by his own hand or act the certificate shall be null and void, and all money paid thereon and all benefits thereunder shall be absolutely forfeited, without notice or service. The defendant, a Nebraska corporation, was at all the material times duly licensed to do business in this state under Laws Mo. 1911, pp. 284 to 330, which act is amendatory of article 9, chapter 61, R. S. Mo. 1909. When the certificate in question was issued, said Parker was a citizen of this state, and same was delivered in this state, making it a Missouri contract.

The contention of defendant is, and the trial court so held, that defendant is a fraternal beneficiary association governed by said Laws 1911, p. 284, by section 5 of which it is exempt from all the provisions of the insurance laws of this state, other than those contained in said act; that this makes defendant exempt from the provision of section 6945, R. S. 1909, providing that suicide shall not be a defense to any suit upon a life insurance policy, in the absence of proof that the assured contemplated suicide at the time he made application for the policy.

The contention of plaintiff is that the contract in question is not such a contract as the defendant is authorized to make under the act of 1911, supra, and therefore this contract is not governed by that act, but by the general insurance law, which eliminates the defense of suicide. This contention is based on the further contention that the contract in question does not specify the amount of benefits provided thereby, as is required by section 9, Laws 1911, p. 286. The language of the certificate in question on this point is:

"John M. Parker, a member of Piney Camp, No. 657, located at Cabool, state of Missouri, is, while in good standing as a member of this fraternity, entitled to participate in its beneficiary fund to the amount of one thousand dollars, should his death occur after the second year of his membership, payable at his death to Charles and Ella Parker, by the Sovereign Camp of the Woodmen of the World: * * * Provided, that the payment of this certificate, or any part thereof, shall be based upon one assessment on the entire beneficiary membership of this order in good standing; the full amount, when so paid, in no case to exceed the amount of one such assessment, nor shall any portion so paid be in excess of a like proportion of a single assessment on the entire beneficiary membership at that time."

This last provision of the certificate in question must be read in the light of the statute (Laws 1911, supra), which itself becomes part of and dominates the contract. Any inconsistency in the policy must yield to the statutory provisions; and, if it be true that the policy, after naming the amount of benefits to be paid, does, by a subsequent provision, seek to limit such liability to a possible indefinite amount in contravention of the statute, then such limitation must be held void. Kribs v. U. O. F., 191 Mo. App. 524, 549, 177 S. W. 766. In Westerman v. Supreme Lodge, 196 Mo. 670, 720, 94 S. W. 470, 5 L. R. A. (N. S.) 1114, it is shown that the certificate then under consideration contained a similar provision, and at page 742 (94 S. W. 490) the court says that a distinguishing feature of a benefit certificate, as contrasted with an insurance policy, is "that the amounts to be paid by the members are not definitely fixed, nor is the amount to be paid upon death certain." It would be a strange ruling to hold that, because the law now requires a benefit certificate to "specify the amount of benefits provided," a subsequent clause providing for the necessary uncertainty in paying such certificates would render same an old-line contract, an essential feature of which is that the amount to be paid must be definite and certain. In Frame v. W. O. W., 67 Mo. App. 127, 135, the court, speaking of this same form of contract, said that it was a contract "to pay a certain sum, which is to be raised by a certain mode." If the mode should prove inadequate to raise the certain sum, then, in view of this statutory requirement, the defendant might well be denied any such defense. The defendant is not raising any such defense here. In fact, it is shown that the membership of this order runs into the hundreds of thousands, and that it has an emergency fund of $26,000,000, so that the possibility of a single assessment not proving adequate is very remote.

The plaintiff cites Kribs v. Foresters, 191 Mo. App. 524, 177 S. W. 766, as holding that a certificate of insurance, which does not specify unqualifiedly the amount of benefits to be paid, must be construed as being insurance on the assessment plan, and therefore subject to the suicide statute. This, however, argues too much, since the statute governing insurance on the assessment plan (section 6952, R. S. 1909), is even more specific in requiring a policy on that plan to "specify the exact sum of money which it promises to pay" than does the statute on fraternal beneficiary insurance. It will readily be seen that the present defendant and this certificate of insurance do not fit in with any class of insurance provided for by our laws as nearly as it does with fraternal insurance. By a similar process of elimination the present contract might be argued to be no insurance at all. Besides, the insurance contract in issue in the Kribs Case was issued before the act of 1911, and was therefore not governed by it. Whatever we may think of some of the reasoning in the Kribs Case, it is certain that the contract then in issue was not held to be other than fraternal beneficiary insurance because of the amount of the benefits being indefinite, nor for the reason next to be considered. We might surmise that one of the purposes of the act of 1911, supra, was that, since the courts were holding (Westerman v. K. P., 196 Mo. 670, 742, 94 S. W. 470, 5 L. R. A. [N. S.] 1114) that one of the tests of fraternal beneficiary insurance was the indefinite amount to be paid on any certificate, such certificate should be made definite in this respect, and still be within such class.

A second reason for assailing the present contract as being in violation of the laws applicable to fraternal beneficiary societies is that defendant has failed to comply with section 25 of the act of 1911 (Laws 1911, p. 293), one clause of which provides:

"The laws of such society shall provide that if the stated periodical contributions of the members are insufficient to pay all matured death and disability claims in full and to provide for the creation and maintenance of the funds required by its laws, additional increased or extra rates of contribution shall be collected from the members to meet such deficiency."

The defendant's by-laws provide for fixed annual, or, at the member's option, monthly, payments for each $1,000 of insurance, based on the age of the member. Then follow these provisions:

"On or before September 1, 1915, the Sovereign Commander shall publish, in the columns of the Sovereign Visitor, notices to all members that assessments and dues are based on annual payments, and giving them the right to pay by monthly installments. He shall have authority to order the collection of one or more annual assessments or monthly installments, or to order that no payment or an annual assessment or monthly installment is necessary, and in such case shall so notify the Sovereign Clerk in writing.

"Every member of this society shall pay to the clerk of his camp one annual assessment or one monthly installment or assessment as required in section 6, which shall be credited to and known as the Sovereign Camp fund. He shall pay any additional Sovereign Camp fund or camp dues, or either, which may be legally called.

"Should there be any assessments or dues ordered to be paid in any year, in addition to the regular annual or monthly installment payments due by each member, the Sovereign Clerk shall so notify the clerk of every camp on or before the 1st day of the month for which said assessments, installments of assessments, or dues are called, and instruct the clerk to notify every member of his camp in the manner as provided in these laws on or before the 5th day of the same month.

"When any assessment payment or dues, in addition to the regular payment, is ordered in any one month, the clerk shall notify each member of his camp of such assessment or assessments or dues."

The plaintiffs' attack on these provisions is somewhat contradictory, in that it is said that these provisions of the by-laws are inadequate to afford a sure and efficient means of collecting additional funds in case the regular assessments are insufficient, and again that they give the Sovereign Commander absolute and unlimited authority in this respect. There is, of course, always a possibility that the governing body of an order of this character, whether vested in one man or a number of men, may be derelict of their duties in this and other respects. But a...