Salter v. The Security Benefit Association

• Decision Date: 06 March 1926
• Docket Number: 26,219
• Citation: 243 P. 1033,120 Kan. 395
• Parties: JOHN W. SALTER et al., Appellees, v. THE SECURITY BENEFIT ASSOCIATION, Appellant
• Court: Kansas Supreme Court

243 P. 1033

120 Kan. 395

JOHN W. SALTER et al., Appellees, v. THE SECURITY BENEFIT ASSOCIATION, Appellant

No. 26,219

Supreme Court of Kansas

March 6, 1926

Decided January, 1926.

Appeal from Butler district court; GEORGE J. BENSON, judge.

Judgment reversed.

SYLLABUS

SYLLABUS BY THE COURT.

1. MUTUAL BENEFIT INSURANCE--Payment of Dues--Custom--Evidence. The evidence is held not to show the establishment of a custom or course of dealing for a local officer of a fraternal beneficiary association to accept dues from members for a stated period after maturity.

2. SAME--Dues--Authority of Local Officer to Accept Delinquent Payment. The acceptance by a local officer of a fraternal beneficiary association of dues after membership has been lost by nonpayment does not bind the association, especially under a statute, which has been acted upon, authorizing such associations to adopt by-laws preventing waivers in its behalf by local officers.

B. R Leydig, K. M. Geddes, E. W. Grant, all of El Dorado, A. W. Fulton and George R. Allen, both of Topeka, for the appellant.

Ezra Branine, Alden E. Branine, both of Newton, and J. P. Flinn, of Wichita, for the appellees.

OPINION

MASON, J.:

The parents of Cora J. Salter, being the beneficiaries of a certificate of the Security Benefit Association issued to her, brought this action against the association upon that certificate. The defendant resisted payment on the ground that by nonpayment of her dues for January, 1923, she had ceased to be a member of the order at the time of her death, which took place at noon of February 1, 1923. The plaintiffs asserted that while the by-laws provided that payment of dues for each month should be made before the expiration of the month, a custom or course of dealing had been established for the financier of the local lodge or council--the officer to whom dues were paid--to accept payments at any time before the fifth of each month, when they were sent to the national council. The defendant denied the existence of such custom or course of dealing, but contended that if it had existed it would not render the association liable, because of a by-law covering the ground specifically authorized by a statute enacted in 1917, reading:

"The constitution and laws of any fraternal beneficiary society doing business in Kansas may provide that no subordinate lodge or body, nor any of its subordinate officers or members, shall have the power or authority to waive any of the provisions of the constitution and laws of such society, and the same shall be binding on the society and each and every member thereof, and on all beneficiaries of members." (R. S. 40-703.)

1. Disregarding the statute for the time being we find in favor of the defendant's contention that there is no evidence of the existence of the custom or course of dealing referred to. The disagreement on this point arises largely out of an arrangement of the following character, which was fully and clearly shown by the testimony of the local financier as a witness for the plaintiffs: The local council or lodge undertook to and did protect for one month all the members from loss of membership through nonpayment of dues for that period. The council stood good for the payment, and if by the fifth of the following month (the time for remittance to the national council) a member had not paid, the amount necessary to carry out the plan was deducted from the funds of the local council and added to that to be sent to the national council, each of such members being credited with payment to the association as of the last of the preceding month. The dues were thereby paid and the member became liable to the local lodge for the money it had put up in his behalf. If he met this obligation the local lodge was reimbursed; if not, it was out of pocket by the amount. The local council by a rule formally adopted and regularly acted on became responsible to the national council before the expiration of the month for which the dues were paid, and the relation of the parties was not affected by the circumstance that the money was not sent in until the fifth of the next month. The arrangement was not an extension of the time within which the member might pay his dues and retain his standing. It was an actual and timely payment of dues in his behalf by the local council, which was willing to take the chance of being repaid.

The president of the local council testified that he paid his dues for July, 1921, on the first of the following month. This was within the practice already described--the protection of each member for one month by the local council. He spoke of the practice having been stopped but did not say when. He said he had no memory of a resolution having been passed establishing it. The secretary's record, however, showed that on February 5, 1917, a motion was carried "that the financier draws of the local council of one month and fines those five cents that are late in the payment of dues." The secretary testified that while this rule stood the local council paid more than one month for delinquent members, and because of its losing money thereby a motion was adopted May 17, 1920, "to carry members not more than one month without payment of dues by members." The president's testimony does not appear to be in real conflict with that of the secretary. Moreover, a single instance of a receipt of dues after the expiration of the month could not establish a custom. A former president told of having paid dues after maturity in 1924, but this could not affect the standing of Cora J. Salter at the time of her death on February 1, 1923. This...