Sloan v. Loyal Fraternal Home Ass'n

• Decision Date: 15 November 1909
• Parties: MARY SLOAN et al., Appellants, v. LOYAL FRATERNAL HOME ASS'N, Respondent
• Court: Kansas Court of Appeals

123 S.W. 57

139 Mo.App. 443

MARY SLOAN et al., Appellants, v. LOYAL FRATERNAL HOME ASS'N, Respondent

Court of Appeals of Missouri, Kansas City

November 15, 1909

Appeal from Clinton Circuit Court.--Hon. A. D. Burnes, Judge.

AFFIRMED.

Judgment affirmed.

W. R Cress and W. S. Herndon for appellants.

The defendant obtained its pro forma decree of incorporation on the 6th of September, 1906. The articles of association were filed and recorded in the recorder's office that day and were filed in the office of the Secretary of State and a copy issued by that officer on the 8th of the same month. Its corporate existence was complete on the 8th of September 1906. R. S. 1899, sec. 1395. Even though the defendant's corporate existtence was not complete at the dates mentioned in the petition and evidence, it is estopped, under the facts in this case, to deny its corporate existence, both on the ground of estoppel and subsequent ratification of the acts of its agents and officers. Roll v. St. Louis, etc Co., 52 Mo.App. 67; Rinehart v. Mining Co., 107 Mo. 623 l. c.; Ragan v. McElroy, 98 Mo. 340; Mining Co. v. Richards, 95 Mo. 112; Brogroffe v. Knights of Honor, 26 Mo.App. 225; Bank v. Bank, 107 Mo. 133; Bank v. Fricke, 75 Mo. 78. The retaining of the money paid by Sloan was a ratification of the acts of Mr. Filson. Winscott v. Guaranty Inv. Co., 63 Mo.App. 367; Pitts v. D. M. Steel Mer. Co., 75 Mo.App. 221. The defendant assumed a corporate name, exercised corporate powers, performed acts and contracted as a corporation. It is therefore estopped to deny its corporate existence and liability as such. 2 Bacon, Benefit Societies, sec. 424; Bararo v. Occidental Grove, 4 Mo.App. 434; Express Co. v. Bradbury, 34 Ill. 466; Stoddards v. Onondago Annual Conference, 12 Barb. 573; Scheufler v. Grand Lodge, 45 Minn. 256, 47 N.W. 799; 2 Bacon, Ben. Soc., 429b, citing, Perrine v. Grand Lodge A. O. U. W., 48 Minn. 82, 50 N.W. 1022; Burlington, etc., Assn. v. White, 41 Neb. 561, 59 N.W. 571. Mr. Filson was secretary of the local lodge at Cameron when it was a subordinate lodge of the "Fraternal Home," and also when it became a subordinate lodge of the defendant. He was also supreme treasurer of the defendant, being named as such in the articles of association, and on the 12th of October, 1906, resigned that office. The deceased did all things required of him, by the defendant, up to the time of his death, to keep his insurance in force, and the defendant, by its officers, directed him what to do. The receipt and retention of the dues paid it by Sloan is both a waiver of the defenses set up in the answer and an estoppel to plead them. Read v. Bankers Union, 120 Mo.App. 419; Cline v. Sovereign Camp, 111 Mo.App. 601; St. Louis Police Relief Ass'n v. Tremy, 116 Mo.App. 447; Herzberg v. Brotherhood, 110 Mo.App. 334; Webber v. Ancient Order of Pyramids, 104 Mo.App. 729. The defense of ultra vires is not pleaded. A mere denial of the power to make a contract is not an affirmative defense. Neither can the defense of violation of a by-law of the defendant be considered, because no by-law is pleaded. Webber v. Ancient Order of Pyramids, 104 Mo.App. 729. The defense of ultra vires is not available to respondent, the contract having been fully executed by Sloan and not prohibited by law. Winscott v. Guaranty Inv. Co., 63 Mo.App. 367.

W. N. Fitch for respondent.

Michael T. Sloan died September 28, 1906. Articles were filed with the Secretary of State September 8, 1906, and he issued certified copy November 30, 1906. The Loyal Fraternal Home was not a corporation at the time of the death of Michael T. Sloan. R. S. 1899, sec. 1395. If any act is essential to the formation of a corporation, the omission of such act is fatal to the formation of such corporation. Granby Mining Co. v. Richards, 95 Mo. 110; quoting from Mining Co. v. Woodbury, 12 Cal. 424; Hurt v. Salisbury, 55 Mo. 311; Richardson v. Potts, 71 Mo. 128; Queen City Fur. & Car. Co. v. Crawford, 127 Mo. 364-5; Bank v. Rockefellow, 195 Mo. 41. The Loyal Fraternal Home was organized to insure the living, not the dead. R. S. 1899, sec. 1408; See Charter, Record 16; Hiatt v. Fraternal Home, 99 Mo.App. 115. A fraternal benefit society is bound by the limitations placed upon it by the statutes and its charter. Their actions in excess of those limitations are void. Edmonds v. M. W. A., 125 Mo.App. 219; Wagner v. Francis Xavier Society, 70 Mo.App. 161; Ferbarcke v. A. O. U. W., 81 Mo.App. 268; Hoffman v. B. F. L. F., 73 Mo.App. 55; Lester v. Lester, 73 Mo.App. 99. The Fraternal Home being a fraternal beneficiary association, it had no power to issue the certificate sued on. The beneficiary is not within the class mentioned in section 1408, Revised Statutes 1899. In Dennis v. Modern Brotherhood of America, 119 Mo.App. 214, we find the following language, viz: "No one can become a beneficiary in a Fraternal Beneficiary Society who does not belong to some of the classes of persons named as beneficiaries in the statutes." Masonic Benefit Soc. v. Bunch, 109 Mo. 560; Keener v. Grand Lodge, 38 Mo.App. 543; Herzberg v. Modern Brotherhood of America, 110 Mo.App. 328.

OPINION

ELLISON, J.

Michael T. Sloan was a member of "The Fraternal Home," beneficiary association which, among other things, issued benefit certificates to members for the benefit of their legal heirs. He became a member and received his certificate in March, 1900, for the sum of $ 2,000, payable at his death. He continued a member up to and including part of the year 1906. He died September 28, 1906, and his status with that company and with this defendant, called the Loyal Fraternal Home, is a matter of contention between the parties. This action was brought by his widow and children against the present defendant as the Loyal Fraternal Home, and upon trial the circuit court gave a peremptory instruction to find against them and they have brought the case here.

The petition is in two counts. The first one alleges the existence of the Fraternal Home and Sloan's membership therein, with beneficiary certificate down to "the first week in September, 1906." It then alleges that on the 31st of July, 1906, the Fraternal Home transferred its assets, reserve fund and other property to the Kansas City Life Insurance Company under a contract with the latter "to continue the insurance of the members of the said Fraternal Home, and that thereafter the Fraternal Home abandoned its organization and ceased to do business." The petition then alleges that on the 23rd of August, 1906, the defendant organized as a fraternal beneficiary association and began doing business as such and that it sent circulars, letters and newspapers to Michael T. Sloan containing statements that it would carry and continue his life insurance in the Fraternal Home at the same rates. That said Sloan, relying upon said statements, paid to defendant all assessments due from him under his certificate with the Fraternal Home from and after the first week day in September, 1906, until the date of his death, the 28th of September, 1906. It is then alleged that defendant agreed to insure the life of Sloan for the benefit of plaintiffs in the sum of $ 2,000. It is then alleged that proofs of death were made, etc.

The second count restates the matters stated in the first count except that it states that this defendant, in consideration of certain dues and assessments paid by Michael Sloan, assumed the payment of the certificate made by the Fraternal Home.

We thus have the statement from plaintiffs that the Fraternal Home abandoned its organization on the 31st of July, 1906, after reinsuring its members in the Kansas City Life Insurance Company. That in a few weeks thereafter (23rd of August, 1906) this defendant organized and began to do business and sent circulars to Sloan stating that it would carry and continue the insurance he had made with the disorganized association; and that he accepted such statement and paid to this defendant all assessments or claims due from him to the original disorganized association from and after the first week day in September, 1906, to the date of his death, on the 28th of that month.

The proof of these payments was in this way: F. M. Filson had been secretary of the Fraternal Home prior to its disorganization on July 31st, and he was made secretary of this defendant when it is said to have organized on the 23rd of August following. Sloan sent him by letter of 29th of August, 1906, the dues of membership up to...