Peebles v. Eminent Household of Columbian Woodmen

• Decision Date: 16 February 1914
• Citation: 164 S.W. 296,111 Ark. 435
• Parties: PEEBLES v. EMINENT HOUSEHOLD OF COLUMBIAN WOODMEN
• Court: Arkansas Supreme Court

164 S.W. 296

111 Ark. 435

PEEBLES v. EMINENT HOUSEHOLD OF COLUMBIAN WOODMEN

Supreme Court of Arkansas

February 16, 1914

Appeal from Jefferson Circuit Court; Antonio B. Grace, Judge reversed.

STATEMENT BY THE COURT.

Samuel W. Peebles brought this suit against the Eminent Household of Columbian Woodmen to recover on a benefit certificate issued to him. The latter is a fraternal insurance society organized under the laws of the State of Georgia, with its head office in the city of Atlanta, and its governing body is called the "Eminent Council." The membership of the association is organized into local lodges, which are governed by the Eminent Council. The funds from which the benefit certificates are paid are accumulated by assessments levied by the Eminent Council and collected by the Worthy Clerk of the local lodges.

In 1907 the association sent J. W. Phillips, as its representative to the State of Arkansas for the purpose of organizing subordinate lodges. He was called "General Consul," and came to Pine Bluff and organized a lodge there in June 1907. A. B. Smith was elected Worthy Clerk at the organization of the lodge, and has continued to fill such office ever since. Samuel W. Peebles became a member of the local lodge. He made application for a beneficiary covenant or policy of insurance, in the association. He was examined by a physician, and his application was forwarded to the Eminent Council at Atlanta. His application was approved there on June 7, 1907, and the beneficiary covenant, or policy of insurance, was sent to Pine Bluff to be delivered to him. The by-laws of the association provide that neither the Worthy Clerk nor the subordinate lodge shall have power to waive any of the by-laws or rules of the association. They further provide that after the beneficiary covenant issued by the Eminent Council is sent to the local lodge for delivery it must be countersigned by the Worthy Clerk of the local lodge before it is actually delivered to the insured. The by-laws further provide that the beneficiary covenant must have been delivered to the insured while in good health, and the latter must have signed, on delivery of said covenant, an acceptance of the same and a statement of good health at the time, together with the acceptance of the conditions recited on the face of the covenant as well as the provisions of the constitution and bylaws governing the association.

Samuel W. Peebles testified that on the 10th day of June, 1907, he met J. W. Phillips on the streets of the city of Pine Bluff and signed his acceptance of the beneficiary covenant and delivered the same to Phillips. That he paid the dues and assessments required of him, and was in good health at the time he signed the acceptance of the covenant. That Phillips told him that the covenant was at his office; that he was compelled to leave town for a few days, and would deliver the covenant to the insured on his return.

On the 24th day of June, 1907, Samuel W. Peebles was injured while in the employment of a railroad company, and was confined to his bed for some time thereafter as the result of his injuries. The insured's spine was injured, but after being confined to his bed for some time he was able to walk on crutches, and got up and went back to work for the railroad company. About the middle of February, 1909, he received a second injury to his spine, which permanently disabled him. The beneficiary covenant, in addition to life insurance, provided for the payment of a certain amount to the insured in case of total disability caused by permanent injuries. After the insured was permanently disabled, he applied to the company for the benefits accruing to him under his policy, and the company refused to pay him on the ground that the policy was not delivered to him while in good health, and, therefore, never had any binding force or effect. From the time that the plaintiff was received into the local lodge until the company refused to pay him, he continued to pay the dues and assessments levied on him under his policy of insurance, and the association received the same.

For the defendant, A. B. Smith testified: When the local lodge was organized at Pine Bluff, I was chosen as secretary, and have remained in that position to this time. The plaintiff, Samuel W. Peebles, was injured in the latter part of June, 1907, but after he received his injuries, J. W. Phillips, the General Consul, and myself went to visit him at his house. The plaintiff at the time was in bed and signed the following acceptance, which was attached to his beneficiary covenant:

"The Worthy Clerk of Pine Bluff Household No. 69, city of Pine Bluff, State of Arkansas, will witness the signature and detachment of this warranty, and return the same at once to the Eminent Clerk. I, Samuel Wilson Peebles, the guest to whom the attached covenant was issued, hereby accept this covenant No. 1512, and agree to all its conditions, and warrant all statements in my application for this covenant and made to the doctor examining me to be true, and I further state and warrant to be true that I have not been ill since said examination, and that I am now in good health; and further that I sign this acceptance, agreement and warranty in the presence of the Worthy Clerk of Pine Bluff Household No. 69, of the city of Pine Bluff, State of Arkansas, on the 10th day of June, 1907, and I detach the same from the covenant hereto accepted.

"S.W. Peebles, Worthy Guest.

Witness: "A. B. Smith, Worthy Clerk."

The acceptance was dated the 10th day of June, 1907, but that is not its true date. It was dated back to cover a period of time before the plaintiff received his first injury. The acceptance was detached from the covenant and sent in to the head office of the company at Atlanta, Georgia, and the beneficiary covenant was delivered to the plaintiff. After the plaintiff received his second injury, and it was ascertained that he was permanently disabled, I wrote to the company the circumstances under which the acceptance was signed by him, as stated above, and the association refused to pay the plaintiff.

It was admitted that J. W. Phillips, if present, would testify that the acceptance of the covenant was not signed by the plaintiff on the streets of Pine Bluff previous to the delivery of the policy of insurance, but was signed and detached from the covenant in the presence of the said J. W. Phillips, and A. B. Smith, at the house of the plaintiff after he had received an injury at the railway shops.

The court directed a verdict for the defendant, and the case is here on appeal.

Judgment reversed and cause remanded. Rehearing denied.

Coleman & Gantt, for appellant.

The contract in this case was completed when appellant signed the required acceptance, and paid the first installment of dues to the authorized agent of appellee, and it was immaterial that the policy was not actually delivered to him until a later date or until after his injury. 76 Ark. 180; 97 Ark. 229; 89 Ark. 471; 85 Ark. 169. Benefit certificates may become binding, although never actually delivered. 1 Bacon, Benefit Societies, section 273-a; 40 N.W. 545; 87 N.W. 903.

The policy of insurance in this case was delivered by the local officer of appellee at a time when he knew of the condition of appellant and the knowledge of such agent was the knowledge of appellee. 52 Ark. 11; 71 Ark. 242. This doctrine applies in cases of benefit societies. 156 S.W. 192-195; 119 Iowa 519, 93 N.W. 508; 132 Iowa 513, 109 N.W. 1099, 7 L. R. A. (N. S.) 569, 11 Ann. Cas. 533.

Appellee is estopped to claim, after a lapse of two years, that the policy is void for misrepresentation. 71 Ark. 295; 156 S.W. 292; 104 Ark. 538.

The stipulation in the by-laws of appellee that the clerk of the local camp shall be the agent of the local camp, and not the agent of the head camp, can not relieve the appellee from the consequences ordinarily following knowledge on the part of such local camp, which is the knowledge of the head camp. 177 U.S. 260; 20 S.Ct. 611, 44 L.Ed. 762; 17 Hun. (N. Y.) 95; 44 Wis. 369; 96 Mo.App. 14, 69 S.W. 662; 128 Mich. 660, 87 N.W. 903; 13 Wall. 222, 20 L.Ed. 617; 71 Iowa 689, 27 N.W. 770; 72 Iowa 262, 33 N.W. 663; 66 Kan. 538, 77 P.239; Cooley's Briefs 2373; 76 Neb. 387; 107 N.W. 756; 135 N.W. 67; 113 N.W. 231; 121 P.949; 147 S.W. 882; 120 P.531; 127 N.W. 869; 129 N.W. 984; 89 P.661; 108 P.1048; 110 P. 680; 93 N.W. 508; 20 Cyc. 187.

Taylor, Jones & Taylor, for appellee; Dorsey, Brewster, Howell & Heyman, of counsel.

The covenant and by-laws required actual manual delivery of policy to insured while in good health and the signing of the acceptance and warranty of good health before the policy became in force. Where there are actual formalities prescribed by the by-laws, these ordinarily must be observed. Bacon on Benefit Societies, § 135; 80 Ark. 422; 81 Ark. 512; 104 Ark. 538; 98 Ark. 421; 105 Ark. 140.

When the time of actual delivery of the policy is shown to be at a later date than it is contended the constructive delivery was made, the burden of showing such constructive delivery is on the plaintiff. 25 Cyc. 926.

The contract was not complete until the actual delivery in accordance with the terms of the policy. 25 Cyc. 716, 717.

Delivery should be made by the person authorized in the policy to do so. 80 Ark. 422; 98 Ark. 166.

The assured, under a fraternal insurance contract, is conclusively presumed to know the constitution, bylaws, rules, etc., of the association. Cases supra.

The doctrine of estoppel does not enter into this case.

The officers of the society in delivering the policy assumed without authority, to waive essential requirements of the by-laws which can not be done. Bacon on Benefit Societies, § 81;...