Snowden v. Masonic L. Ass'n of West. N.Y.

• Decision Date: 27 May 1932
• Citation: 244 Ky. 286
• Parties: Snowden v. Masonic Life Association of Western New York et al.
• Court: United States State Supreme Court — District of Kentucky

244 Ky. 286

Snowden v. Masonic Life Association of Western New York et al.

Court of Appeals of Kentucky.

Decided May 27, 1932.

1. Action. — In action against foreign fraternal insurance society, court could not declare whether society could periodically change dues, pleadings not showing whether it was secret, under lodge system, and supervised by supreme body (Ky. Stats., sec. 679).

Court could not declare the rights of the parties, respecting the society's authority to make periodical changes in its dues, since the petition merely alleged that the society was a fraternal benefit insurance society or association, whereas,

under the saving clause of Ky. Stats., sec. 679, if it was such a society, but was a secret one, under the supervision of a supreme body, and securing members through the lodge system, it would have had the right, if so provided in its policy, to make periodical changes in the amount of its monthly dues, without attaching evidence to the policy.

2. Action. — In action against foreign insurance society, court could not declare parties' rights, pleadings not disclosing place of execution or performance of policy, or whether society was doing business in state.

3. Action. — Notwithstanding possible insufficiency of service on insurance commissioner, dismissal of action should be without prejudice, where further pleadings might authorize declaration of parties' rights (Civil Code of Practice, sec. 639a-6).

Appeal from Clark Circuit Court.

MARCUS C. REDWINE for appellant.

BENTON & DAVIS for appellees.

OPINION OF THE COURT BY JUDGE THOMAS.

Reversing.

It appears from the petition in this case that on August 29, 1905, the named appellee in the caption issued a policy on the life of appellant and plaintiff below, John A. Snowden, Sr., agreeing to pay his estate upon notification and proof of his death the sum of $1,000, and that the insured in consideration therefor agreed to pay the insurer monthly dues, which began at the sum of $2.11. There was some kind of attachment to the policy which, as copied in the petition, reads as if it was an accompanying letter, and which contains this language: "As explained to you by the agent who solicited you and our literature, you will note that the cost increases a trifle each year at your birthday up to age 65, not thereafter." Plaintiff alleged that he was now 79 years of age and that he had paid monthly dues up to the date of filing the petition, but that the defendant demanded a greater amount as monthly dues than he was required to pay at the age of 65 and which was done pursuant to certain of its by-laws, but none of which was attached to his policy, and for which reason he contended that defendant was confined to the amount of monthly dues exacted of him at the age of 65 and that it had no authority under its contract to increase that amount after that day.

In making that contention plaintiff attempts to bring the defendant within the provisions of section 679 of our present Statutes, and to exclude it from the saving clause therein saying: "This section and this subdivision shall not apply to secret or fraternal societies, lodges, or councils, which are under the supervision of a grand or supreme body, and secure members through the lodge system exclusively," etc., although it is expressly averred in the petition "that the defendant is a fraternal benefit insurance society or association." If it be such, and if it is a secret one under the supervision of a grand or supreme body and secures its members through the lodge system in the manner pointed out in the statute, it is not subject to the provisions of section 679 and can and has the right to make (if it is so provided in its policy) periodical changes in the amount of its monthly dues without attaching the evidence thereof to the policy so as to meet the necessities and requirements in the discharge of its obligations to other policyholders, and which may all be provided for through by-laws enacted subsequent to the issuing of the policy upon condition, however, that plaintiff's policy attempts to bind him by such subsequently enacted alterations and changes.

The purpose of this action is to procure from the court a declaration of the rights of the parties on the particular points referred to, and which is necessarily based upon the facts relating to, whether or not plaintiff's policy was issued by a company within the terms of section 679, supra, and in such a manner as to call for an application of that section. The alleged facts are not sufficiently explicit to enable the court to determine that question, or to make a declaration of the rights of the parties concerning it, and plaintiff's pleading would have been bad on demurrer had one been filed thereto. But what we have so far said applies to the merits of the case and which, under the ruling of the court below, and to be subsequently considered, is not now presented, and we mention it only as a reason for our conclusion and determination hereinafter expressed.

The summons on the petition was executed on the insurance commissioner of the commonwealth of Kentucky. Defendant appeared for the sole purpose of moving to quash the return thereon upon the ground contained in an affidavit of counsel in which he stated that neither defendant (one of them being but a successor of the one who issued the policy) has any office or place of business in the commonwealth of Kentucky, nor any agent therein, and that neither of them has heretofore or is now authorized to do or transact any business in this state, and that neither of them has ever filed with the commissioner of insurance of this commonwealth

"a resolution adopted by its board of directors, consenting that service of process upon the Commissioner of Insurance of this state, or any action brought or pending in this state, shall be a valid service upon said company."

It was further stated in the affidavit, and which also appeared in the petition, that...