Railway Mail Ass'n v. Moore

• Decision Date: 19 October 1926
• Docket Number: No. 2514.,2514.
• Citation: Railway Mail Ass'n v. Moore, 15 F.2d 547 (4th Cir. 1926)
• Parties: RAILWAY MAIL ASS'N v. MOORE.
• Court: U.S. Court of Appeals — Fourth Circuit

15 F.2d 547 (1926)

RAILWAY MAIL ASS'N v. MOORE.

No. 2514.

Circuit Court of Appeals, Fourth Circuit.

October 19, 1926.

H. G. Kump, of Elkins, W. Va., for plaintiff in error.

D. H. Hill Arnold, of Elkins, W. Va. (A. M. Cunningham, of Elkins, W. Va., on the brief), for defendant in error.

Before PARKER, Circuit Judge, and WEBB and SOPER, District Judges.

SOPER, District Judge.

Anthony Moore lost his life on June 10, 1922, at Colcord, W. Va., in a fire which destroyed the hotel in which he was a guest. His occupation was that of a railway postal clerk, and he was the holder of a certificate or policy of insurance in the Railway Mail Association, a corporation organized for the mutual protection and benefit of the members and their beneficiaries. The certificate provided that, if the death of the holder should result from accidental injuries, the association would pay $4,000 to the mother of the insured, who was named as beneficiary. After his death, demand for that amount having been made and refused, suit was brought by the beneficiary to recover it. The association filed a general issue plea to the declaration, and also pleaded specially that the policy had become forfeited because of the failure of the certificate holder, notwithstanding due notice, to make payment of assessment No. 142, amounting to $2.75, levied by the association on April 20, 1922, and payable in 30 days thereafter. The plaintiff filed a general replication, and also replied specially, in effect that due notice of the assessment had not been given to the policy holder, as required by the laws of the association.

The issues of payment and of notice were left to the jury, under the instructions of the court, and a verdict was rendered for the amount payable under the policy, in case of accidental death, with interest. The defendant brought its writ of error to this court, complaining of certain errors in the court's instructions. Briefly stated, the contention of the plaintiff in error, hereinafter called the defendant, is that the court should have instructed the jury to render a verdict for the association, because there was no evidence to justify a verdict for the plaintiff. There was, in fact, no pretense on the part of the plaintiff that the assessment was paid, and, had this been the only issue, the court might well have directed a verdict for the defendant. But the case turns on the question of notice, as to which the assignments of error raise two points: (1) Whether, under its laws, the association was required to give a special notice of assessment No. 142; and (2) whether the burden of proof as to the fact of notice was on the plaintiff or on the defendant. The further question arises on the record — whether, if it be admitted that notice was sent to the policy holder in the manner claimed by the defendant, such notice was a sufficient compliance with the constitution and by-laws of the association.

The determination of these questions depends in part upon the constitution and by-laws of the association. The relevant provisions were substantially as follows: It was provided that each assessment should be paid within 30 days from the date on which it was levied, and on the failure of any member to make such payment he should be automatically suspended without notice, and he, or any person claiming through him, should not be entitled to any benefits from the association. At least one assessment each two months was to be levied by the secretary, until such time as the benefit fund should reach one-fourth of 1 per centum of the total contingent death liability, and thereafter, whenever the benefit fund was less than one-fourth of 1 per centum, as above, an assessment was to be levied by the secretary. The regular assessments, to provide for the benefit fund, a per capita tax, and certain additional dues, were to be levied at the rate of $2.75 an assessment in the months of June, August, October, December, February, and April. Provision was also made for the distribution of these assessments to the several purposes for which they were raised, and it was specified that all of the assessment of $2.75, to be levied in the month of April, was to be credited to the per capita tax and certain dues independent of the benefit fund, while all or a part of each of the five remaining assessments during the year were apportioned to the benefit fund. It was further provided that extra assessments for the benefit fund should be levied at such times as the secretary might deem necessary, and that after notice they should be collected in the same manner as the regular assessments.

There were other specific provisions in regard to notice of assessments. It was provided, in terms applicable as well to regular as to extra assessments, that, upon notice of an assessment being issued, it should be the duty of the secretary immediately to collect the same; that it should be the duty of each member to notify the secretary in writing of any change in his post office address; and that the mailing of notice of assessment to his last known address should be considered legal notification, and if such notice were printed in a circular, or in the regular authorized paper of the association, and mailed to such address, it should constitute a due and legal notice.

The members, including the certificate holder, were furnished, not only with a copy of the constitution and by-laws, containing these rules, but also with a membership card, which was issued on or about the 1st of July in each year. The card issued July 1, 1921, gave the dates and amounts of the regular assessments payable every two months at the rate of $2.75 from August, 1921, to June, 1922. The card also indicated, however, that the assessments were subject to change by the National Council, and that the schedule, while showing the probable date of levy of assessment, was also subject to change, in that an unusual number of accidental deaths might necessitate one or more additional assessments during the year.

The association contends that, since the policy holder had in his possession copies of the rules shown by the by-laws and the membership card, he was advised that a regular assessment would be levied in April, 1922, and was therefore entitled to no further notice. It is well settled that, if the laws of such a society provide that assessments shall be paid at stated times, the members are bound to take cognizance thereof and other notice is not necessary; but if the laws provide that members shall be notified of assessments, or if the amounts or the dates of payment are uncertain, the failure of a member to pay cannot serve as a basis for forfeiture, unless he has been given special notice. 29 Cyc. 171; Bacon Life and Accident Insurance (4th Ed.) § 486; 32 C. J. 1303, 1304; 3 Cooley's Briefs on Insurance, 2281 et seq.

A consideration of the by-laws of the association in this case leads to the conclusion, not only that the amount and the date of the assessment were uncertain, but also that special notice of all assessments was contemplated. The six so-called regular assessments aggregated $16.50 per year, of which $10 was intended for the benefit fund. It was specifically declared that regular assessments for the benefit fund should be levied until the fund reached a certain amount, and thereafter whenever the fund fell below that amount. It is true that the April assessment was intended for other purposes, but it was so connected with the regular bimonthly assessment of $2.75 in one scheme for financing the body as to be dependent upon the maintenance of the whole schedule. As a matter of fact, prior to the death of the insured...