Smith v. Travelers' Protective Ass'n of America

• Decision Date: 18 May 1928
• Docket Number: 26803
• Parties: Josephine Smith, Appellant, v. Travelers Protective Association of America
• Court: Missouri Supreme Court

6 S.W.2d 870

319 Mo. 1120

Josephine Smith, Appellant, v. Travelers Protective Association of America

No. 26803

Supreme Court of Missouri

May 18, 1928

Appeal from Jackson Circuit Court; Hon. Willard P. Hall Judge.

Affirmed.

Johnson Lucas & Graves for appellant.

(1) The plaintiff having obtained a divorce for the fault of her husband did not lose any right in the certificate, and even if it be conceded that she had no vested right in the certificate when it was issued, and during the lifetime of her husband, it was an expectancy, and became a vested right at his death. Sec. 1809, R. S. 1919; Gibbs v. Knights of Pythias, 173 Mo.App. 42; Courtois v. Grand Lodge, 135 Cal. 552; Overhiser v. Overhiser, 14 Col. App. 1; Farra v. Braman, 171 Ind. 546; White v. Brotherhood, 124 Iowa 293; Brown v Ancient Order, 208 Pa. St. 101; Snyder v. Supreme Ruler, 45 L. R. A. (N. S.) 209; Conn. Mut. Life Ins. Co. v. Schaefer, 94 U.S. 457. (2) It was incumbent upon the defendant to prove that it was, at the time it issued the certificate, a fraternal beneficiary association. This it did not do, and hence its certificate is a regular old-line insurance policy. Whether defendant is a fraternal beneficiary association, depends not on its charter, but on its action and the method of conducting its business. Andrus v. Accident Assn., 283 Mo. 442; Murphy v. Brotherhood, 199 S.W. 730; National Union v. Marlow, 74 F. 783; Corley v. Travelers' Protective Assn., 105 F. 854. (3) The court sitting as a jury should have passed on all the material issues in the case, because the law requires it. The ineligibility of plaintiff to receive the benefits of the policy or certificate as claimed by defendant is not a statutory one, but depends on the construction of the contract as based on the constitution and by-laws of defendant. Advance Thresher Co. v. Speak, 167 Mo.App. 473; Lummi Packing Co. v. Kryder, 263 S.W. 545. (4) Sec. 6401, R. S. 1919, is void because it is in violation of Subdivisions 26 and 33 of Section 53 of Article 4 of the Constitution. Laws 1911, p. 284; Wooley v. Mears, 226 Mo. 41; State ex rel. v. Reville, 257 Mo. 529; Aloe v. Feed Assn., 164 Mo. 696; State v. Mikseck, 225 Mo. 574. (5) Lawrence E. Smith was not participating in aerial navigation, but was a passenger in a seaplane at the time the accident happened, and was not violating any provision of the contract. Long v. St. Joseph M. Co., 248 S.W. 923; Benefit Assn. v. Hayden, 299 S.W. 995; Barnett v. Merchants Ins. Co., 87 Okla. 42; Boatright v. Am. Ins. Co., 191 Iowa 253; Pulaski v. Sovereign Camp, 174 N.Y.S. 298. (6) He was not at the time of his death participating in a hazardous adventure, or in a voluntary or unnecessary exposure to danger, or to obvious risk of injury. Man. Acc. Indemnity Co. v. Dorgan, 58 F. 945.

Holland, Lashly & Donnell, J. M. Johnson and Donald W. Johnson for respondent.

(1) There is no merit in the point raised concerning the motion for an entry nunc pro tunc. The judgment rendered disposed of all of the issues in the case. The written memorandum or opinion filed by the judge was no part of the record proper, which so far as this question is concerned, consists alone of the judgment entered. Gamble v. Daugherty, 71 Mo. 599; Hewitt v. Steele, 118 Mo. 463; M. K. & Eastern Ry. v. Holschlag, 144 Mo. 253. (2) Plaintiff had no vested interest in the death benefit certificate, and having become ineligible as a beneficiary by obtaining a divorce, is without interest in the certificate and cannot maintain this action. When the certificate was issued in November, 1911, plaintiff was eligible under the statutes and under defendant's constitution and by-laws which followed the statutes. Sec. 6403, R. S. 1919. The beneficiary named in a fraternal certificate must belong to one of the classes named in this statute and must remain eligible until the death of the member. The insurance inures to the benefit of the person sustaining the designated relationship at the time of the death of the member, and not to the person sustaining such relationship at the time of the issuance of the certificate, unless such status continues until the death of the member. It was the wife of Smith, the member, who was entitled to the insurance when he died. The plaintiff had ceased to be his wife. Another had taken her place, and if the second wife had survived him she would have been entitled to the benefit. We must assume that Smith, the member, who continued paying the dues on this certificate and keeping it in force until the date of his death, realized that he was carrying insurance for the benefit of his second wife, and not for the benefit of his former wife who had divorced him. Order of Railway Conductors v. Koster, 55 Mo.App. 186; Modern Woodmen v. Patterson and Johnston, 196 Mo.App. 346; Green v. Green, 147 Ky. 808, 39 L. R. A. (N. S.) 370 (n); Joyce on Insurance, sec. 818; Tyler v. Odd Fellows Relief Assn., 145 Mass. 134; Royal League v. Casey, 144 Ill.App. 1; Sovereign Camp W. O. W. v. Billings, 185 N.W. 426; Appleby v. Grand Lodge, 225 S.W. 588; Hatch v. Hatch, 35 Tex.App. 373. (3) Sec. 6401, R. S. 1919, is constitutional. Westerman v. Supreme Lodge, K. of P., 196 Mo. 670; State ex rel. v. Reynolds, 287 Mo. 169; State ex rel. v. Trimble, 292 Mo. 371; Andrus v. Accident Assn., 283 Mo. 450; Ryan v. Maccabees, 237 S.W. 224; Melville v. Accident Ins. Co., 253 S.W. 68.

Lindsay, C. Seddon and Ellison, CC., concur.

OPINION

LINDSAY

This is a suit upon a certificate, issued by the defendant as a Fraternal Beneficiary Association to Lawrence E. Smith, on November 13, 1911. It provides for the payment of benefits, in the sum of $ 5000, to Josephine Smith, wife of Lawrence E. Smith, upon his death, caused through external violent and accidental means, independently of all other causes.

In 1915 plaintiff was divorced from Lawrence E. Smith for his fault. Thereafter he remarried. In March, 1922, he and his second wife, and some other persons, were passengers for hire upon an aircraft, of the type called a seaplane, which undertook to fly from Miami, in Florida, to the Island of Bimini, a British possession about sixty miles from the coast of Florida. When the plane was several miles short of its destination, trouble developed in the engine and the plane descended to the water. A high wind prevailed, the sea was rough, the plane was capsized, and all of the five passengers perished. Lawrence E. Smith and his wife, after clinging to the wreck of the plane for many hours, died from exhaustion, and exposure of the wind and water, the wife dying first. Another suit arising out of the death of a passenger upon the occasion mentioned was that of Wendorff v. Missouri State Life Insurance Co., 1 S.W.2d 99.

Lawrence E. Smith remained a member of the defendant association and had paid the required dues and assessments up to the time of his death, but no change had been made in the certificate, which stood as originally issued, carrying the provision: "Benefits in case of death payable to Josephine Smith, his wife."

At the time of the issuance of the certificate the act concerning Fraternal Beneficiary Associations, was in force. [Laws of Missouri 1911, p. 284.] The various sections of this act, with some changes, not applicable to the questions herein involved, appear as Article XV of Chapter 50, Revised Statutes 1919, Sections 6398-6437.

The theory of the petition was that plaintiff was the widow of Lawrence E. Smith, deceased, and entitled to recover as upon an ordinary policy of insurance for the death of Lawrence E. Smith by accident. She sued for $ 5000, the sum provided to be paid, and for a penalty for vexatious refusal to pay.

The answer alleged that the defendant was incorporated as a fraternal beneficiary society, under the Laws of Missouri for the sole benefit of its members and their beneficiaries; that it had a lodge system with ritualistic form of work, and representative form of government; that it made provision for the payment of death benefits only to beneficiaries of deceased members who died in good standing in defendant's society, and only to such beneficiaries as belonged to a class designated in its constitution and by-laws; that the fund from which death benefits and the expenses of the society are defrayed is derived from dues and assessments collected from the members. Defendant also pleaded a provision of its articles of association as follows: "The payment of death benefits shall be confined to the wife, relatives by blood, to the fourth degree, ascending or descending, father-in-law, mother-in-law, son-in-law, daughter-in-law, stepfather, stepmother, stepchildren, children by legal adoption, or to a person or persons dependent upon the member." This provision follows the terms of Section 6403 of the statute. The defendant also pleaded and set forth various other provisions of its articles, governing in cases wherein a beneficiary became ineligible, or a member died without leaving designated beneficiaries or heirs at law, also a provision governing the making of a change of beneficiary, and issuance of a new certificate. Defendant alleged that by reason of a judgment of divorce from Lawrence E. Smith, plaintiff became ineligible, and had no legal right under the contract to demand the benefit provided in the certificate. Defendant also pleaded as a defense a provision of the certificate that it should not be liable in case of the death of a member caused while the member was "acting as an aviator or balloonist, or soldier or sailor, by participation in war or riot, or aerial navigation, . . . or hazardous adventure . . . or by voluntary or unnecessary exposure to danger or to obvious risk of injury;" and alleged that the death of Lawrence E. Smith "was directly...