Shartle v. Modern Brotherhood of America

• Decision Date: 15 November 1909
• Parties: ELLA M. SHARTLE, Respondent, v. MODERN BROTHERHOOD OF AMERICA, Appellant
• Court: Kansas Court of Appeals

122 S.W. 1139

139 Mo.App. 433

ELLA M. SHARTLE, Respondent, v. MODERN BROTHERHOOD OF AMERICA, Appellant

Court of Appeals of Missouri, Kansas City

November 15, 1909

Appeal from the Jackson Circuit Court.--Hon. Walter A. Powell Judge.

REVERSED.

Judgment reversed.

Conkling Rea & Sparrow for appellant.

Appellant is an Iowa corporation; it was organized and incorporated in March, 1897, under the provisions of an act of the Legislature of that State approved April 3, 1896 "defining fraternal beneficiary societies, orders or associations, and regulating the same," and has always done business under the provisions of said act. Since its entry into Missouri, in the year of its organization, it has at all times complied with all laws of this State governing fraternal benefit societies, and has annually received from the Superintendent of the Insurance Department of Missouri a license authorizing it to do the business of a fraternal benefit society in said State. We are aware of the fact that this court has held that the appellant is not such a fraternal benefit society as can claim exemption from the provisions of section 7896, Revised Statutes 1899, providing that suicide shall be no defense unless it is shown that the insured contemplated suicide at the time of applying for his insurance, or of section 7890, Revised Statutes 1899, providing that no misrepresentation shall be deemed material unless the matters misrepresented shall have contributed to the event upon which the insurance was payable. Herzberg v. Modern Brotherhood of America, 110 Mo.App. 328; Dennis v. Modern Brotherhood of America, 119 Mo.App. 210; Kroge v. Modern Brotherhood of America, 126 Mo.App. 693. But, while, as above stated, this court held, in the cases cited, that appellant was not such a fraternal society as could claim exemption from the provisions of the Missouri Statutes relating to suicide and misrepresentations, it has always held appellant to be a fraternal benefit society. Respondent's counsel practically concede that Shartle could not become a member of appellant society without initiation into one of its subordinate lodges, but the contention will be, and they tried the case on that theory, that initiation was waived. They made an effort to prove waiver by showing, First, that the secretary of Independence Lodge No. 364, of appellant, to which Shartle had applied for membership, and the secretary of probably two other subordinate lodges, had prior to the delivery to Shartle of his benefit certificate, delivered benefit certificates to other persons without requiring their initiation and that such acts on the part of these subordinate lodge secretaries amounted to a waiver of initiation in Shartle's case. Second, that three persons who had, at some time since the organization and incorporation of appellant, attended one or more meetings of its Supreme Lodge, as delegates thereto, had notice of the fact that the secretaries of several subordinate lodges, including Independence Lodge No. 364, had been delivering benefit certificates to persons without requiring their initiation, and that such notice on the part of these persons was notice to appellant, and amounted to a waiver of Shartle's initiation. Third, by attempting to show that appellant's state managers for the States of Missouri and Kansas knew that several subordinate lodge secretaries had been delivering benefit certificates to persons without requiring them to be initiated and all members of appellant society, and all benefit certificates issued by said society and all rights thereunder are subject and subordinate to appellant's by-laws, and neither a local lodge nor the officers or members thereof, had any power or authority to waive any of the provisions of said by-laws relative to the initiation of applicants for membership. Lavin v. Grand Lodge, 104 Mo.App. 1, citing with approval the following cases: Borgraefe v. Knights of Honor, 22 Mo.App. 141; Chadwick v. Order of Triple Alliance, 56 Mo.App. 463; Harvey v. Grand Lodge A. O. U. W., 50 Mo.App. 477; McMahon v. Maccabees, 151 Mo. 522; Royal Society of Good Fellows, 153 Mass. 83; McCoy v. Insurance Co., 152 Mass. 272; Miller v. Hillsborough Fire Assn., 42 N.J.Eq. 459; Royal Highlanders v. Scovills, 92 N.W. 206. Appellant's supreme officers have not the power or authority to waive the requirement of initiation. Notice to delegates to former meetings of supreme lodge not notice to supreme lodge officers. Bank v. Frohman, 129 Mo. 427; Benton v. Bank, 122 Mo. 332. Appellant's articles of incorporation and by-laws were, therefore, a part of the contract between it and Shartle. Richmond v. Supreme Lodge, 100 Mo.App. 19; Laker v. Royal Frat. Union, 95 Mo.App. 353; Slater v. Sup. Lodge, 76 Mo.App. 389; Loyd v. M. W. A., 113 Mo.App. 19; Coleman v. K. of H., 18 Mo.App. 194; Curtain v. Grand Lodge, 65 Mo.App. 297.

Metcalf, Brady & Sherman for respondent.

Appellant in its brief tries to draw the conclusion from the Herzberg case, 110 Mo.App. 328, that the reason this court therein held the defendant company not to be a fraternal beneficiary society, was because of the contract of insurance therein considered. In fact, as we read the opinion of this court, it was held that inasmuch as the law of Iowa and the by-laws of the defendant company, permitted certificates to be issued to a class not recognized by our statutes, it could not be a fraternal society, as defined by our statutes. And the fact that the certificate therein sued on was of that nature, was a matter of secondary consideration. It is their charter powers and not their acts that gives them classification. This distinction is fully made in the Dennis case, where the contract sued on named a beneficiary which is recognized by our statute. Dennis v. M. B. A., 119 Mo.App. 215.

OPINION

ELLISON, J.

Plaintiff is the beneficiary in a benefit certificate for $ 1,000 issued by defendant to her husband in his lifetime. He died and defendant refused to pay and plaintiff thereupon instituted this action.

The defendant is a fraternal benefit society organized under the statutes of Iowa and is also doing business in this State under authority of our laws. On the 20th of November, 1906, the deceased then being a resident of Independence, Missouri, made application to the subordinate lodge of defendant for that city for membership and for the benefit certificate in controversy. The application was approved on the 23d of November, 1906, and on the next day the benefit certificate was issued and sent by defendant's "Supreme Secretary" from the home office in Iowa to the secretary of the subordinate lodge at Independence. A few days thereafter, on the 5th of December, 1906, that secretary delivered the certificate to the deceased, and collected from him the benefit assessment for the month of December. A few days after this, viz. on the 13th of December, 1906, deceased died without having been initiated or accepted as a member of the Independence lodge and without having taken any of the ritualistic work prescribed by the by-laws of the society. On these subjects the by-laws contained the following provisions:

"Sec A. . . . Upon receipt of the benefit certificate the President shall notify the candidate and he shall be initiated by the subordinate lodge at a regular or special meeting. At any time before the initiation of an applicant, the lodge may, by a majority vote, refuse to initiate, in which case, the benefit certificate with a certified statement of the action of the subordinate lodge, shall be immediately forwarded to the Supreme Secretary.

"Sec. D. The initiation fee shall be deposited by the secretary with the treasurer, and in case the applicant is rejected, said fee shall be returned to him by order of the lodge. But if the applicant fails to report for medical examination within thirty days after his election, or fails to report for initiation within sixty days after his benefit certificate is issued, he shall forfeit the membership fee, and if he desires to become a member, must again make application, when his fees shall be credited on second application. . . .

"Sec G. The liability of this fraternity for the payment of benefits upon the death or injury of a member shall not begin until all the acts, qualification and requirements prescribed in the above division, and in all the laws, rules, regulations and ritual of the fraternity shall have been fully complied with by him, and until all acts therein prescribed for the lodge shall have been fully complied with by it, and until his application shall have been approved by the lodge and Head Physician, and a benefit certificate issued as provided in Sec. C of this division, and delivered to the applicant while in good health, and no officer of this fraternity is authorized or permitted to waive any of the provisions of this division, or these laws, or any other of the laws of this fraternity which shall relate to the contract of insurance between the members and...