Spencer v. Security Ben. Ass'n

• Citation: 297 S.W. 989
• Decision Date: 13 August 1927
• Docket Number: No. 4283.,4283.
• Parties: SPENCER v. SECURITY BEN. ASS'N
• Court: Court of Appeal of Missouri (US)

297 S.W. 989

SPENCER v. SECURITY BEN. ASS'N

No. 4283.

Springfield Court of Appeals, Missouri.

August 13, 1927.

Rehearing Denied September 22, 1927.

Appeal from Circuit Court, Pemiscot County; Henry C. Riley, Judge.

Action by Charles Spencer against the Security Benefit Association. Judgment for plaintiff, and defendant appeals. Affirmed.

A. W. Fulton, of Topeka, Kan., and Ward & Reeves, of Caruthersville (Geo. R. Allen, of Topeka, Kan., of counsel), for appellant.

Von Mayes, of Caruthersville, for respondent.

BRADLEY, J.

This is an action on two beneficiary certificates of $1,000 each issued by defendant to Birdie A. Spencer, wife of plaintiff, who was designated in the certificates as beneficiary. The cause was tried before the court without a jury and judgment was for plaintiff.

The petition is in two counts. The first count is based on a certificate issued September 14, 1906, and the second count on a certificate issued December 27, 1923. When the first certificate was issued defendant's corporate style and name was the National Council of the Knights and Ladies of Security. Later the corporate name was changed to Security Benefit Association, and such was the name of defendant when the second certificate was issued. Each count of the petition is in conventional form and prays judgment for the amount of the certificate with interest.

The answer is first a general denial and then a special plea to the effect that by virtue of the certificate contract, the by-laws of defendant and the suspension of insured for nonpayment of dues, the contract of insurance was forfeited and that defendant is not liable. The by-laws relied upon and the facts of the alleged suspension are pleaded. Also it is alleged in the answer that the pleaded by-laws are valid and so held to be by the Supreme Court of Kansas, the domicile of defendant, and that the courts of Missouri are, under the full faith and credit clause of the federal Constitution, bound by the interpretation and construction of said by-laws by the Supreme Court of .Kansas. The opinion by the Supreme Court of Kansas in Pickens v. Security Ben. Ass'n, 117 Kan. 475, 231 P. 1016, 40 A. L. R. 654, is also pleaded in the answer.

The reply, in addition to certain admissions and a general denial, Is as follows:

"That if the dues and assessments due on the certificates sued on for the month of November, 1924, were not paid until the 30th day of December, 1924, and at the time of the payment of said dues and assessments the said Birdie A. Spencer was not in good health, the defendant, by and through its agent, or local financier, to whom said dues and assessments were paid, and who at the time was authorized by defendant to receive the same, and who was not required by defendant to report to it the state of health of any member of defendant association paying his or her dues and assessments out of time, had full knowledge of the state of health of the said Birdie A. Spencer at the time of the payment of said dues and assessments, and defendant retained said dues and assessments paid by the said Birdie A. Spencer as aforesaid without objection or inquiry as to the state of health of the said Birdie A. Spencer for an unreasonable length of time, and made no effort to return said dues and assessments to her until defendant became aware that she was seriously ill, and in fact never tendered to her said dues and assessments, and no fraud or deceit was practiced by her or any one for her upon defendant relating to said dues and assessments or the state of her health before or at the time of the payment of said dues and assessments or thereafter, and for a long time prior to the month of November, 1924, it was the custom and practice of defendant to receive from the said Birdie A. Spencer and other members of defendant association their monthly dues and assessments after the dates on which they were due and payable as specified in their respective certificates and to retain the same without objection, and thereby led and caused the said Birdie A. Spencer to believe and she did believe that the payment of the dues and assessments upon the certificates sued on within the time specified in said certificates was not essential to her interest or that of the beneficiary named therein, or to keeping alive said certificates, and by reason of the foregoing facts and conduct of the defendant the defendant waived whatever objection it might have had to the payment of said dues and assessments after the time specified in said certificates and is estopped from claiming any forfeiture of the rights of the beneficiary under said certificates on account of the state of health of the said Birdie A. Spencer at the time of the payment of said dues and assessments.

"And for further reply and defense to the new matter set up in said amended answer, not hereinbefore expressly admitted, plaintiff says the certificates sued on were delivered to the said Birdie A. Spencer in this state, and all the dues and assessments thereupon were paid in this state, and the applications upon which said certificates were issued were made in this state, and at the time of the delivery of said certificates, payment of said dues and assessments and the making of said applications the said Birdie A. Spencer was in and a resident of this state, and therefore the adjudged cases of the forum govern this cause."

Defendant is a fraternal beneficiary association whose domicile is in the state of Kansas. Insured was a member of the local lodge or council No. 1392 of defendant at Hayti, Mo., and had been since September 14, 1906, when her first certificate was issued. Her residence was at Hayti where she resided and where she died February 12, 1925. Assessments were payable monthly on the 1st day of the month, but were not delinquent if paid on or before the last day of the month. If assessments were not paid during the month when due the member was suspended, and during the suspension of a member his or her certificate was not in force. The bylaws of defendant provided how a suspended member could be reinstated in 60 days and after 60 days and less than 6 months. After being suspended for 6 months a member could not be reinstated, and could not become a member again except on new application as though such applicant had never been a member.

Insured's November, 1924, assessment was not paid until December 30th, at which time the November and December assessments were paid to Mrs. Darie Hayes, the secretary-treasurer of local council 1392 at Hayti. This officer, called the financier of the local council, was the proper officer to whom to pay assessments. The financier, when she made report and remittance of November assessments collections, reported insured as delinquent, and on receipt of this report December 11th at the head office it was noted on the card for insured that she was suspended for nonpayment of November assessment. When the financier made her report and remittance of December assessment collections she reported the payment of insured's November and December assessments and remitted same to the head office. This report and remittance were received by defendant at its head office in Topeka, Kan., January 8, 1925, and on that date it was noted on the card for insured that she was reinstated. January 18, 1925, Dr. J. W. Johnson of Hayti, insured's physician, wrote defendant relative to getting insured in defendant's hospital and stated that she was suffering from an abscess in the left side and was in immediate need of hospital treatment. January 21st defendant acknowledged receipt of Dr. Johnson's letter and asked him when he began treating insured for the abscess and when she first consulted him about it. Dr. Johnson wrote his reply on the bottom of defendant's letter and stated that the abscess started about December 1, 1924. He also gave the general condition at that time of insured and again stated that she needed hospital treatment. Dr. Johnson's reply was not dated, but J. M. Kirkpatrick, defendant's president, testified that Dr. Johnson's reply was received about January 26th. January 30, 1925, defendant's president addressed a letter to insured wherein he stated that he desired to call her attention to section 114 of its by-laws relative to the reinstatement of a member in suspension for less than 60 days, and quoted said section in the letter.

Section 114 is as follows:

"How a Member may be Reinstated within Sixty Days.—Any beneficiary member suspended by reason of nonpayment of an assessment or assessments, or dues, may within 60 days from the date of such suspension be reinstated upon the following conditions and none other, viz.: If not engaged in any of the prohibited occupations he may be reinstated by payment, within 60 days from date of suspension, of all arrearages of every kind, including special assessments and dues, for which he would have been liable had he remained in good standing: Provided, however, that he be in good health at the time of making payment to the Financier with a view to reinstatement. The payment of any such assessments and dues for reinstatement shall be a warranty by such member that he is in good health at the time of such payment. Provided, further, that the receipt and retention of such assessment and dues, in case the suspended member is not in good health, or is engaged in a prohibited occupation, shall not have the effect of reinstating said member or of entitling him or his beneficiaries to any rights under his benefit certificate."

The president further wrote in the letter as follows:

"We have received authentic information that you were not in good health at the time of making payment to your financier for the purpose of reinstating. Therefore your reinstate did not actually take place under the provisions of the above section. I am, accordingly, returning your assessments for November and December to you inclosed in the form of the attached check...