Spande v. Western Life Indemnity Co.

• Decision Date: 26 September 1911
• Citation: 117 P. 973,61 Or. 220
• Parties: SPANDE v. WESTERN LIFE INDEMNITY CO.
• Court: Oregon Supreme Court

117 P. 973

61 Or. 220

SPANDE v. WESTERN LIFE INDEMNITY CO.

Supreme Court of Oregon

September 26, 1911

Appeal from Circuit Court, Clatsop County; J.A. Eakin, Judge.

Action by H.A. Larsen Spande against the Western Life Indemnity Company. From a judgment for plaintiff, defendant appeals. Reversed and remanded for further proceedings.

After alleging the corporate character of the defendant and its authority to conduct the business of life insurance in the state of Oregon, the complaint recites that on August 28 1888, the Washington Co-Operative Life Insurance Association was organized and doing business within the state of Oregon as a life insurance association on a mutual benefit plan, and states "that on that date the said Washington Co-Operative Life Insurance Association, for a good and valuable consideration, executed and delivered to this plaintiff a 20-year endowment and insurance upon the life of this plaintiff, agreeing to pay plaintiff, should he live 20 years and pay his assessments, the sum of $2,000, or, if he should die before the expiration of said 20 years, to pay his beneficiary, plaintiff's wife, the sum of $2,000." According to the complaint, about September 10, 1898, the Washington association above named was reorganized under the name of the Order of Washington, and on September 20, 1904 with the consent of the plaintiff, the Order of Washington took up the original certificate of insurance issued to him by the Washington Co-Operative Life Insurance Association and instead thereof issued to him another benefit certificate of life insurance and 20-year endowment, in words and figures following, to wit:

"Issued in lieu of Washington Co-Operative Life Insurance Association certificate number 245, dated August 28, 1888. No. 245. Life expectancy. 20 years. Age 30 years. Monthly payment $1.60. Certificate of Membership Issued by the Supreme Union, the Order of Washington, Portland, Oregon. Twentieth Century Endowment Department. This certifies, that H.A. Larsen Spande has been accepted and admitted as a member of Home Union No 1, located at Portland, state of Oregon, and that in accordance with, and under the provisions of the laws of the order, he is entitled to all the rights, benefits, and privileges of membership therein, and the Order of Washington agrees that after the maturity of this certificate of membership, occasioned by the death of the member, or otherwise, one assessment on the life benefit membership collected for said fund not exceeding in amount the sum of two thousand dollars will be paid as a benefit to Emily Weokoline Larsen Spande bearing relationship of wife, which sum shall, after the surrender of this certificate and satisfactory proof of death, or upon proof of the maturity of this certificate otherwise, shall have been furnished be paid in accordance with the laws of the order; provided the above named member shall be in good standing in that order at the time of death or at the time any benefits may accrue, and provided that he or she shall have in every particular complied with the constitution, laws, ritual, rules and usages of the order now in force or those that may hereafter be adopted, and has not obtained his or her membership by fraud, concealment or misrepresentation as to his or her age physical condition, habits or occupation as shown by his or her application and medical examination, all of which is hereby referred to and made a part of this certificate. In witness whereof, the Supreme President and Supreme Secretary of the Supreme Union, the Order of Washington, have hereto subscribed their names and affixed the corporate seal of the order at Portland, Oregon, this 20th day of September, 1904. Maturity of this policy dates from original date, August 28, 1888. W.W. Terry, Supreme President. J.L. Mitchell, Supreme Secretary. [ Seal.]

"I hereby accept this certificate on the condition named therein. H.A.L. Spande. [ Signature of member, in full.]

"Registered and delivered this 20th day of September, 1904."

The plaintiff avers that he complied with the rules and regulations of the original Washington association and of the Order of Washington without stating anywhere what those rules and regulations were, and that on and prior to March 21, 1908, the defendant represented to the plaintiff that the Order of Washington had entered into an agreement with the defendant, whereby the latter would take over all the insurance then being carried by the Order of Washington, and that by the payment to the defendant by the plaintiff of the monthly assessments due by the terms of the certificate issued by the order the same would be assumed by the defendant, and that the defendant "then and there, in writing, for a good and valuable consideration in hand paid by this plaintiff, covenanted, contracted, and agreed if this plaintiff would pay the said defendant all of the assessments required to be paid under the laws of the Supreme Union of the Order of Washington on said benefit certificate, life and twenty-year endowment policy hereinbefore mentioned that said defendant would assume all the conditions and stipulations contained in said insurance policy required to be done and performed by said Supreme Union of the Order of Washington."

He alleges the acceptance on his part of the contract and agreement alleged to have been made by the defendant, and that he complied with its terms, as well as with the terms of the certificate issued by the Order of Washington, until August 28, 1908, when he notified the defendant of the fact that he had lived out his life expectancy; that his policy had fully matured; and that he had in every way complied with the regulations and laws of said order and agreement between plaintiff and defendant, and demanded the payment to him by the defendant of the sum of $2,000, offering at the time to make such further proof as the defendant might require, or whatever was required by the rules, laws, or usages of the defendant, or the Order of Washington, but that the defendant waived further proof and refused payment of the sum of money mentioned. All the allegations of the complaint, except the corporate entity of defendant, were traversed by the answer.

As a further defense, the defendant alleged that the present contract made between the defendant and the Order of Washington was in words and figures as follows, the same being hereafter, for convenience, called "Exhibit A": "Reinsurance Contract between Western Life Indemnity Company and the Order of Washington. This agreement, made and entered into by and between the Western Life Indemnity Company, a corporation organized and doing business under the laws of the state of Illinois, of the city of Chicago, Illinois, hereinafter designated the company, and the Order of Washington, a corporation organized and doing business under the laws of the state of Oregon, of the city of Portland, Oregon, hereinafter designated the order, by J.L. Mitchell, its attorney in fact, witnesseth that:

"Whereas said order is a fraternal beneficiary society, with a subordinate lodge system, and under its by-laws has issued and has now outstanding membership certificates providing for indemnity in case of death or disability and has also issued and has outstanding certain other certificates providing for sick and accident benefits; and whereas, said order is desirous of transferring or reinsuring its members holding said certificate providing for death and disability indemnity only to said company:

"Now therefore, the said company, in consideration of the covenants and agreements hereinafter contained, does hereby reinsure and accept as its members, upon the terms and to the extent following, all of the living members of the said order holding said above described membership certificates, designated 'Life Benefit Certificates,' who are in good standing at twelve o'clock noon on the books of the said order on the date this agreement goes into effect; it being understood that this shall also include such delinquent members of said order as shall be hereafter reinstated under the terms of the said certificates. As to every such member said company will and does hereby assume the full liability under his or her said life benefit certificate for the full term of one year from twelve o'clock noon of the day this agreement goes into effect, unless such policy is sooner exchanged, as hereinafter provided. On or before the expiration of said term of one year, said company will issue to each such transferred or reinsured member, in lieu of his present life benefit certificate in said order, without medical examination and without expense to him or her, the whole life nonparticipating policy of said company, or any other form of policy now issued by said company, at its present prescribed premium rate for such policy, applicable to his or her then attained age, for an amount, not exceeding that provided by his present life benefit certificate in the said order, according to one of the two following options:

"First Option: Said member may receive from said company, in lieu of his or her said life benefit certificate in said order, upon filing his written application therefor, any form of policy now issued by said company, on which policy the member will be required to pay the present prescribed premium rate of the company for such policy, applicable to the said member's then attained age, the said policy to be free from all lodge dues; or

"Second Option: Said member may hereafter pay to said company the same premium amount heretofore paid by him or her to said order, and thereupon shall receive from said company, in lieu of his or her said life benefit certificate in said order, said company's whole life nonparticipating policy, for...