Sovereign Camp Woodmen of the World v. Hall

• Citation: 148 S.W. 526
• Parties: SOVEREIGN CAMP WOODMEN OF THE WORLD v. HALL.
• Decision Date: 27 May 1912
• Court: Supreme Court of Arkansas

148 S.W. 526

SOVEREIGN CAMP WOODMEN OF THE WORLD v. HALL.

Supreme Court of Arkansas.

May 27, 1912.

Appeal from Circuit Court, Poinsett County; W. J. Driver, Judge.

Action by Etta May Hall against the Sovereign Camp Woodmen of the World. Judgment for plaintiff, and defendant appeals. Reversed and dismissed.

Bradshaw, Rhoton & Helm, of Little Rock, and Arthur H. Burnett, for appellant. J. T. Coston, of Osceola, for appellee.

FRAUENTHAL, J.

This is an action instituted by Etta May Hall to recover upon a certificate of insurance, which she alleged was executed upon the life of her husband, and in which she is named as beneficiary. The appellant is a mutual benefit association, and it resisted recovery upon the ground that the alleged certificate was not executed and delivered in accordance with the constitution and by-laws of the order and, for that reason, never became effective as a contract; and also because the assured had, in his application for the insurance and in his medical examination, made false warranties, which avoided the certificate in the event it had been duly executed and become effective. The order consisted of a supreme body, known as the "Sovereign Camp," which issues certificates of insurance, and of numerous subordinate camps or lodges, one of which is located at Fisher. On April 8, 1910, C. H. Hall, the husband of appellee, made written application for membership in the order and for the issuance of a certificate of insurance. In accordance with the constitution and by-laws of the order, his application was balloted upon by the local camp or lodge at Fisher and was approved. Thereafter, a medical examination was made of the applicant by the camp physician. In the written application he stated: "My occupation is, farmer. * * * I am neither, directly or indirectly, engaged in any of the following prohibited occupations: * * * Saloon keeper, bartender, nor engaged in retailing of intoxicating liquors as a beverage, nor employed in making, compounding, distilling, rectifying, or brewing of malt, spirituous, vinous, or intoxicating liquors, or in the business of distributing or delivering of the same." In his medical examination, he made the following answers to the following questions: "Do you now use wines, spirits, or malt liquors?" to which he answered, "No." "Were you ever intoxicated?" to which he answered, "No." In the application he warranted the truth of these statements made both in the application and in the medical examination, and agreed that the liability of the Sovereign Camp for the payment of benefits should not begin until after the application and medical examination had been duly approved and accepted and certificate issued and personally delivered to him while in good health, "and until I shall have been obligated in due form and all the requirements of section 58 of the constitution of said order have been complied with." Section 58 of the constitution provides that the liability of the Sovereign Camp for the payment of benefits on the death of a member shall not begin until after his application shall have been accepted and certificate issued, and he shall have: "First, paid all entrance fees; second, paid one or more advance monthly payment of assessments and dues known as Sovereign Camp fund, also signed his certificate and acceptance slip attached thereto; third, paid the physician for medical examination; fourth, been obligated or introduced by the camp or by an authorized deputy in due form; fifth, had delivered to him, in person, his beneficiary certificate while in good health."

In the certificate sued on it was provided that the articles of incorporation, the constitution and laws of the order, the application for membership, and the medical examination should constitute the contract between the order and the member. It also provided that it was issued in consideration of the representations, warranties, and agreements made by the applicant, and that there should be no liability under the certificate until all of the requirements named in said section 58 of the constitution should be complied with. One of the articles of the constitution and by-laws provided that saloon keepers, bartenders, and persons engaged in the retailing of intoxicating liquors should not be admitted to the order. Another article provided that: "No officer, employé, or agent of the Sovereign Camp, or of any camp, has the power, right, or authority to waive any of the conditions upon which the beneficiary certificates are issued, or to change, vary, or waive any of the provisions of this constitution, or of these by-laws."

The application and medical examination were thereafter forwarded to appellant at its home office at Omaha, Neb., and the certificate of insurance was executed by appellant's supreme officers on April 18, 1910, and sent by mail to the clerk of the local camp at Fisher; but the exact date of its receipt by him does not appear from the testimony. It does, however, appear that the clerk of the local camp retained the certificate in his possession until some time in July, 1910, when he mailed it to appellee. The applicant, C. H. Hall, died on June 1, 1910. There is a conflict in the testimony as to whether or not he signed the certificate and acceptance slip attached thereto as provided by the laws of the order and the certificate, and there is also a conflict in the testimony as to whether or not he paid the first or any monthly advance payment of assessment and dues as required by such constitution and the certificate. The clerk of the local camp testified that on June 3, 1910, and after the death and funeral of said Hall, his brother came to him and signed the name of C. H. Hall to the certificate and acceptance slip, and at the same time paid to him a monthly assessment, for which he executed a receipt, and at the suggestion of said brother antedated said receipt to May 31, 1910. It is earnestly insisted by counsel for appellant that this testimony shows conclusively that the certificate was never delivered to and accepted by said Hall in his lifetime, and that no payment of assessment and dues was made prior to his death. It is urged on that account that, under the terms of the certificate and laws of the order, no contract of insurance was executed and no liability was incurred by the Sovereign Camp.

We are of the opinion, however, that the testimony of the appellee, that the signature attached to the certificate was that of her husband, was some evidence that the certificate was delivered to and accepted by Hall prior to his death, and that the jury might have inferred therefrom that it was thereafter left by him in the custody of the clerk of the camp for safe-keeping.

We are also of the opinion that the fact that the receipt for the payment of the monthly assessment was dated May 31, 1910, was some evidence from which the jury were warranted in finding that the assessment was actually paid at that time, and therefore prior to Hall's death.

On this issue, however, the court instructed the jury that it was the duty of said Hall to pay the assessment on or before the 1st day of June, 1910, and that if they found from the evidence that said Hall, in person or through another for him, did not make payment of such assessment on or before June 1, 1910, then and in that event he was suspended, and they should find for defendant, "unless you further find that such payment of said assessment was made to and received by Red Oak Camp No. 34 subsequent to said June 1, 1910, which payment would be binding upon defendant, and in which event you should find for plaintiff on this issue." This instruction, we think, was erroneous.

The rule, we think, is well settled that a person wishing to become a member of a mutual benefit society is supposed to have made himself acquainted with the constitution and by-laws of the order and to know the limitations on the powers of its lodge officers and subordinate bodies which are contained in said constitution and by-laws. 1 Bacon on Benefit Societies & Life Insurance, § 157.

It has been held, it is true, that the relation of the subordinate lodges to the supreme body of a benefit society is regarded in some transactions as that of agency, and that the general rules of agency in such matters apply to agents of all kinds of insurance companies — mutual benefit associations as well as stock companies. 3 Cooley's Briefs on Law of Insurance, 2495. But it is well settled by the weight of authority that the officers and subordinate lodges of a mutual benefit association have no authority to waive the provisions of its by-laws and constitution which relate to the substance of the contract between the applicant and the association.

In the case of Borgraefe v. Knights of Honor, 22 Mo. App. 127, in speaking of the character of the agency and the extent of the authority of the subordinate lodges of a mutual benefit order, Judge Thompson said: "The subordinate lodges are, no doubt, the agents of the supreme lodge in dealings with the members for many purposes, and in those cases where the subordinate lodges act through their ministerial officers, and where the latter act in conformity with the rules governing the lodges and the order, these officers may become pro hac vice the agents of the subordinate lodges. But it is not shown to us that these officers are anywhere endowed with power to set aside the rules of the order, or that the subordinate lodges are endowed with such a faculty. On the other hand, it is perceived, by the provision of the laws of the order...