Porter v. Loyal Americans of the Republic

• Decision Date: 02 June 1914
• Docket Number: No. 1168.,1168.
• Parties: PORTER et al. v. LOYAL AMERICANS OF THE REPUBLIC.
• Court: Missouri Court of Appeals

167 S.W. 578

180 Mo. A. 538

PORTER et al. v. LOYAL AMERICANS OF THE REPUBLIC.

No. 1168.

Springfield Court of Appeals. Missouri.

June 2, 1914.

1. INSURANCE (§ 694) — FRATERNAL INSURANCE — MEMBERSHIP — INITIATION — NECESSITY.

A fraternal beneficiary association doing business under Rev. St. 1909, § 7109, providing for the organization of fraternal insurance associations on a lodge system, with ritualistic form of work and representative form of government, for the benefit of its members, must conduct its business under a lodge system, and, where it issues certificates to persons to form a new lodge, the certificates are not binding until the persons are initiated in the new lodge, and, where a person dies before initiation, there is no liability on the certificate.

2. APPEAL AND ERROR (§ 1011) — FINDINGS — CONCLUSIVENESS.

A finding on conflicting testimony by the judge who saw and heard the witnesses will not be disturbed on appeal.

3. INSURANCE (§ 724) — FRATERNAL INSURANCE — WAIVER OF RIGHTS.

Where, within two or three days after the death of a person to whom a fraternal benefit certificate had been issued, but not delivered, with a view to the organization of a new lodge, the state agent of the association denied liability on a certificate issued to the person dying before initiation in the new lodge, and stated to the beneficiaries that the initiation fee would be refunded, and the certificate was returned by the home office, and the agent tendered the initiation fee to the beneficiary, who refused to accept it, and sued on the certificate thirty-six days after the person's death, the association did not waive its right to insist on initiation as a condition precedent to liability on the certificate.

4. INSURANCE (§ 743) — FRATERNAL INSURANCE — TENDER OF INITIATION FEES PAID.

Where a person to whom a beneficiary certificate had been issued, but not delivered, died before his initiation, which was a condition precedent to the certificate becoming enforceable, and no administrator of his estate was appointed, and the state agent tendered to the beneficiary a refund of the initiation fee within two or three days after the person's death, but the tender was refused, a tender into court of the initiation fee by the association was a sufficient offer to return the fee to relieve it from liability on the certificate.

Appeal from Circuit Court, Pemiscot County; Frank Kelly, Judge.

Action by Martha Porter and another against the Loyal Americans of the Republic. From a judgment for defendant, plaintiffs appeal. Affirmed.

C. G. Shepard, of Caruthersville, for appellants. S. W. Dixon, of Chicago, Ill., and Ward & Collins, of Caruthersville, for respondent.

FARRINGTON, J.

In this case the trial court rendered a judgment against the plaintiffs, and they have appealed.

The facts of the case are as follows: The defendant is a legally organized fraternal beneficiary association under the laws of Illinois, and is duly authorized to do business as such under the laws of Missouri relating to such insurance companies as set forth in article 9, c. 61, R. S. 1909. In November, 1910, the defendant order, contemplating the organization of a local camp at Hayti, in this state, took the application of one Fred C. Porter with a view of issuing a beneficiary certificate on his life, making the amount in the certificate ($1,000) payable to the plaintiffs herein. The state manager, who had charge of the organization of the local lodge, and who took this application in Hayti, received from the said Fred C. Porter on November 30, 1910, the sum of $1.85 as registry fee and assessment for one month, sending the same, together with the application, to the home office. The rules of the association required that there must be as many as 10 or 15 applicants in order that a charter be issued to a local camp. On December 17, 1910, there was a certificate prepared in accordance with Fred C. Porter's application, and, with about 18 others, it was forwarded to the state manager at Hayti, reaching there on about December 19th. Under the laws of the association at that time the beneficiary certificate could not be delivered until the applicant had been initiated into the local assembly, and had receipted the local clerk for the certificate, nor was the applicant entitled to such certificate, unless he was in good health at the time of his initiation and the delivery of the certificate. This being a new lodge, no certificate under the laws of the association could be delivered until such local lodge was organized, its members initiated, and its officers elected, and none of the 18 certificates were in fact delivered until such requirements had been met. The lodge at Hayti was organized, the members initiated, and the certificates issued on December 26, 1910. Fred C. Porter became ill on December 20th or 21st and died on the 25th. The fact of his death was known at the time by the state manager. His certificate was never delivered, but was returned to the headquarters of the association, which subsequently refused to pay the amount named in the certificate, and retained the $1.85 paid.

On January 30, 1911, the plaintiffs brought this action. The defendant order answered denying liability on such certificate, and setting up the facts we have detailed under several different defenses, and tendering the $1.85 into court.

Plaintiffs introduced in evidence a letter written by their attorney five days after the death of Fred C. Porter demanding payment of the $1,000, in which it was stated that, although the policy had been in the agent's hands at Hayti several days prior to the death of Fred C. Porter, on Friday, which was two or three days preceding his death, a demand was made upon the agent for the delivery of the certificate, and that he refused to deliver the same, on the ground that the assured was then ill. There is also evidence in the record that shortly after the death occurred the amount which had been paid by Fred C. Porter was offered to one of the plaintiffs, William A. Porter, and that he refused to accept the same, claiming that the certificate was in full force. The evidence also shows that all the candidates for initiation were notified that the installation would occur on December 26, 1910, except Fred C. Porter, who was not so notified because he was ill.

We quote from appellants' brief the ground on which they hope to hold the defendant association liable on the certificate:

"Plaintiffs admit that the conditions of the certificate, the application, rules, regulations, and by-laws of the defendant, were not complied with by Fred C. Porter, and that, had defendant, upon learning of the death of the said Fred C. Porter, returned to plaintiffs herein, or offered to return, the money so paid by the said Fred C. Porter for insurance, then they would have no cause of action against the defendant, and the judgment should be for...