Action by Gilbert L. Smith and Malinda F. Smith against the Covenant Mutual Benefit Association of Illinois. Judgment for defendant. Plaintiffs appeal. Affirmed.
This is a suit brought by Gilbert L. Smith and wife, Malinda F. Smith, against the Covenant Mutual Benefit Association of Illinois, based upon a certificate of insurance for $5,000, issued by the defendant to Dr. Tolbert C. Smith, payable upon his death to his mother, Malinda F. Smith. The defense to the action relied upon by the defendant was a failure to pay a mortuary call or assessment, whereby the certificate of insurance lapsed and became forfeited under the provisions of the contract of insurance. The case was tried by a jury, and resulted in a verdict and judgment in favor of the defendant. From this judgment an appeal has been perfected to this court by plaintiffs.
The issuance of the certificate of insurance, the death of the assured, and that plaintiff Malinda F. Smith is the beneficiary, are all unquestioned facts. The only question to be determined by the trial, upon which there was a contest, was whether the certificate had lapsed and become void by reason of failure to pay a mortuary call or assessment. Upon this issue arose several minor issues of fact, and quite a number of questions of law. The defendant, as indicated by its name, is a mutual benefit association. Its certificate holders are its members. It has a constitution, by-laws, rules, and regulations for its government, and it pays its liabilities created by death of persons holding its certificates of insurance through assessments or mortuary calls upon its members. Only one assessment was levied against deceased's policy, and that was call 120. The certificate consists of a printed form furnished by defendant, filled out as is usual in insurance policies. The essential parts of the certificate are as follows: "In consideration of the receipt of the advance premium, the payment of all bimonthly premiums hereafter required, and the representations, agreements, and warranties made in the application for membership, * * * a copy of which is hereto annexed, and the agreement upon his [deceased's] part to accept and comply with all the provisions hereinafter stated, the Covenant Mutual Benefit Association of Illinois does hereby issue this policy, and constitute the above-named applicant [deceased], hereafter termed the `insured,' a member of the said association, and agrees to pay from any funds received or to be collected for mortuary purposes as a benefit to his mother, Malinda F. Smith, * * * within ninety days from the receipt by said association of full and satisfactory proofs of a valid claim under this contract, conditioned upon the death of the insured, the sum of five thousand dollars, together with such part of the emergency fund as shall be due under the terms of the contract, any unpaid premiums or other indebtedness being first deducted therefrom: provided, further, that in the event the insured shall become totally and permanently disabled * * * upon the determination of the medical director and executive board, this policy, if then in force, may, at the option of said executive board, be surrendered properly receipted at one-half its face value: * * * provided, especially, that this policy of insurance, and the provisions, requirements, conditions, agreements, representations, and warranties set forth in the succeeding pages [of said policy], or contained in the said application [for said policy], shall be taken together, and in such entirety shall constitute the contract of insurance between the association and the insured. And this certificate or policy of insurance is issued solely upon the statements, representations, and warranties made in the aforesaid application, and shall not go into effect, or remain in force, or be binding upon the association, unless such statements, representations, and warranties are true, and the insured shall fully comply with all the conditions, requirements, and agreements contained in this contract. In witness whereof, the said Covenant Mutual Benefit Association of Illinois has, this 19th day of December, 1892, by its president and secretary, signed, sealed, and delivered this contract at its office in the city of Galesburg, Illinois. [Seal.] [Signed] A. W. Berggren, President. W. H. Smollinger, Secretary."
The following conditions, among others, appear on the back of the certificate, the others being immaterial on this appeal: "(1) To provide for the payment of all death claims, or other current expenses, and to maintain an adequate emergency or reserve fund to guaranty the prompt payment in full of all future obligations, there shall be due, according to the mortality experience and emergency fund requirements of the association, and payable at its general office in Galesburg, Ill., on the first business days of January, March, May, July, September, and November, respectively, of each and every year during the continuance of this contract, a bimonthly premium or assessment based upon the annexed tables of rates, according to age, and graded according to the mortality experience of the association, and amount of benefits named herein: provided, however, that at such time or times as the insured shall be entitled to the advantages of the emergency fund, as hereinafter stated, the board of managing directors may readjust the
grading or basis of the bimonthly assessments or premiums due thereafter in accordance with the amount of such emergency fund then available, the current age of the members, and the mortality of the association. (2) No personal liability of the insured is incurred by becoming a policy holder in this association; but this certificate of insurance is issued and accepted subject to the express conditions that, if any of the payments stipulated in this contract shall not be paid to the association on or before the day of the date as provided in this contract, at its home office in Galesburg, Ill., this contract shall terminate, and all rights be forfeited to the association. (3) The amount received from bimonthly premiums or calls, less the amount hereinafter provided for the general and emergency funds, shall constitute the mortuary fund, and shall only be used for the payment of death claims, and the protection of the mortuary fund. (4) Twenty-five cents on each five hundred dollars of insurance, to be collected bimonthly (which is included in the above [following] table of rates), shall be carried to the general fund to provide for the expenses. (5) Twenty per cent. of the mortuary premium received under this certificate or policy of insurance may be converted into the emergency fund, and held in trust, as provided in the by-laws, for the exclusive benefit of the policy holders, to be used only for the purpose of paying the actual increase of cost by reason of the advancing age of members and payment of death losses in excess of the actuary's mortality tables, as provided in section 6. (6) After the certificate or policy has been in force for six years from the first day of January following its date, and annually thereafter, there shall be an equitable distribution, for use in paying future mortuary premiums, of so much of the then unappropriated emergency fund and its accumulations as are derivable from the contributions made thereto the sixth respective preceding year and part of year; and upon the death of the insured, after this certificate or policy has been in continuous force six years from the first day of January following its date, there shall be due the beneficiaries hereunder, payable in like manner and under same conditions as the benefits named herein, such part of the then total emergency fund and its interest accumulations as the association's actuary shall determine legally due, in proportion to the contributions made by the insured thereto. (7) A printed notice, directed to the address of the insured as it appears at the time on the books of the association, and deposited in the post office, or printed in a newspaper published by the association, and forwarded as aforesaid, shall be legal notice of any required payment, and the testimony of the secretary, supported by the affidavit of the person or persons who performed such service of mailing said notice so addressed, shall be taken and admitted as conclusive evidence of such mailing, and as absolute proof of due notice to the insured. (8) in case of change of residence, post-office address, occupation, or name of the insured, he or she must immediately notify the secretary of such change, and upon the failure of the association to receive such notice it shall proceed for all purposes as if no such change had been made. (9) No liability shall be incurred by the association until the payment of the advance premium, the receipt and approval of a written application, and this certificate or policy of insurance has been issued and delivered during the life and good health of the insured; and no agent or other person, except the president or secretary, has power to change, modify, or alter this contract, or to waive forfeiture, extend credit, or grant permits." "(11) If the insured, shall personally engage in blasting, submarine operations, underground mining, selling intoxicating liquors, glassblowing, manufacturing poisonous, explosive, or inflammable substances, trading or residing among savage tribes or nations, or be employed as an indoor stone or marble cutter, quartz-mill operator, as a fireman, as a railroad switchman, engineer, fireman, brakeman, or freight conductor, or shall be engaged in military service (except in time of peace), or in naval or marine service, without having first obtained the written consent of the association, or shall...
