Sternheimer v. Order of United Commercial Travelers of America

• Decision Date: 25 May 1917
• Docket Number: 9690.
• Citation: 93 S.E. 8,107 S.C. 291
• Parties: STERNHEIMER v. ORDER OF UNITED COMMERCIAL TRAVELERS OF AMERICA.
• Court: South Carolina Supreme Court

93 S.E. 8

107 S.C. 291

STERNHEIMER v. ORDER OF UNITED COMMERCIAL TRAVELERS OF AMERICA.

No. 9690.

Supreme Court of South Carolina

May 25, 1917

On Petition for Rehearing, June 21, 1917.

On Second Petition for Rehearing, July 17, 1917.

Appeal from Common Pleas Circuit Court of Richland County; John S Wilson, Judge.

Action by Sarah Sternheimer against the Order of United Commercial Travelers of America. Judgment on directed verdict for defendant, and plaintiff appeals. Affirmed. On petition for rehearing. Petition dismissed.

See also, 103 S.C. 487, 88 S.E. 25.

Gary C.J., and Fraser, J., dissenting.

Elliott & Herbert, of Columbia, for appellant.

Melton & Belser, of Columbia, for respondent.

HYDRICK J.

Plaintiff appeals from judgment on verdict directed for defendant in an action on a life insurance policy.

On January 22, 1910, Hiram C. Sternheimer became a member of the defendant fraternal benefit association, and a certificate of membership was issued to him, wherein defendant agreed to pay his mother, the plaintiff herein, $6,300 on his death by accident, while in good standing in the order. The insured was accidentally killed September 12, 1912. Defendant refused payment on the ground that he was not in good standing at the time of his death. The constitution and by-laws of the order provide that any member who fails to pay his dues and assessments, "when and as the same become due and payable," shall immediately become a delinquent member, and the right to indemnity and benefits is thereby forfeited during his delinquency; upon payment of arrearages, he is, ipso facto, restored to good standing, but only for indemnity and benefits thereafter accruing; that delinquent members shall be suspended at the next regular meeting of the subordinate council to which they belong, and, in default of such meeting, by the secretary-treasurer thereof, and notice thereof shall be given to the Supreme Secretary; but neither the failure to suspend a delinquent member nor the giving of notice of dues and assessments to delinquent or suspended members shall be a waiver of the forfeiture incurred. The difference between delinquency and suspension is that a delinquent member may restore himself to good standing simply by paying his arrearages, but a suspended member is required to file a new application, and pay all arrearages and certain fines, and be restored, if at all, by vote of the council in which three adverse ballots are sufficient to reject the application. The first question is one of practice. Plaintiff alleged, inter alia, that insured was in good standing at the time of his death. Defendant's answer did not deny any allegagation of the complaint, but set up delinquency of insured at the time of his death, as an affirmative defense, alleging that he was in arrears for dues and assessments at the time of his death.

Plaintiff's allegation that insured was in good standing was not necessary to her cause of action. Therefore she was not bound to prove it. But defendant was bound to allege and prove delinquency of insured to establish the forfeiture of the right to indemnity. Copeland v. Insurance Co., 43 S.C. 26, 20 S.E. 754; Pickett v. Insurance Co., 60 S.C. 477, 38 S.E. 160, 629; Thompson v. Insurance Co., 63 S.C. 290, 41 S.E. 464; Huguenin v. Casualty Co., 94 S.C. 138, 77 S.E. 751. If the case had been submitted on the pleadings, judgment would have gone for plaintiff. Hence defendant was entitled to open and reply. Addison v. Duncan, 35 S.C. 165, 14 S.E. 305; Beckham v. Railway, 50 S.C. 25, 27 S.E. 611; Thompson v. Insurance Co., supra. After hearing all the evidence offered by both parties, the court directed a verdict for defendant. To this plaintiff excepts on the grounds that the evidence warranted a reasonable finding, first, that insured was not delinquent at the time of his death; and, second, of waiver.

This court usually declines to enter upon a detailed discussion of the evidence in a case like this, because, as a rule, it subserves no useful purpose, except perhaps to show that it has been carefully reviewed and considered, which is done in every such case, of course, and that should be presumed. But, out of respect to the very earnest contention in argument of the learned counsel for appellant, we state the substance of the material evidence, so that its tendencies may be seen, when it is considered in the light of the controlling provisions of the constitution and by-laws of the order, which have already been stated, and the statute law of this state.

C. M. Allen testified that he was the secretary-treasurer of the subordinate council of which insured was a member during the whole period of his membership, but resigned that office April 1, 1913, and moved to Atlanta, Ga., and has not since that time been connected with the order, or had any interest in it; under the laws of the order, he was the only person to whom dues and assessments could be paid; as each member paid anything, he issued and gave or sent him a receipt therefor from a receipt book in which he kept carbon copy duplicates of all receipts issued. He produced that book and read from it three receipts issued to Sternheimer. No. 3015, dated December 20, 1911, reads, "Received of H. C. Sternheimer $6.50, $2.50 dues from January 1, 1912, to July 1, 1912, $4 for indemnifying assessments 107, 108--total $6.50," signed by himself as secretary-treasurer. The other two were on the same form. No. 4008, dated February 28, 1912, was for assessment 109, and No. 4090, dated April 5, 1912, was for assessment 110. This receipt had on it the memorandum, "Paid by Allen," which witness explained by saying that, as the time for payment of that assessment had expired, or was about to expire, he called Sternheimer over the telephone to remind him of it, and that Sternheimer requested him to pay that assessment for him, and promised to hand him the money in a day or so, which he did. Receipts were dated as issued, which was usually several days after receipt of the checks sent him by the members. All assessments were $2 each, and the members were notified of assessments by cards sent to them by the Supreme Secretary. The dues were $5 a year, due and payable, $2.50 January 1st, and $2.50 July 1st. The amount of dues and dates for payment thereof were fixed by a by-law, but it was the custom of the council to allow an extension of 30 days for the payment of dues, as they belonged exclusively to the local council. It was also a custom of the council to allow delinquent members to pass the time when they should have been suspended, without suspending them; but of this custom neither the Supreme Council nor any of its officers had any notice. The receipt book showed no other receipts issued to Sternheimer, and witness knew, as a fact, of his own personal knowledge, that no other payments than those evidenced by the receipts mentioned had been made, and that Sternheimer had not paid his dues that were "due and payable" July 1, 1912, and assessments Nos. 111 and 112, levied May 16th and July 15th, the time for payment of which expired June 15th and August 14th, respectively, making his arrearages amount to $6.50, at the time of his death. He produced and read in evidence a letter from Sternheimer to him as follows:

"Charlotte, N. C., Aug. 18, 1912. Friend Allen: Please let me know at Sumter, S. C., 17 South Magnolia St., how much I owe, so I can send you check. With best regards to all the fellows. Sincerely yours, H. C. Sternheimer"

--and his reply thereto, to wit:

"Aug. 24, 1912. Dear Sternheimer: Just back from the North. You are due us $6.50 for dues and assessments. Attend to this for me. Allen."

On August 26, 1912, he sent Sternheimer a circular letter, which was sent to all members of the council, in which he again called his attention to the fact that he was due the council $6.50. He saw Sternheimer in person twice afterwards, and each time, the last being the morning of the day he was injured, reminded him that he was in arrears, and Sternheimer promised each time to send him a check for the amount due but never did so. After insured had been fatally injured, his brother, Fred Sternheimer, went to Allen, taking with him the assessment cards for assessments 111 and 112, which had been sent to the insured by the Supreme Secretary, and also the circular letter of August 26th, which had been sent to him by Allen, and offered to pay the arrearages, which Allen declined to receive on the ground that insured had theretofore been injured. Though susceptible of denial there was no denial of this by Fred Sternheimer, and it was admitted by plaintiff's attorney that the notification card for assessment No. 112 was found among the papers of the insured. Plaintiff, however, testified that she did not find amongst his papers the letter of Allen to him dated August 24th. There was no evidence that the circular letter or August 26th and assessment card No. 111 were not found amongst his papers. Allen further testified that the receipt of December 20, 1911, was paid by a postdated check, of date January 2, 1912, which he accepted at Sternheimer's request. This check was stamped "Paid Feb. 8, 1912," and had in pencil on the corner "N. S. F.," which the cashier of the bank said was a memorandum that payment had been refused on the ground that the drawer had "not sufficient funds" to his credit when it was presented. He also testified that on December 20th Sternheimer's balance was $34.86, which was reduced by checks, paid December 20th, 21st, and 22d to $1.86, and the balance so remained until January 12th, when it was increased by a deposit of $30. The other check given to pay assessment 109 was dated February 17, 1912, and was marked "Paid March 4, 1912." They were...