Rockhold v. Canton Masonic Mut. Ben. Soc.

• Citation: 21 N.E. 794,129 Ill. 440
• Parties: ROCKHOLD v. CANTON MASONIC MUT. BEN. SOC.
• Decision Date: 15 June 1889
• Court: Supreme Court of Illinois

129 Ill. 440

21 N.E. 794

ROCKHOLD

v.CANTON MASONIC MUT. BEN. SOC.

Supreme Court of Illinois.

June 15, 1889.

Error to appellate court, Second district.

Action by Charles W. Rockhold against the Canton Masonic Mutual Benevolent Society, to recover a sum claimed to be due upon a beneficiary certificate of membership issued by defendant to him. The judgment of the appellate court was in favor of defendant, and plaintiff brings error.

McCulloch & McCulloch, for plaintiff in error.

H. R. Benson and D. Abbott, for defendant in error.

SCHOLFIELD, J.

Appellant assumes to be incorporated under and by virtue of the provisions of sections 29-31, c. 32, Rev. St. 1874, which provide for the creation of ‘corporations not for pecuniary profit.’ ‘The particular business and objects' of the corporation, as declared in the certificate of the promoters filed in the office of the secretary of state, are ‘to give financial aid and benefit to the widows, orphans, and heirs or devisees of deceased members;’ and the certificate of incorporation is a license only for ‘the particular business and objects' enumerated in the certificate of the promoters. See statute, ubi supra. The only difference that occurs to us between a corporation organized under a general law and one created by a special statute, material to be here considered, is that in the former we look to the certificate of the promoters, while in the latter we look to the special statute to ascertain the scope of the powers of the corporation. The rule for construing the instruments must, necessarily, be the same, namely, the powers specifically enumerated, and such other powers as are incidental or necessary to carry those powers into effect, but none others, may be exercised by the corporation. Caldwell v. City of Alton, 33 Ill. 416;Marsh v. Astoria Lodge, 27 Ill. 421;Trustees v. McConnel, 12 Ill. 140;Bank v. Godfrey, 23 Ill. 579;Chicago v. Rumpff, 45 Ill. 90; People v. Board, Id. 112; Bac. Ben. Soc. § 47. The certificate here in suit assumes to bind the corporation to the payment to Charles W. Rockhold, upon his arriving at 70 years of age, or after he has been a member of this society in good standing for 25 consecutive years, or upon his death to his wife, if living, if not to his children or to his legal representatives, the sum of one dollar for each member of division A, within 60 days after due notice, etc. It is plain that an undertaking to pay a given sum of money to a member of a society upon his arriving at 70 years of age, or after he has been a member of the society in good standing for 25 consecutive years, is not ‘intended to benefit the widows, orphans, heirs, and devisees of a deceased member.’ Such an undertaking is to pay in the life-time of the member, and to him alone, and he is thus the sole beneficiary. But an undertaking ‘intended to benefit the widows, orphans, heirs, and devisees of deceased members' must be an undertaking to pay after the death of the member directly to the widows, orphans, heirs, or devisees of such deceased member, or, at all events, in such way that they shall be the immediate recipients of the use of the sum to be paid; for we must assume that the word ‘benefit’ is used in its legal sense,-that of the direct and absolute enjoyment of the sum to be paid or of its use. In so far, therefore, as this certificate assumes to bind the society to the payment to Charles W. Rockhold of the sum named upon his arriving at 70 years of age, or after he has been a member of the society in good standing for 25 consecutive years, it is beyond the power conferred by the charter of the corporation. State v. Association, 29 Ohio St. 399;People v. Nelson, 46 N. Y. 477; Bac. Ben. Soc. § 46; Nibl. Mut. Ben. Soc. § 3.

But counsel for appellant contend that, conceding the law to be thus, contracting to pay a sum to a member on his arriving at 70 years of age, or after he has been a member of the society in good standing for 25 consecutive years, is neither immoral in itself, nor prohibited by any statute; and therefore that, the contract having been fully executed by appellant by paying all the assessments made upon him, appellee is estopped to plead its want of authority to thus contract. It may be conceded that, apart from any question of public policy, there is nothing immoral in the mere act of contracting to pay money to appellant upon the conditions expressed in the certificate, but it cannot be conceded that thus contracting is not within any statutory prohibition. In the solution of this question it will be necessary to determine: (1) Is this undertaking, apart from arbitrary statutory definition or classification, life insurance? (2) If life insurance, is it such as was originally within the contemplation of the act of March 26, 1869, in relation to life insurance? (3) If such as was originally within the contemplation of that act, has it been excepted from the effect of that act by anything in the act of April 18, 1872, in relation to the formation of corporations not for pecuniary profit. either before or since its amendment by the act of March 28, 1874?

1. That the undertaking evidenced by this certificate is one of insurance, if considered apart from all arbitrary statutory classifications or definitions, cannot be seriously questioned. It is an undertaking by a society, in view of the ascertained age and condition of health of one of its members, in consideration of a present payment of a sum of money, and of the undertaking to pay other contingent sums in the future, by him, to pay a sum to him or to his widow or heirs, etc., contingent as to time upon the duration of his life; and it has been held that the undertaking is not the less a contract of insurance because the amount to be paid by the corporation is not a gross sum, but a sum graduated by the number of members holding similar contracts; nor because a portion of the premiums is to be paid upon the uncertain periods of the deaths of such members; nor because, in case of non-payment of assessments by members, the contract provides no means of enforcing payment thereof, (Com. v. Wetherbee, 105 Mass. 160;State v. Association, 6 Mo. App. 163;) nor is it any the less a contract of insurance because it is to pay certain sums of money as endowments to living members, (Association v. State, 35 Kan. 253,10 Pac. Rep. 872;State v. Association, 35 Kan. 51,9 Pac. Rep. 956;State v. Association, 18 Neb. 281, 25 N. W. Rep. 81;State v. Society, 72 Mo. 146;Briggs v. McCullough, 36 Cal. 542; Bac. Ben. Soc. §§ 17, 167; Nibl. Mut. Ben. Soc. §§ 163, 164.

2. The act of 1869 makes no exception in any of its provisions as to any class of life insurance. See Laws of 1869, p. 229. Its title is ‘An act to organize and regulate the business of life insurance,’ and we are unable to conceive of language more comprehensive as to the general subject than that employed in the several sections, where, if exceptions or limitations had been intended, they would have been expressed. Thus we find this language: In section 1: ‘That before any life insurance company goes into operation, under the laws of this state, a guaranty capital of at least one hundred thousand dollars shall be paid in money, and invested,’ etc. In section 2: ‘No policy shall be issued until a certificate from the auditor has been obtained authorizing such company to issue policies.’ In section 5: ‘Every life insurance company incorporated in this state, or doing business in this state, shall, on or before the first day of March in each year, transmit to the auditor and file in his office a statement of its business standing,’ etc. In sections 3 and 10 are imposed like restrictions upon all foreign companies doing business in this state. It cannot be said that mutual companies were not in the mind of the legislature at the time of this enactment, because it is provided in section 4 that ‘the subscribers or holders of guaranty stock in a life insurance company organized on the mutual or stock and mutual plan shall choose the first board of directors, and at all subsequent elections they shall choose one-half of the directors, and the holders of mutual policies the other half, until the redemption of the guaranty stock, when the holders of mutual policies shall elect all of the directors.’ And in section 14 that ‘life insurance companies doing business in this state, which do business upon the principle of mutual insurance, or the members of which are entitled to share in the surplus funds thereof, may make distribution of such surplus,’ etc. And so it is clear and beyond dispute that when the language quoted from the sections supra was employed it was intended to include ‘mutual’ as well as ‘stock’ companies.

But, counsel urge, the statute speaks of ‘valued policies,’ the ‘net value of policies,’ and of the ‘valuation of policies,’ whereas certificates like that in suit are incapable of valuation, and therefore such insurance could not have been within contemplation. To this it may be answered, first, that if the legislature evince by the language employed, as we think they do, that it was clearly intended to prohibit all life insurance, except such as shall be in conformity with its provisions, it cannot be of the slightest significance that there was some form of insurance with which the members of that body were not familiar, and to which many of the restrictions are practically inapplicable. Such a consideration addresses itself to the legislature alone as a reason why the act should be amended, excluding from its provisions the general prohibition. Second. It is said in Bac. Ben. Soc. § 166: ‘Regarding the certificate of membership as a contract similar to a life insurance policy, it is what is termed a ‘valued’ policy;' and, quoting from Insurance Co. v. Mitchell, 48 Pa. St. 372, that such a policy ‘is not understood to be one which estimates the value of the property insured merely, but which values the loss, and is...