Puckett v. National Annuity Association
| Decision Date | 15 December 1908 |
| Citation | 114 S.W. 1039,134 Mo.App. 501 |
| Parties | PUCKETT et al., Respondents, v. NATIONAL ANNUITY ASSOCIATION, Appellant |
| Court | Missouri Court of Appeals |
Appeal from St. Louis City Circuit Court.--Hon. Jas. E. Withrow Judge.
Reversed and remanded.
David C. Finley and F. H. Bacon for appellant.
(1) A fraternal beneficiary society is a creature of the statute. It can exercise no powers except as conferred by statute, and a member is bound to take notice of all the limitations and restrictions found in the statute relative to contracts of this kind. Ferbrache v. Grand Lodge A. O. U. W., 81 Mo.App. 268; Lister v. Lister, 73 Mo.App. 99; Montgomery v. Whicbeck (N. D.), 96 N.W. 327. (2) It being conceded that the defendant is a fraternal beneficiary society, the court must construe the contract and award relief in accordance with the terms of the contract. To give judgment for the present value of the annuity is to give plaintiffs an undue advantage over the other members of the society. Boyd v. Southern Mut. Aid Assn. (Ala.), 41 So. 645; Knights Templar v. Vail, 68 N.E. 1105; Brenizer v. Supreme Council, 59 S.E. 855; Reynolds v. Supreme Council R. A., 78 N.E. 129; Supreme Council v. Brashears, 89 Md. 624, 43 A. 869. In Supreme Council v. Ainsworth, 71 Ala. 426, it is said: "The fundamental principle of such organizations is the mutuality of duty and equality of the rights of the members without regard to time of admission." This principle was clearly established by the Supreme Court of North Carolina in the recent case of Brenizer v. Supreme Council Royal Arcanum, 75 S.E. 835. The doctrine is also clearly established in the case of Knights Templar v. Vail 68 N.E. 1105.
W. B. & Ford W. Thompson for respondent.
(1) There is but one question in the case, and that is the proper measure of damages. We submit that the measure of damages is that which is incorporated in the declaration of law given by the court, namely, the amount due, with interest to date of trial, together with the present value, as of the date of trial, of all payments that would become due, and that it involves no other than the elementary principles of law governing a simple suit for breach of contract. Sedgwick on Damages (8 Ed.), secs. 642, 643, 644, pp. 302, 303, 304 and 305; Schell v. Plumb, 55 N.Y. 592; Parker v Russell, 133 Mass. 74; Trustees of Howard College v. Turner, 71 Ala. 429. (2) A suit on this contract to recover any one of these installments would preclude the plaintiff from bringing any suit thereafter, because of the rule established by the following text writers and authorities: Freeman on Judgments, sec. 238; Booge v. Railroad, 33 Mo. 212; Wagner v. Jacoby, 26 Mo. 532; Kerr v. Simmons, 9 Mo.App. 376, 82 Mo. 269.
Appellant is a fraternal order and issues benefit certificates for the payment of annuities on the occurrence of death or certain disabilities. These respondents held a certificate which provided, among other things, that if Walter Puckett was partly disabled by the loss of an eye, respondents should receive an annuity of $ 300 for ten years, payable in quarterly installments of seventy-five dollars each. The insured accidentally lost the sight of his right eye on October 5, 1905. In March, 1906, appellant allowed his claim for an annuity under the policy, and in the month of April paid him and his corespondent the first quarterly installment of the annuity for said year, to-wit, $ 75. It afterwards refused to pay other installments, and on March 5, 1908, this action was instituted to recover $ 2,925, as respondents' total damages sustained by appellant's breach of the contract of insurance. The answer admits appellant is a beneficial association existing under the laws of this State, and that it issued the certificate mentioned in the petition, whereby respondents became members of the beneficial department of a subordinate assembly in St. Louis, and entitled to all the privileges accorded to members by the order's constitution and by-laws; admits appellant agreed to pay respondents, or the survivor, an annuity for ten years, payable quarterly, in the event that while members in good standing in the association, one of them should suffer complete and permanent loss of the sight of an eye; the payment to commence within ninety days from the date when proof, in due form, was furnished the association. The other averments of the petition were denied. At the trial these facts were admitted by appellant in open court: the constitution and by-laws of appellant were part of the contract of indemnity; under section 5, article 7 of the by-laws, either of respondents was entitled to an annuity of $ 300, payable quarterly, in the event of the complete loss of one eye; appellant was a fraternal beneficial association, dependent on the monthly collection of assessments from its members to meet its obligations and only paid benefits in the shape of annuities; it had paid one installment of the annuity in this case, but had failed to pay other installments because of erroneous information from its physician and other parties, as to the nature and extent of the injury to Walter E. Puckett; admitted he had sustained the loss of an eye, which entitled him to an annuity sued for. Appellant offered to allow a judgment to be entered in favor of respondents, for all unpaid arrearages accrued up to the date of the trial, with interest on each installment from the time it fell due, and with a clause providing that an execution should issue if any future installment failed to be paid within ten days from the date it fell due, on the filing of an affidavit of said fact by respondents. Some of the matters admitted were not alleged in the petition; but attached to the petition was the benefit certificate, which provided it was subject to the laws of the association and that the constitution and by-laws were part of the contract. These show appellant depends on the collection of monthly assessments and dues from its members to meet obligations, and that only annuity benefits are paid. What the parties disagreed about was whether respondents were entitled to a judgment for no more than the installments of annuity which were due at the date of the trial, with interest from their maturity; or a judgment for the present worth of all the unpaid installments which had accrued or would accrue thereafter, during the entire annuity period of ten years. The court took respondents' view of the question, computed the present worth of the various installments which would accrue in the future, added said amount to the amount of past-due installments and interest and entered judgment for the total sum, to-wit, $ 2,637.52. At respondents' request the court declared the law as follows: respondents were entitled to recover the amount of all quarterly payments due after April, 1906, when the first installment was paid by appellant, with interest on said subsequent installments to the date of the trial, March 5, 1908; and also in addition thereto, the present value of all payments that were yet to become due and payable; and that in computing this value, interest must be allowed, compounded annually, at the rate of six per cent on each installment that was to become due and payable after March 5, 1908, in favor of the defendant. An exception was saved to said declaration of law, and also to the judgment rendered. Appellant asked the court to find respondents were entitled to recover of appellant the quarterly payments which fell due July and October 1, 1906, January, April, July and October 1, 1907, January 1, 1908, and that another installment of seventy-five dollars would fall due April 1, 1908; to enter judgment for $ 553.85 for unpaid installments, with interest; that appellant pay respondents, or their assigns, quarterly thereafter, beginning April, 1908, the sum of seventy-five dollars; and in case this was not done for the period of ten days after the maturity of an installment, respondents should have an execution for the sum in default, on the filing of affidavit of non-payment with the clerk. It will be perceived the court treated the contract of indemnity as one which entitled respondents when it was breached by appellant, to recover at once the whole of the annuities that should be paid during the entire indemnity period.
The question to be determined is presented in an unusual phase for commonly it appears as a plea of former recovery asserted against a plaintiff's right to maintain a second suit for damages for the breach of a contract, on the ground that the entire damages ought to have been recovered in the prior action; but the same principles and authorities must be resorted to for the rule of decision when parties insist, as these respondents do, they had the right to sue for total damages, both present and prospective. Respondents contend they not only had this right, but were bound, on pain of being barred by the judgment herein of their remedy for future annuities, to embrace in a single action, not only installments already due, but those which would fall due in the future. That they were compelled to do this is an untenable proposition; for the recent authorities hold, without exception, as far as we are advised, that when payments of money are to be made periodically, separate actions may be maintained in succession for installments as they mature, subject to this proviso; all sums due when an action is begun, must be included in it. ...
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